Customs Amendment (Controlled Trials) Bill 2021 - Commentary on Ministerial Responses [2022] AUSStaCSBSD 9 (4 February 2022)

• Customs Amendment (Controlled Trials) Bill 2021
• Significant matters in delegated legislation7

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Customs Amendment (Controlled Trials) Bill 2021

Purpose	This bill seeks to amend the Customs Act 1901 to facilitate time-limited trials with approved entities in a controlled regulatory environment.
Portfolio	Home Affairs
Introduced	House of Representatives on 24 November 2021
Bill status	Before the House of Representatives

Significant matters in delegated legislation^[7]

2.12 In Scrutiny Digest 18 of 2022 the committee requested the minister's more detailed advice regarding:

• why it is considered necessary and appropriate to leave the qualification criteria for participation in controlled trials to delegated legislation; and

• whether the bill can be amended to include at least high-level guidance regarding these matters on the face of the primary legislation.^[8]

Minister's response^[9]

2.13 The minister advised:

Administering the controlled trials framework in delegated legislation enables controlled trials to be undertaken with a greater degree of certainty and administered in a timely manner. Due to the short timeframes for each of the trials, it is critical to the success of the program that there is flexibility to refine those elements in a timely manner before the next phase commences.
While qualification criteria apply generically, the Australian Border Force (ABF) will also require the flexibility to update the qualification criteria as the types of trials conducted and customs practices evolve. While initial trials may be small and the qualification criteria would be basic, as the types of trials conducted evolve and become more complex, so would the base requirements for participants to ensure as much consistency as possible across the suitability of participants. Placing qualification criteria in delegated legislation provides a degree of consistency across all participants in any trial, while allowing for the fact that appropriate qualification criteria at one point would not necessarily be sufficient in later trials.
If the Customs Act 1901 (Customs Act) needed to be amended each time the qualification criteria for trials needed to change, this could delay new trials relying on the amended criteria to potentially lengthy legislative change processes. This would frustrate the ABF’s ability to conduct future controlled trials, which may require revised base level requirements for participation to meet emerging risks in international supply chain security.
This approach to the use of delegated legislation is not unprecedented in this space. The Australian Trusted Trader (ATT) Programme also utilises qualification criteria in delegated legislation, which is similarly required to allow for expedient updates to meet emerging risks in international supply chain security.
The regulatory framework for controlled trials has been designed to balance stability and transparency of the program, allowing reasonable flexibility to take account of the dynamic international trade environment and ensure the continued relevance of the program to traders.
I note that as the qualification criteria are determined in a legislative instrument, they will be subject to parliamentary scrutiny and disallowance. The Comptroller-General of Customs’ powers to make rules with respect to controlled trials, including qualification criteria, cannot be delegated.
The ABF is separately developing the Regulatory Sandbox Guidelines which will contain specific details of how to propose and manage trials, and will consult with industry on these in coming months.

Committee comment

2.14 The committee thanks the minister for this response. The committee notes the minister's advice that administering the controlled trials framework in delegated legislation enables controlled trials to be undertaken with a greater degree of certainty and administered in a timely manner. The committee also notes the minister's advice that while initial trials may be small and the qualification criteria would be basic, as the types of trials conducted evolve and become more complex, so would the base requirements for participants to ensure as much consistency as possible across the suitability of participants.

2.15 The committee further notes the minister's advice that the Australian Border Force is separately developing the Regulatory Sandbox Guidelines which will contain specific details of how to propose and manage trials. The minister advised that the Australian Border Force will consult with industry on these guidelines in the coming months.

2.16 While noting the minister's advice, the committee reiterates its consistent scrutiny view that significant matters, such as the qualification criteria for participation in controlled trials, should be included in primary legislation unless a sound justification is provided for the use of delegated legislation. The committee has generally not accepted a desire for administrative flexibility or a reliance on non‑legislative policy guidance to be sufficient justifications for leaving significant matters to delegated legislation. As such, it remains unclear to the committee why at least high-level guidance in relation to these matters could not be included on the face of the primary legislation.

2.17 The committee draws this matter to the attention of senators and leaves to the Senate as a whole the appropriateness of leaving the qualification criteria for participation in controlled trials to delegated legislation.

2.18 The committee also draws this matter to the attention of the Senate Standing Committee for the Scrutiny of Delegated Legislation.

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^[7] Schedule 1, item 4, proposed section 179K. The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(iv).

^[8] Senate Scrutiny of Bills Committee, Scrutiny Digest 18 of 2021, pp. 15-16.

^[9] The minister responded to the committee's comments in a letter dated 14 December 2021. A copy of the letter is available on the committee's website: see correspondence relating to Scrutiny Digest 1 of 2022 available at: www.aph.gov.au/senate_scrutiny_digest.