Purpose of the Bill

The purpose of the Export Control Amendment (Miscellaneous Measures) Bill 2020 (the Bill) is to make minor, largely technical amendments to the Export Control Act 2020 (the 2020 Act). The amendments:

• clarify the operation of the fit and proper person test when varying the registration of export establishments
• provide greater flexibility in the requirements for lodging a Notice of Intention to export
• enable the Rules to provide guidance in relation to the approval of export permits
• enable the Rules to modify provisions of the 2020 Act and the Administrative Appeals Tribunal Act 1975 in relation to review of tariff rate quota certificate decisions and
• provide that the Rules may incorporate matters contained in agreements between Australia and other countries that relate to tariff rate quotas.

Background

Reforms to legislative framework

The Department of Agriculture, Water and the Environment is currently working to reform the legislative framework for Australia’s agricultural exports. The 2020 Act will replace the existing Export Control Act 1982 and 16 other statutes, and is intended to provide a more streamlined, overarching framework for the regulation of exports.[1] The Department provided the following explanation to the Senate Committee inquiry into the Export Control Bill 2019, which became the Export Control Act 2020:

The new export legislative framework provides a more contemporary, flexible and efficient approach to the regulation of agricultural exports. This will see our exporters better placed to take advantage of commercial opportunities in global markets…

The new framework enables the government to be more responsive to changes in importing country requirements. The [Export Control Bill 2019] is designed to support, and give effect to, Australia’s rights and obligations under relevant international agreements, including trade-related agreements.

… The 2019 Bill is deliberately commodity neutral. It provides information about regulatory provisions that may be applied to various export operations and, regardless of the commodity, the penalties and sanctions that apply if there are instances of non-compliance with these provisions. The 2019 Bill will be supported by legislative instruments in the form of commodity specific rules that describe which regulatory provisions apply to each commodity, and the operational detail of how they will apply.[2]

Rules made under the 2020 Act will provide much of the detail of the specific requirements which agricultural exporters must meet. The Department has released an Exposure Draft of the Export Control Rules 2020 and is currently conducting consultations on the 12 draft Rules in three stages.[3]

The Export Control Act 2020 has received Royal Assent but, at the time of writing, only sections 1 and 2 have commenced. The rest of the Act is due to commence at a single time (in the Australian Capital Territory) to be fixed by Proclamation. However, if the provisions do not commence before 3AM ACT time on 28 March 2021, they commence at that time.[4] According to the Department, both the 2020 Act and the Export Control Rules 2020 are intended to commence on 28 March 2021.[5]

Exposure Draft

The current Bill makes only minor amendments to the 2020 Act. The Department released an Exposure Draft in October 2020, as part of a public consultation process. It states that it received one submission on the Exposure Draft, but has not publicly released this.[6]

The Bill has not changed from the Exposure Draft.

Committee consideration

Senate Standing Committee for Selection of Bills

In its reports dated 12 November, 3 December and 9 December 2020, the Selection of Bills Committee deferred consideration of the Bill.[7]

Senate Standing Committee for the Scrutiny of Bills

The Scrutiny of Bills Committee reported on the Bill on 2 December 2020.[8] The Committee raised concerns about provisions which:

• extend the power for Rules to modify the operation of primary legislation in respect of internal and merits review of tariff rate quota certificate decisions and
• extend the incorporation of external materials into Rules by reference.

The Committee has requested further information from the Minister on both issues. Its concerns are discussed further under ‘Key issues and provisions’.

Policy position of non-government parties/independents

Non-government parties and independents do not appear to have publicly commented on the Bill at the time of writing.

Position of major interest groups

No major interest group has publicly commented on the Bill at the time of writing.

Financial implications

The Explanatory Memorandum states the Bill will have no financial impact on the Australian Government Budget.[9]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[10]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights had no comment on the Bill.[11]

Key issues and provisions

Fit and proper person test

Section 372 of the 2020 Act sets out the test for determining whether a person is a ‘fit and proper person’ for the purpose of certain applications, including in relation to the registration of establishments for export operations and the granting of export licences.

Under the current provisions, the Secretary must be satisfied the occupier of an establishment is a fit and proper person when deciding whether to:

• register the establishment for export operations[12]
• renew the registration[13] or
• make any variations in relation to the registration—either on application from the occupier[14] or on the Secretary’s own motion.[15]

Variations may include: the kinds of operations or goods which the registration covers; the conditions of registration; the particulars relating to the registration (including correcting minor or technical errors); or the registration expiry date.[16]

Item 1 of the Bill amends section 120 of the 2020 Act so that the ‘fit and proper person’ test applies to an occupier’s application to vary registration only where a new person has started, or is to start, managing or controlling export operations at the establishment. Where a variation application is non-personnel related, the Secretary is not required to determine whether the occupier remains a fit and proper person.

The Explanatory Memorandum states the measure will ‘ensure that the level of regulatory oversight the department has is proportionate to the type of variation and risk that is being managed’.[17] As part of the consultation process the Department also stated the amendment will ‘remove administrative burden on the department and industry’, though this rationale is not provided in the Explanatory Memorandum.[18]

Notice of Intention requirements

Exporters may be required to submit a Notice of intention (NOI) to export a consignment of prescribed goods.[19] Section 243 of the 2020 Act sets out the requirements for an NOI, and provides that it must comply with any manner or form approved by the Secretary, as well as with requirements prescribed by the Rules. Items 4 to 7 of the Bill amend this provision to clarify its operation and allow for greater flexibility in NOI requirements.

