Bills Digest no. 101 2009–10
National Broadcasting Legislation Amendment Bill 2009
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Concluding comments
Contact officer & copyright details
Passage history
National Broadcasting Legislation
Amendment Bill 2009
Date introduced: 29 October 2009
House: Representatives
Portfolio: Broadband, Communications and the Digital Economy
Commencement: Schedule 1 and Schedule 2, items 1, and 3-7 commence by
Proclamation or 6 months after Royal Assent which ever day is the earlier.
Schedule 1 item 2 commences immediately after the other items.
Links: The relevant links to the Bill, Explanatory Memorandum
and second reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/. When Bills have been passed they can
be found at ComLaw, which is at http://www.comlaw.gov.au/.
To amend the Australian Broadcasting
Corporation Act 1983 (the ABC Act) and the Special Broadcasting Service
Act 1991 (the SBS Act) to introduce a new board appointment process, and
also to reinstate the position of the staff-elected Director to the Board of
the ABC.
The amendments are part of the Australian Labor Party (ALP) election
commitments to provide a ‘new transparent and democratic board appointment
process in which non-executive Directors are appointed on the basis of merit’.[1] The ALP also promised to restore the staff-elected director on the Australian
Broadcasting Corporation (ABC) Board.
Under current law, the Managing Director is appointed by the
ABC Board for a period of 5 years (section 13 ABC Act). By definition, the
Managing Director is not a non-executive member of the Board (section 3), and
this Bill applies to the appointment of non-executive Directors. Special
provision is made for the new position of the staff-elected Director as well.
The first staff-elected position was introduced by the
Whitlam Government without legislation in 1975, and subsequently abolished by
the Fraser Government. It was then created again in 1986.[2] In 2006, the then Howard Government enacted the Australian Broadcasting
Corporation Amendment Act 2006 (the 2006 amendment) to remove the position
of staff-elected Director to the ABC Board on the ground of perceived conflict
of interest and ‘to ensure the efficient functioning of the ABC Board. ... This
change is in line with modern principles of corporate governance and will also
provide more consistency in governance arrangements for Australian Government
agencies’.[3]
The reintroduction of the position of staff-elected Director
in this Bill is justified in similar terms by this Government, and it may be
the case that the future fate of the position will continue to be determined by
the flavour of the government of the day.
The ABC is an authority for the purposes of the Commonwealth
Authorities and Companies Act 1997 (the CAC Act) which means that, as an
independent statutory body, it is appropriate that it is treated as legally and
financially separate from the Commonwealth.
The Bills Digest to the 2006 amendment explained the duties
of the Director as follows:
Currently, neither the CAC Act nor the ABC Act make a distinction
between the duties of the staff-elected Board member and other members of the
ABC Board. The statutory duty of a staff-elected representative is not to the
staff, specifically, any more that it is for the other Board members.
Therefore, a staff-elected board member who places the interests of staff ahead
of the interests of the ABC as a whole could be in breach of their duties under
the legislation as it currently stands.[4]
The group
known as Friends of the ABC have welcomed the reinstatement of the position of
staff-elected Director and are in support of the other measures in the Bill.
They are lobbying for members of the public to contact both the Opposition and
Senator Fielding to urge support for the Bill.[5]
The Liberal Party has stated that it remains opposed to the
plan to reinstate the position of staff-elected director to the ABC Board on
the basis that:
The position creates the potential for conflict of interest
with the staff-elected director legally bound to act in the best interests of
the Corporation, despite having been appointed as a representative of staff and
elected by them.[6]
The Liberal Party moved amendments
to the Bill in the House of Representatives on 4 February 2010 to remove the
proposed provision, and also to provide that former politicians and staff only
be banned from appointment within 18 months from ceasing their employment. The
Bill proposes a blanket ban on members and former members of all Australian
Parliaments, and persons who are or were ‘senior’ political staffers from being
appointed to the Boards of the ABC or the SBS (new subsection 12(5A)).
At the time when the previous
Government abolished the position of staff-elected Director, the Australian
Greens opposed the change and were strongly in favour of the staff-elected
position on the Board.[7]
In relation to persons who are
ineligible for appointment, the Department’s information on its website about
the merit-based appointment process outlines what is meant by ‘senior’
political staff which will be determined by the Minister by way of legislative
instrument (proposed subsection 3(3)) and will be defined as:
- Chief of staff
- Special adviser
- Principal adviser
- Senior adviser
- Media adviser, and
- Adviser.
A legislative instrument is a normally a disallowable
instrument, unless the relevant legislation declares it not to be. However, no
such declaration applies in this case.
Commenting on the merits-based provisions of the Bill, Dr
Meredith Edwards draws comparisons with the system in Britain, on which the
Bill is based, and states:[8]
There is no question that the process set out in the Bill is
a paradigm shift from the position until now – on paper at least. Cronyism
should be significantly reduced. The power of ministers will be significantly
constrained. But even the best drafted legislation carries risks that the
government’s intentions are not carried through. Here, the British
implementation experience can alert us to potential pitfalls.
She illustrates that lessons from the British system could
improve the Bill by:[9]
- requiring the Minister’s role to be spelt out in more detail in
a separate code of conduct
- providing a civic education component, transparency and
independent monitoring processes
- having an overall audit from outside the Department, by, for
example, the public service commissioner or the Australian National Audit
Office, if not Parliament itself.
The Explanatory Memorandum states that the Bill is not
expected to have any impact on Commonwealth revenue.[10]
Items 4 to 12 of the Bill make changes to the
composition of and method of appointment of the Board.
