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Australian Senate Standing Committee for the Scrutiny of Bills - Scrutiny Digests |
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Purpose
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This bill seeks to:
• allow for cost recovery for permitting activities under the
Hazardous Waste (Regulation of Exports and Imports) Act 1989; and
• make a number of administrative amendments
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Portfolio
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Environment and Energy
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Introduced
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House of Representatives on 24 November 2016
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Bill status
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Before the House of Representatives
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Scrutiny principles
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Standing Order 24(1)(a)(ii) and (iv)
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2.108 The committee dealt with this bill in Alert Digest No. 10 of 2016. The Minister responded to the committee's comments in a letter dated 20 December 2016. Set out below are extracts from the committee's initial scrutiny of the bill and the Minister's response followed by the committee's comments on the response. A copy of the letter is at Appendix 2.
Initial scrutiny – extract
2.109 Item 6 will remove the current $8000 cap on the fee amount that may be prescribed under the regulations for permit applications for the export, import and transit of hazardous waste.
2.110 The explanatory memorandum (at pp 6–7) states that the amendment will allow the permit fees to be adjusted to reflect the costs incurred by the department in assessing permit applications and that removing the cap will allow the fee to be fully cost recovered in the future.
2.111 The committee notes this explanation that the intention of the amendment is to allow a level of fee to be set that is linked to cost recovery. However, the committee notes that there is no limit on the amount of fee that may be prescribed on the face of the bill.
2.112 As the setting of the amount of fees is a significant matter, the committee seeks the Minister's advice as to whether the bill can be amended to provide greater legislative guidance as to how the fee amount is to be determined and/or to limit the fee that may be imposed.
2.113 In this regard, the committee notes that a higher cap could be introduced rather than simply removing the $8000 cap altogether. For example, the committee notes that there is statutory cap on the amount of levy able to be imposed on permit applications in paragraph 9(1)(b) of the related Hazardous Waste (Regulation of Exports and Imports) Levy Bill 2016, and seeks the Minister's advice as to why a similar approach cannot be adopted in relation to placing a limit on the permit fee.
Minister's response
2.114 The Minister advised:
As the setting of the amount of fees is a significant matter, the Committee has requested advice as to whether the Hazardous Waste (Regulation of Exports and Imports) Amendment Bill 2016 (the Amendment Bill) can be amended to provide greater legislative guidance as to how the fee amount is to be determined and/or to limit the fee that may be imposed. The Committee has also sought advice as to whether a higher cap could be introduced, rather than removing the existing $8000 cap altogether.
Subsection 32(1) of the Hazardous Waste (Regulation of Exports and Imports) Act 1989 (the Act) currently enables the regulations to prescribe the fees to be paid for the processing of hazardous waste permit applications and notices. The amount or rate of the fee must be reasonably related to the expenses incurred or to be incurred by the Commonwealth in relation to the application or notice to which it relates (section 32(4) of the Act).
In this instance, the fees to be prescribed in the regulations have been determined by an assessment of the direct costs to the Department of the Environment and Energy (the Department) of providing the permit service that can be linked to particular permit applications, such as the staff hours required to process applications. The method by which the fee amounts have been calculated is outlined in the Cost Recovery Implementation Statement (the CRIS)[17], which was prepared in consultation with relevant industry stakeholders. The CRIS was prepared in accordance with the Australian Government's Cost Recovery Guidelines, which also require cost recovery arrangements to remain under review.[18]
It is not considered necessary to include guidance in the Bill regarding the determination of the fees, or a higher cap for the fees. Current drafting practice does not require the formulation for how the fee amount is determined to be legislated in statute. Any future changes to the amount of the fees prescribed would be considered following the preparation of a Cost Recovery Implementation Statement and stakeholder engagement.
Committee comment
2.115 The committee thanks the Minister for this response. In particular, the committee notes the Minister's advice that under section 32(4) of the Act the amount or rate of the fee must be reasonably related to the expenses incurred (or to be incurred) by the Commonwealth in relation to the application or notice to which it relates.
