|
|
Home
| Databases
| WorldLII
| Search
| Feedback
Australian Senate Standing Committee for the Scrutiny of Bills - Scrutiny Digests |
|
Purpose
|
This bill seeks to amend the Water Act 2007 and Basin Plan 2012
to implement the Basin Plan in full, including recovering 450 gigalitres (GL) of
additional environmental water,
and to implement recommendations from the Water
Market Reform: Final Roadmap, including introducing water markets reform
measures
aimed at improving the transparency and integrity of water
markets.
|
|
Portfolio
|
Environment and Water
|
|
Introduced
|
House of Representatives on 6 September 2023
|
|
Bill status
|
Before the Senate
|
2.14 Schedule 3 to the bill seeks to amend the Water Act 2007 (Water Act) to provide for a Water Markets Intermediaries Code (the Code) to regulate the conduct of eligible water market intermediaries towards participants and potential participants in the water market. Proposed section 100G provides that regulations may prescribe the Code and outlines what matters the Code may make provision for.[87] The Code may also make provision for pecuniary and civil penalties, not exceeding 600 penalty units.[88]
2.15 While the bill sets out the kinds of matters that may be included in the Code, the detail of its content and operation is ultimately left to the Code itself which will be made through regulation. Certain provisions have been noted as being of particular concern, which include provisions that prescribe broad delegations of administrative powers.
2.16 In Scrutiny Digest 12 of 2023, the committee requested the Minister for Environment and Water's (the minister) advice as to:[89]
• why it is considered appropriate to leave the content of the Water Markets Intermediaries Code (the Code) to regulation;
• why it is considered necessary and appropriate to confer various functions and powers in the Code to any person or body, whether or not a participant in the water market (unless it is a function or power providing an exemption to the Code);
• whether persons upon whom functions or powers are conferred will be required to possess the appropriate training, qualifications, skills or experience, and what safeguards are in place to ensure functions and powers are only exercised by appropriate persons;
• whether the Privacy Act 1988 applies to any information that is collected, stored and disclosed under the Code; and
• whether other safeguards exist to protect an individual's personal information.
2.17 The committee also drew this matter to the attention of the Senate Standing Committee for the Scrutiny of Delegated Legislation.
2.18 The minister advised that the Code is intended to largely mirror the existing industry codes framework administered by the Australian Competition and Consumer Commission (ACCC) under Part IVB of the Competition and Consumer Act 2010 (CC Act). Prescribing the Code in delegated legislation would ensure the water markets intermediaries are subject to the standard safeguards that apply in similar industries. The minister advised this approach would allow for greater flexibility to update the Code in accordance with best industry practices and to respond to changes in the regulatory landscape.
2.19 The minister advised that as the Code would be made in regulations, including proposed subsections 100G(3), 100G(4) and paragraph 100G(7)(b) would allow for conferrals of functions and powers on bodies to be added or updated efficiently. The minister also advised that it is intended that proposed section 100G may be used to confer function and powers on that would complement, not duplicate, the ACCC's proposed role as the appropriate enforcement agency and the purpose of the above subsections is for conferrals to bodies other than the ACCC. For example, dispute resolution functions may be conferred on another body to complement the ACCC's role. However, any proposal to confer functions or powers on a body other than the ACCC would be expected to be subject to consultation with the ACCC, the Australian Water Brokers Association and more generally, water markets intermediaries and their clients.
2.20 Further, in relation to privacy, the minister advised that the bill would allow for the Code to provide obligations relating to the keeping and retention of personal information, as well as the power to compel information or documents to be given. This information may include personal information about intermediaries and their clients, such as a person's name, address, water account and other financial information. The minister advised that this information would be collected and stored by intermediaries and may be disclosed by intermediaries to the ACCC, as the regulator.
2.21 The minister advised that it is anticipated most intermediaries would be body corporates, ABN holders, partnerships or trusts, which are not covered under the Privacy Act 1988, but where applicable, the Privacy Act 1988 would apply to personal information that is disclosed. Further, the bill would also provide other safeguards for where personal information has been obtained by the ACCC. Under the bill, information containing personal information would be classified as protected information and would be subject to the protections outlined in the CC Act.
2.22 The committee thanks the minister for this response.
2.23 While acknowledging the need for flexibility such that the Code can be updated in accordance with best industry practice and changing behaviours, the committee reiterates that without an awareness of what is in the Code itself, the committee remains concerned that it cannot assess the appropriateness of the provisions. The committee remains concerned that the Code may contain provisions that should be subject to the full range of parliamentary scrutiny that delegated legislation is not subject to.
2.24 However, the committee notes the advice provided by the minister in relation to provisions previously highlighted as being of particular concern to the committee.
2.25 The committee requests that an addendum to the explanatory memorandum containing the key information provided by the minister be tabled in the Parliament as soon as practicable. The committee notes the importance of these explanatory materials 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).
2.26 The committee draws this matter to the attention of senators and leaves to the Senate as a whole the appropriateness of leaving the content of the Water Markets Intermediaries Code to delegated legislation.
2.27 Proposed subsection 239AJ(2) provides that the ACCC may give written notice to a person to require them to give information, produce documents or appear before the ACCC, or a member of staff of the ACCC, to give evidence. Proposed subsection 239AJ(5) provides that refusal or failure to comply with a notice, or in purported compliance with the notice knowingly giving information or evidence that is false or misleading, holds a penalty of imprisonment of 2 years or 100 penalty units, or both.
2.28 The committee's concerns are heightened in this case given the penalties attach to an offence which reverses the evidential burden of proof in relation to particular elements of the offence. This would require the defendant to raise evidence about the matter. Further, in one instance the offence reverses the legal burden of proof, which requires the defendant to positively prove the matter.