Currently the ABC Act provides that the Board is to consist
of a Managing Director, and not less than 5, nor more than 7 other Directors. Items
4-6 have the effect that the Board will now also specifically make mention
of the Chairperson, and have not less than 4, nor more than 6 other Directors.[11]
The Governor-General appoints the Chairperson and the
Directors, but new subsection 12(5) provides that before doing this, in
the case of the Chairperson, the Prime Minister must be satisfied of certain
things, and in relation to the other non-executive Directors, the Minister must
be satisfied of certain things. These things include that the person has
experience in connection with broadcasting, communications or management, or
experience in financial or technical matters, or have cultural or other
interests relevant to the oversight of a public organisation providing
broadcasting services (paragraphs 12(5) (c), (d), and (e)). These
requirements are the same that are in the ABC Act currently.
Appointments for the Chairperson and Directors are part-time
for a period of 5 years (subsection 12(2)), and reappointment is possible but
the period of being in office cannot exceed 10 years (new subsection 12(2A)).
Appointments of the Chairperson and Directors must comply
with new Part IIIA which inserts the merit-based process into the ABC
Act (new subsection 5B) but this is not required for the reappointment
to office (new subsections 12(5C) and (5D)).[12]
Under new Part IIIA there
is to be a Nomination Panel (the Panel) established to oversight appointments to
the Board of the Chairperson and Directors. The Panel is to be made up of a
Chair and at least 2 and not more than 3, other members (new section 24E).
Members are appointed by the Secretary of the Prime Minister’s Department (new
subsection 24F(1)), and the Panel is not subject to direction by, or on
behalf of, the Government (new section 24C).
The Bill is silent as to how the
Secretary makes his or her selection of panel members, and it is also silent as
to how the Chair becomes Chair. In practice, this decision is also made by the
Secretary, not by members of the Panel. On 21 October 2008 the Secretary
announced[13] the appointments of Mr Ric Smith as Chair for three years, and Professor Allan
Fels, Ms Leneen Forde and Mr David Gonski as members for various periods of
time ranging from 2 to 3 years. The Secretary can also terminate appointments
on grounds such as misbehaviour, mental or physical incapacity, bankruptcy, and
unacceptable absence, to mention a few examples (new section 24N).
In the selection process for the
Chairperson of the Board, the Panel is required to give a report to the Prime
Minister on the outcome of the selection process which provides a list of at
least three candidates nominated for appointment, along with a comparative
assessment of them (new paragraph 24B(1)(d)).[14] The Prime Minister must then consult with the Leader of the Opposition
before making a recommendation to the Governor-General to appoint the person as
Chairperson (new subsection 24X). However, if a person who has
not been nominated is recommended for the position of Chairperson, the Prime
Minister will be required to table the reasons for the appointment in both Houses
of Parliament within 15 sitting days of the appointment. The Bill does not say
that the Prime Minister is required to consult with the Leader of the
Opposition in this latter case, but the Explanatory Memorandum[15] says that in addition to consulting with the Leader of the Opposition
the Prime Minister must also table his reasons, so the consultation can be
expected to occur in practice.
Similar provision is made in
relation to the appointment of the other non-executive Directors in that a
report is given to the Minister of Broadband, Communications and the Digital
Economy nominating at least 3 candidates for appointment (new paragraph 24B(1)(d).
If the Minister considers that a person not nominated should be appointed, the
Minister must give the Prime Minister written notice specifying who should be
appointed and the reasons for the Minister preferring that person. The Minister
then must table his or her reasons in both Houses within 15 sitting days of the
appointment (subsections 24X(3) and (4)). The requirement to give the
Prime Minister ‘notice’ may suggest that the Prime Minister must in practice also
agree with the Minister. This interpretation is supported in part by the
Explanatory Memorandum which states:
…the Minister must give the Prime Minister a written notice
that identifies that person and sets out the Minister’s reasons for preferring
that person over those candidates nominated by the Nomination Panel (subsection
24X(3)). If the Minister’s preferred candidate is subsequently appointed
by the Governor-General, the Minister must table his or her reasons… (emphasis
added).[16]
The Department of Broadband, Communications and Digital Economy
also states on its website the Prime Minister’s approval is required.[17]
The SBS Act is amended to incorporate changes so that the
Nomination Panel can also make recommendations to the Minister for the
appointment of the Chairperson and Directors of the SBS Board (items 18-30). The Prime Minister does not have a direct role in relation to the
appointment of the Chairperson of the SBS. The Minister must also consult with
the Prime Minister and table reasons if he or she asks the Governor-General to
appoint a person who has not been nominated by the panel (new section 43B of the SBS Act).
Under this Schedule, the staff-elected Director is included
on the Board of the ABC (item 1) and must be elected in accordance with
the regulations (new section 13A).
As noted in the note to new section 13A, as a
member of the Board, the staff-elected Director is a director of a Commonwealth
authority for the purposes of the CAC Act. The CAC Act sets out the duties of
a director which include:
- reporting obligations
- care and diligence
- to act in good faith
- not to misuse the officer’s position, and
- not to misuse information.[18]
Persons who are eligible to stand and to be appointed must
be an employee of the ABC who works at least 22 hours a week, or is working
under a contract for the ABC (new subsection 13A(2)).
Concluding
comments
The Bill takes steps to make the appointment process to the
Boards of the Australian public broadcasters more arms-length from the
Government which go towards lessening the perception of favouritism to the
process. The inclusion of the reinstatement of the staff-elected Director will
have both its supporters and detractors on the issue of improvement in
governance practice.
Diane Spooner
17 February 2010
Bills Digest Service
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