2.116 The committee requests that the key information provided by the Minister be included in the explanatory memorandum, noting the importance of these documents as a point of access to understanding the law and, if needed, as extrinsic material to assist with interpretation (see section 15AB of the Acts Interpretation Act 1901).
2.117 The committee also draws this delegation of legislative power in relation to the setting of the level of fees to the attention of the Senate Standing Committee on Regulations and Ordinances for information.
2.118 In light of the information provided by the Minister the committee makes no further comment in relation to this matter.
Initial scrutiny – extract
2.119 Item 7 proposes to insert a new subsection 32(7) which will allow the fees referred to above to be indexed by a method prescribed in the regulations.
2.120 The explanatory memorandum (at p. 7) states that the annual indexation of the application fees will be based on the Consumer Price Index (CPI) to ensure that fees remain up to date. However, there is no guidance in relation to the method of indexation to be used on the face of the bill.
2.121 As different methods of indexation can result in different rates of increase in the level of fees, the committee seeks the Minister's advice as to whether the bill can be amended to specify the method of indexation to be used.
2.122 In this regard, the committee notes that subclauses 9(2)–(7) of the related Hazardous Waste (Regulation of Exports and Imports) Levy Bill 2016 provide a statutory basis for calculating indexation by CPI in relation to the levy on permit applications and seeks advice as to why a similar approach cannot be adopted in relation to the indexation of the permit fee.
Minister's response
2.123 The Minister advised:
As different methods of indexation can result in different rates of increase in the level of fees, the Committee has requested advice as to whether the Bill can be amended to specify the method of indexation to be used, given the basis for calculating indexation is specified in the Hazardous Waste (Regulation of Exports and Imports) Levy Bill 2016 (the Levy Bill).
The proposed insertion of section 32(7) will enable the permit and notice fees to be indexed by a method prescribed by the regulations. This approach was taken to ensure that all relevant information regarding the amount of the fees for applications and notices, and the method for their indexation, is situated in the same place. This ensures that those persons who are subject to these fees do not have to access multiple documents to ascertain the amount payable.
Consistent with this approach, the amount of the levy and the method for calculating its indexations, will be specified in the Levy Bill. It was necessary to specify these amounts in the Levy Bill, rather than in regulations made for the purposes of the Levy Bill, to reflect the current drafting practice that the details of a tax be set out in the taxation Act rather than regulations.
Committee comment
2.124 The committee thanks the Minister for this response. The committee notes the Minister's advice in relation to why a different drafting approach is taken in the Levy Bill.
2.125 In light of the Minister's advice that under section 32(4) of the Act the amount or rate of the fee must be reasonably related to the expenses incurred (or to be incurred) by the Commonwealth the committee makes no further comment in relation to this matter.
Initial scrutiny – extract
2.126 Item 14 of the bill seeks to amend section 60 so that the Minister may delegate any or all of the Minister's functions and powers under the Act to an Australian Public Service employee who holds, or is acting in, an Executive Level 2 position in the Department. As such, Executive Level 2 officers will be able to exercise all of the Minister's functions and powers under the Act (previously this delegation was limited to the Secretary and Senior Executive Service (SES) employees). In addition, item 14 also seeks to insert a new subsection 60(2) which provides that in performing functions or exercising powers under a delegation the delegate must comply with any directions of the Minister. The explanatory memorandum (at p. 8) states that the purpose of this provision is to allow the Minister to direct an Executive Level 2 employee that they may only exercise decision-making powers in relation to certain types of decisions.
2.127 The committee has consistently drawn attention to legislation that allows delegations to a relatively large class of persons. Generally, the committee prefers to see a limit set either on the scope of powers that might be delegated, or on the categories of people to whom those powers might be delegated. While this provision does limit the category of people to Executive Level 2 officers in the department, the committee's preference is that delegates be confined to the holders of nominated offices or to members of the Senior Executive Service.
2.128 The committee notes that the explanatory memorandum (at p. 9) states that the rationale for broadening the category of persons to whom the Minister's powers and functions under the Act may be delegated is to 'ensure that permit processing and decisions can be made more efficiently and effectively, and reduce any delay costs to business'.