2.29 In Scrutiny Digest 12 of 2023, the committee requested the minister's advice as to the appropriateness of the penalty in proposed subsection 239AJ(5), and whether it is broadly equivalent to the penalties for similar offences.[92]
2.30 The minister advised that the proposed maximum penalty in subsection 239AJ(5) would be appropriate as proposed section 239AJ would likely be the ACCC's primary tool for investigating contraventions of the water market integrity provisions in the Water Act such as insider trading and market manipulation. The minister advised that the penalty for proposed section 239AJ must be significant to avoid a potentially perverse outcome where a person could avoid detection of significant misconduct by not producing documents and be subject to a much smaller penalty.
2.31 Further, the minister advised that the penalty in proposed subsection 239AJ(5) is broadly equivalent to certain penalties in the Australian Securities and Investments Commission Act 2001 (ASIC Act), which is a relevant comparison. The minister advised that the penalty for failing to comply with a requirement to appear to answer questions under section 19 or produce books or financial products under section 31 of the ASIC Act is 2 years imprisonment. Similarly, the penalty for failing to comply with a requirement to provide certain information in relation to an acquisition or disposal of financial products under section 41 of the ASIC Act is 120 penalty units.
2.32 The committee thanks the minister for this advice.
2.33 The committee requests that an addendum to the explanatory memorandum containing the key information provided by the minister be tabled in the Parliament as soon as practicable. The committee notes the importance of these explanatory materials 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).
2.34 Proposed subsection 100ZA(1) provides that the ACCC may issue a public warning notice about the conduct of a person if:
• the ACCC has reasonable grounds to suspect the conduct may constitute a contravention of the Code;
• the ACCC is satisfied that one or more persons has suffered, or is likely to suffer, detriment as a result of the conduct; and
• the ACCC is satisfied that it is in the public interest to issue the notice.
2.35 While there is likely a strong public interest in providing public warnings, the committee considers that public warning notices about the conduct of a person may engage procedural fairness and privacy concerns.
2.36 In Scrutiny Digest 12 of 2023, the committee requested the minister's advice as to whether procedural fairness exists in relation to the issuing of a public warning notice.[95]
2.37 The minister advised that proposed subsection 100ZA(1) is based on section 223 of the Australian Consumer Law and would include information about the conduct that the ACCC has reasonable grounds to suspect may constitute a contravention of proposed Part 5 of the bill or the Code.
2.38 This provision would not seek to limit the fundamental common law right of procedural fairness as the ACCC's general principles in relation to enforcement and public warning notices include:
• taking into account procedural fairness and considering what is required to afford appropriate procedural fairness in the particular circumstances of each case; and
• in the context of section 223 of the Australian Consumer Law, considering whether there is an imminent need to issue a public warning notice to inform consumers so they can avoid suffering detriment and considering the likely impact on businesses involved.
2.39 The minister also advised that while proposed section 100ZA would be interpreted in its own statutory context and the particular circumstances of each case, the above considerations are likely to be relevant in the exercise of the power to issue a public warning notice under proposed section 100ZA.
2.40 The committee thanks the minister for this advice.
2.41 The committee notes that proposed subsection 100ZA(1) does not seek to limit the fundamental common law right to procedural fairness.
2.42 The committee requests that an addendum to the explanatory memorandum containing the key information provided by the minister be tabled in the Parliament as soon as practicable. The committee notes the importance of these explanatory materials 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).
[85] This entry can be cited as: Senate Standing Committee for the Scrutiny of Bills, Water Amendment (Restoring Our Rivers) Bill 2023, Scrutiny Digest 13 of 2023; [2023] AUSStaCSBSD 212.
[86] Schedule 3, proposed sections 100G and 100ZD. The committee draws senators' attention to these provisions pursuant to Senate standing order 24(1)(a)(i), (ii) and (iv).
[87] Proposed subsection 100G(2) outlines that these matters may include imposing an obligation upon eligible water markets intermediaries to act in the best interests of clients, the provision of information to clients, the retention of records for the purposes of the bill and trust accounting, holding clients' eligible tradeable water rights, holding professional indemnity insurance, and keeping client records.
[88] Proposed sections 100J and 100K.
[89] Senate Scrutiny of Bills Committee, Scrutiny Digest 12 of 2023 (18 October 2023) pp. 2–5.
[90] The minister responded to the committee's comments in a letter dated 2 November 2023. A copy of the letter is available on the committee's webpage (see correspondence relating to Scrutiny Digest 13 of 2023).
[91] Proposed subsection 239AJ(5). The committee draws senators' attention to these provisions pursuant to Senate standing order 24(1)(a)(i).
[92] Senate Scrutiny of Bills Committee, Scrutiny Digest 12 of 2023 (18 October 2023) pp. 6–8.
[93] The minister responded to the committee's comments in a letter dated 2 November 2023. A copy of the letter is available on the committee's webpage (see correspondence relating to Scrutiny Digest 13 of 2023).
[94] Proposed subsection 100ZA(1). The committee draws senators' attention to these provisions pursuant to Senate standing order 24(1)(a)(iii).
[95] Senate Scrutiny of Bills Committee, Scrutiny Digest 12 of 2023 (18 October 2023) pp. 5–6.
[96] The minister responded to the committee's comments in a letter dated 2 November 2023. A copy of the letter is available on the committee's webpage (see correspondence relating to Scrutiny Digest 13 of 2023).
AustLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.austlii.edu.au/au/other/AUSStaCSBSD/2023/212.html