Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 [2018] AUSStaCSBSD 23 (7 February 2018)

• Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017
• Reversal of evidential burden of proof 248
• Power for delegated legislation to amend primary legislation (Henry VIII clause)251

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Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017

Purpose	This bill seeks to amend the Corporations Act 2001 and the Taxation Administration Act 1953 to: • extend corporate whistleblower protections; and • introduce new protections for tax whistleblowers
Portfolio	Treasury
Introduced	Senate on 7 December 2017

Reversal of evidential burden of proof ^[248]

1.324 Proposed subsections 1317AAE(1) and 14ZZW(1) of the bill amend the Corporations Act 2001 (Corporations Act) and the Taxation Administration Act 1953 (Taxation Act) respectively, to provide that it is an offence for a person to disclose certain confidential information relating to the identity of a whistleblower.^[249] Proposed subsections 1317AAE(4) and 14ZZW(3) provide exceptions (offence-specific defences) to these offences, providing that the offences do not apply if:

• the disclosure is not of the identity of the whistleblower; and

• the disclosure is reasonably necessary for the purpose of investigating certain prescribed matters; and

• the person who has disclosed the information has taken all reasonable steps to reduce the risk that the whistleblower will be identified.

1.325 Subsection 13.3(3) of the Criminal Code Act 1995 provides that a defendant who wishes to rely on an exception, exemption, excuse, qualification or justification bears an evidential burden in relation to that matter.

1.326 At common law, it is ordinarily the duty of the prosecution to prove all elements of an offence. This is an important aspect of the right to be presumed innocent until proven guilty. Provisions that reverse the burden of proof and require a defendant to disprove, or raise evidence to disprove, one or more elements of an offence, interfere with this common law right.

1.327 While in this instance the defendant bears an evidential burden (requiring the defendant to raise evidence about the matter), rather than a legal burden (requiring the defendant to positively prove the matter), the committee expects any such reversal of the evidential burden of proof to be justified. The committee notes that the explanatory memorandum does not provide a justification for the reversals of the evidential burden of proof in the provisions identified above, merely stating the operation and effect of those provisions.

1.328 As the explanatory materials do not address this issue, the committee requests the Treasurer's advice as to why it is proposed to use offence-specific defences (which reverse the evidential burden of proof) in these instances. The committee's consideration of the appropriateness of a provision which reverses the burden of proof is assisted if it explicitly addresses relevant principles as set out in the Guide to Framing Commonwealth Offences.^[250]

1.329 The committee also seeks the Treasurer's advice as to the appropriateness of including some or all of the offence-specific defences identified above as elements of the offences to which they apply.

Power for delegated legislation to amend primary legislation (Henry VIII clause)^[251]

1.330 Proposed section 1317AI of the bill seeks to require certain classes of companies to have in place a policy for the protection and support of whistleblowers, and to make that policy available to the company's officers and employees. Proposed section 1317AJ provides that the Australian Securities and Investments Commission (ASIC) may, by legislative instrument, make an order relieving specified classes of companies from all or particular requirements of proposed section 1317AI. Proposed section 1317AJ therefore effectively allows ASIC to amend the operation of proposed section 1317AI (that is, to amend primary legislation) by legislative instrument.

1.331 A provision that enables delegated legislation to amend primary legislation (including amending the operation of primary legislation) is known as a Henry VIII clause. There are significant concerns with enabling delegated legislation to override the operation of legislation which has been passed by Parliament, as such clauses impact on levels of parliamentary scrutiny and may subvert the appropriate relationship between Parliament and the Executive. As such, the committee expects a sound justification for the use of a Henry VIII clause to be provided in the explanatory memorandum. In this instance, the explanatory memorandum states:

The rationale for providing ASIC with a power to relieve certain companies from [all or specified requirements of section 1317AI] is to provide it with flexibility in making a determination whether in some limited circumstances, the benefits of this requirement in encouraging good corporate culture and governance could be outweighed by reduced flexibility and unnecessarily high compliance costs.^[252]

1.332 While the committee notes this brief explanation, the committee does not consider that it adequately explains why it is appropriate to provide ASIC with broad powers to modify the operation of proposed section 1317AJ by legislative instrument. In this regard, the committee also notes that the bill does not provide any limitations on the powers of ASIC to relieve companies from the requirement to have a whistleblower policy. For example, it does not set out any criteria that must be satisfied. Further, the explanatory memorandum does not explain the intended criteria that ASIC will follow when considering to exercise this power, and while the explanatory memorandum indicates that the power will only be exercised in 'some limited circumstances', it does not provide examples of the circumstances in which the power may be used.

1.333 The committee seeks the Treasurer's more detailed justification as to why it is proposed to provide ASIC with broad powers to exempt classes of company from the operation of proposed section 1317AI, including examples of when it is envisaged that such powers would be exercised.

1.334 The committee also seeks the Treasurer's advice as to whether it would be appropriate to amend the bill to insert (at least high-level) rules or guidance concerning the exercise of ASIC's powers under proposed section 1317AJ.

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[248] Schedule 1, item 2, proposed subsection 1317AAE(4) and Schedule 1, item 15, proposed subsection 14ZZW(3). The committee draws senators' attention to these provisions pursuant to Senate Standing Order 24(1)(a)(i).

[249] Schedule 1, item 10 of the bill also seeks to make contraventions of proposed subsection 1317AAE(1) subject to a civil penalty.

[250] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp 50-52.

[251] Schedule 1, item 9, proposed section 1317AJ. The committee draws senators' attention to this provision pursuant to Senate Standing Order 24(1)(a)(iv).

[252] Explanatory memorandum, pp. 42-43.