2.129 While the committee notes this explanation, the desire for administrative efficiency may not, of itself, be a sufficient justification for delegating administrative powers to a broad range of people. The committee notes that the rationale for proposed new section 60(2) in the explanatory memorandum seems to indicate that it may be possible to limit the decision-making powers of Executive Level 2 officers to certain types of decisions.
2.130 The committee therefore seeks the Minister's advice as to whether a limitation on the categories of powers and functions that may be exercised by Executive Level 2 officials can be included on the face of the bill.
Minister's response
2.131 The Minister advised:
The Committee has requested advice as to whether the limitation on the categories of powers and functions that may be exercised by Executive Level 2 officers can be included on the face of the Bill.
Item 14 has been drafted to refer to an Australian Public Service employee who holds, or is acting in, an Executive Level 2, or equivalent position, in the Department. Further, it is my intention to only delegate my powers and functions to Executive Level 2 employees within the Department who have day-to-day responsibility for the administration of the Act. The arrangement whereby such Executive Level 2 employees are delegated my powers and functions would be formalised in an Instrument of Delegation under the Act. This approach is consistent with the administration of EPBC Act, under which certain powers are allocated to Executive Level 2 employees through an Instrument of Delegation, rather than by specifying these powers in the EPBC Act or regulations.
This approach will enable Executive Level 2 officers to exercise my functions and powers under the Act where it is appropriate for decisions to be made at this level. This may include:
• Purely administrative actions that are required under the Act, some for which the statutory response times are short but do not influence how hazardous wastes are to be managed, such as the notification and acknowledgement of permit applications.
• Permitting decisions that are routine in nature, non-controversial and low-risk.
This will not prevent significant decisions being made by persons of a higher classification.
The proposed amendments will provide for more efficient administration of the Hazardous Waste Act by facilitating decision-making at a level that is appropriate to the circumstances, thus reducing unnecessary delays to permit applicants for routine, high-volume administrative actions and decisions, while ensuring that non-routine decisions are made by senior officers or the Minister, as appropriate. This approach is also consistent with the Australian Administrative Law Guide which documents that it may be appropriate for junior officers to make decisions involving a limited exercise of discretion, or under legislative provisions that give rise to a high volume of decisions to be made.
Any decision made under the Act will continue to be reviewable by the Administrative Appeals Tribunal.
Committee comment
2.132 The committee thanks the Minister for this response. The committee notes the Minister's advice that it is the intention to only delegate functions and powers under the Act to Executive Level 2 employees with day-to-day responsibility for the administration of the Act where it is appropriate, including in relation to purely administrative actions and permitting routine, non-controversial and low-risk decisions to be made. The committee also notes the Minister's advice that this will provide for more efficient administration of the Act and reduce unnecessary delays to permit applications.
2.133 The committee reiterates its preference that delegations of administrative power be confined to the holders of nominated offices or members of the Senior Executive Service or, alternatively, a limit is set on the scope and type of powers that might be delegated. While the committee notes the Minister's advice as to how it is intended this power will be exercised, there is nothing on the face of the bill to limit it in the way set out in the response.
2.134 The committee requests that the key information provided by the Minister be included in the explanatory memorandum, noting the importance of these documents as a point of access to understanding the law and, if needed, as extrinsic material to assist with interpretation (see section 15AB of the Acts Interpretation Act 1901).
2.135 The committee draws its scrutiny concerns to the attention of Senators and leaves to the Senate as a whole the appropriateness of enabling all of the Minister's powers and functions to be delegated to Executive Level 2 employees.
[16] Schedule 1, item 6, subsection 32(1).
[17] See the Department of the Environment and Energy's Cost Recovery Implementation Statement, approved by Minister Hunt on 27 April 2016, at http://www.environment.gov.au/about-us/accountabilityreporting/cost-recovery.
[18] Department of Finance, Australian Government Cost Recovery Guidelines, Resource Management Guide No. 304, July 2014 - Third edition, p. 7.
[19] Schedule 1, item 7, proposed new subsection 32(7).
[20] Schedule 1, item 14, section 60.
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