Item 5 amends subsection 243(1) to make clear that an NOI is only required if the Rules provide for it. This appears to be in line with the existing intent of the legislation.[20]

Item 6 amends the existing requirement that an NOI be given at a time, or within a period, prescribed by the Rules, to provide that the Secretary may also allow an NOI to be given at a different time or period from what is otherwise prescribed.[21]

Currently, section 243 is silent on the Secretary’s approval or rejection of a submitted NOI. Proposed subsection 243(5), inserted by item 7, states that the Rules may:

• provide that the Secretary may approve or refuse to approve an NOI and
• make provision for matters related to the Secretary’s decision to approve or refuse to approve the notice.

Export permits

Section 225 of the 2020 Act deals with the Secretary’s power to decide to issue or refuse to issue an export permit. Subsection 225(2) currently states that in making a decision, the Secretary may have regard to ‘any matter the Secretary considers relevant’, including:

• whether the requirements of the Act have been complied with, or will be complied with before the goods are imported into the importing country and
• whether the importing country requirements relating to the goods have been met, or will be met before the goods are imported into the importing country.

Item 2 amends this subsection to provide the Secretary may also have regard to whether any other requirement prescribed by the Rules has been met, or will be met before the goods are imported into the importing country. During the consultation process the Department stated:

Some commodities have different requirements for issuing export permits and a power to enable the secretary to make Rules will ensure the requirements can be provided for by legislation.[22]

However, the amendment does not mandate that the Secretary has regard to such matters. The rationale provided by the Department is not replicated in the Explanatory Memorandum.

Incorporating documents in Rules

Section 432 of the 2020 Act contains the Secretary’s rule-making power. This provision allows the Secretary to make rules prescribing matters:

• required or permitted by the Act to be prescribed by the rules or
• necessary or convenient to be prescribed for carrying out or giving effect to the Act.

Subsection 432(3) provides that the rules may incorporate, adopt or apply matters contained in other specified types of documents, as in force or existing from time to time. This currently includes, for example, any matter contained in the Australian Standards for the Export of Livestock, the Australia New Zealand Food Standards Code, and the Codex Alimentarius issued by the body known as the Codex Alimentarius Commission of the Food and Agriculture Organization of the United Nations and the World Health Organization.

This also includes, under existing paragraph 432(3)(g), matters contained in an instrument or writing that sets out or provides a method for calculating the tariff rate quota for the importation of a kind of goods into a country, where the instrument or writing is made by the relevant authority or body responsible for regulating imports into that country.

Item 14 amends the wording of paragraph 432(3)(g) and inserts proposed paragraph 432(3)(h), which provides that the Rules may also incorporate any matter contained in an agreement between Australia and another country or body, that sets out or provides a method for calculating the tariff rate quota for the importation of a kind of goods into a country covered by that agreement. The Explanatory Memorandum states that this will enable the Rules to capture instruments:

… which may not be made by an authority or body responsible for regulating the importation of a kind of goods into that country from Australian territory. An example of an instrument may include a free trade agreement between Australia and another country.[23]

This type of provision means that the content of the Rules will change in accordance with any changes made to the external document. The Scrutiny of Bills Committee has noted such provisions raise general scrutiny concerns as they:

• enable changes to be made to the law in the absence of parliamentary scrutiny
• can create uncertainty in the law and
• mean that those obliged to obey the law may have inadequate access to its terms—this is particularly the case where relevant information, including standards and other incorporated documents, are not publicly available or require a fee to access.[24]

In the context of the current Bill, the Committee noted that the Explanatory Memorandum ‘does not identify or explain where the incorporated materials may be accessed, or whether they will be freely available to all members of the public’.[25] It also expressed concern that the Explanatory Memorandum does not address why it is necessary for significant matters (the calculation of tariff rate quotas) to be left to be determined in non-legislative documents. The Committee requested the Minister’s advice on these matters.[26]

The Minister’s response was received by the Committee on 20 December 2020, but has not yet been published.[27]

Review of decisions

Tariff rate quotas between the Government and trading partners enable a specific quantity of exported product to enter the importing country at a reduced tariff rate.[28] Section 264 of the 2020 Act enables the Rules to make provision for the establishment and administration of a system of tariff rate quotas for the export of goods, including in relation to:

• determining the amount of tariff rate quota for the export of goods for a period
• methods for determining tariff rate quota entitlements for the export of goods
• establishing and maintaining a register of tariff rate quota entitlements and
• tariff rate quota certificates, including revocation of certificates.[29]

Tariff rate quota certificates may be issued in respect of an export consignment to facilitate its entry under the applicable concessional tariff rate.[30]

Section 386 of the 2020 Act currently provides that the Rules may modify the operation of:

• subsection 383(4) of that Act, which relates to internal review of decisions in relation to tariff rate quota entitlements and
• subsection 43(1) of the Administrative Appeals Tribunal Act 1975 (AAT Act) which relates to merits review of decisions in relation to tariff rate quota entitlements.

Subsection 386(4) provides that the modifications may only be for the purpose of ensuring that tariff rate quota amounts are not exceeded.

Items 9 to 13 extend the scope of this provision so that it also applies in relation to decisions about tariff rate quota certificates.

The Scrutiny of Bills Committee expressed concern about the amendments, which enable delegated legislation to modify primary legislation. The Committee stated that such provisions, referred to as Henry VIII clauses:

… impact on the level of parliamentary scrutiny and may subvert the appropriate relationship between the 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 provides no justification as to why it is necessary and appropriate for rules to modify the operation of the Act or the AAT Act.[31]

The Committee further stated that its concerns were heightened by the fact that the modifications may be in relation to review of decisions, and may therefore affect an individual’s right to a fair hearing. It requested advice from the Minister as to why the provisions are considered necessary and appropriate, the circumstances in which it is envisioned the powers will be used, and whether they may trespass on the right to a fair hearing.[32]

At the time of writing this Digest, the Minister’s response had not been received by the Committee.[33]