Introductory Info

Date introduced: 18 March 2021
House: House of Representatives
Portfolio: Agriculture, Water and the Environment
Commencement: Sections 1-3 commence on the date the Act receives Royal Assent. Schedule 1 commences the later of the day after Royal Assent or immediately after the commencement of the Federal Circuit and Family Court of Australia Act 2021.

Purpose of the Bill

The purpose of the Sydney Harbour Federation Trust Amendment Bill 2021 (the Bill) is to amend the Sydney Harbour Federation Trust Act 2001 (Cth) (the Harbour Trust Act) to:

• allow the Harbour Trust to operate as an ongoing entity
• amend the current arrangements for membership of the Harbour Trust Board
• increase the threshold amount for contracts requiring the Minister’s approval
• introduce changes to the current leasing arrangements
• expand the list of matters which the Regulations can provide for and
• introduce new compliance and enforcement provisions.

Background

Establishment of the Trust

During the 1990s, a number of former defence sites located on the Sydney Harbour foreshore were in the process of being vacated by the Commonwealth Department of Defence. There was strong interest in the community that these sites be preserved for public use, instead of the land being sold or redeveloped.[1] This led to a number of groups being established to lobby for the protection and rehabilitation of these sites, forming a coalition known as the Defenders of the Sydney Harbour Foreshores.[2]

Following negotiations with the New South Wales Government during 1997 and 1998, the Commonwealth Coalition Government included a commitment in its 1998 election platform to:

… return Sydney Harbour foreshore defence sites to the people of Australia and protect the national and heritage values of those sites ... [by] provid[ing] $90 million from the Federation Fund and establish[ing] a Sydney Harbour Federation Trust ... [which will] assume management and planning responsibilities for the sites ... for a period of ten years.[3]

The Federal ALP opposed the proposal for the Sydney Harbour project at the time of the 1998 election on the grounds that it was an 'inappropriate' use of the Federation Fund given that the Defence Department would be a direct beneficiary.[4]

The Sydney Harbour Federation Trust (the Trust) was established as a transitional body in September 1998 and commenced activities in March 1999, with an interim board and executive director appointed to guide the activities of the Trust and to report to the Minister for the Environment.[5] An exposure draft of the Sydney Harbour Federation Trust Bill (the SHFT Bill) was released for public comment in August 1999 and received significant criticism from stakeholders who were concerned about how the Trust would be funded.[6] The SHFT Bill was introduced into the Senate four months later where it was substantially amended. The SHFT Bill was then referred to the House of Representatives, where it was further amended, before being returned to the Senate.[7] The SHFT Bill was passed by both Houses of Parliament in February 2001 and the Harbour Trust Act took effect in September 2001.[8] In 2007, the Coalition Government, with bipartisan support, passed the Sydney Harbour Federation Trust Amendment Bill 2007 which extended the life of the Trust from 2011 to 2033.[9]

Objectives of the Trust

Section 6 of the Harbour Trust Act outlines the objectives of the Trust:

• to ensure that management of Trust land contributes to enhancing the amenity of the Sydney Harbour region
• to protect, conserve and interpret the environmental and heritage values of Trust land 
• to maximise public access to Trust land
• to establish and manage suitable Trust land as a park on behalf of the Commonwealth as the national government
• to co‑operate with other Commonwealth bodies that have a connection with any Harbour land in managing that land and
• to co‑operate with New South Wales, affected councils and the community in furthering the above objects.

Harbour Trust sites

Under the Harbour Trust Act, ‘Trust land’ is defined to mean any land that vests in the Trust and is held by the Trust from time to time for and on behalf of the Commonwealth.[10] The majority of the land was vested in the Trust by the Navy in April 2003, with Sub Base Platypus vested in July 2005 and the Macquarie Lighthouse vested in July 2008.[11]

The Trust is currently responsible for managing the following sites:

• Chowder Bay (Headland Park, Mosman)
• Cockatoo Island (Sydney Harbour)
• Former Marine Biological Station (Watson’s Bay)
• Georges Heights (Headland Park, Mosman)
• Macquarie Lighthouse (Vaucluse)
• Middle Head (Headland Park, Mosman)
• North Head Sanctuary (Manly)
• Sub Base Platypus (North Sydney)
• Woolwich Dock and Parklands (Woolwich)
• Snapper Island (Note: Yet to be formally transferred).[12]

Independent Review of the Trust

On 30 October 2019 the Minister for the Environment, Sussan Ley (the Minister), announced an independent review (the Review) of the Trust.[13] This was the first review that had been conducted since the Trust began operations in 1999 and was aimed at ensuring that the Trust’s legislative, financial and governance arrangements remain fit for the future.[14] Carolyn McNally and Erin Flaherty were appointed to undertake the Review, supported by a secretariat from the Department of Agriculture, Water and the Environment.[15]

Process

Following the announcement of the Review, a discussion paper was released, and stakeholders were given a three-month period in which to submit their views in relation to the terms of reference. Four public forums were also held, as well as over seventy meetings with stakeholders.[16] The reviewers were originally expected to report by March 2020.[17] There were some concerns that the five-month timeframe for conducting the Review may lead to a rushed process and inadequate consultation.[18]

Report

On 18 June 2020, the Minister publicly released the report prepared by McNally and Flaherty.[19] The Review made 21 recommendations, the most significant being that the Trust should no longer be considered a transitional body but, instead, become an ongoing entity, with land retained by the Commonwealth.[20] The Review also recommended that additional funding from the Government was required to continue with the rehabilitation of sites managed by the Trust, particularly Cockatoo Island and North Head Sanctuary.[21] Other recommendations related to the ongoing governance and maintenance of the Trust; collaboration and partnership with the community and with the NSW Government; powers of the Trust with respect to leasing and entering into contracts; and specific recommendations with respect to Cockatoo Island and North Head Sanctuary.[22]

Government response

In her letter to the Chair of the Trust releasing the report, the Minister stated:

The Government agrees with the reviewers' key recommendation that the Trust continues as an ongoing Commonwealth entity and broadly accepts all other recommendations subject to more detailed planning and consultation. I will begin consultation soon on draft legislation to amend the existing Act to address the recommendations.[23]

This was reflected in the Government’s response to the Review’s report.[24]

Committee consideration

Senate Selection of Bills Committee

At its meeting of 13 May 2021, the Senate Standing Committee for Selection of Bills deferred consideration of the Bill to its next meeting.[25]

Senate Scrutiny of Bills Committee

The Senate Standing Committee for the Scrutiny of Bills reported on this Bill on 21 April 2021.[26] The Committee raised concerns that the Explanatory Memorandum to the Bill does not provide sufficient justification for the expansion of the regulation-making power contained in section 73 of the Harbour Trust Act (the proposed amendments are contained in Part 2 of the Bill – see pages 17 to 18 below for further discussion).[27] The Committee noted that significant matters, such as requirements in relation to offences and penalties, and the disposal of property and animals, should be included in primary legislation which is subject to the full range of parliamentary scrutiny, unless sound justification is provided.[28]

The Committee requested the Minister’s detailed advice as to:

• why it is considered necessary and appropriate to leave requirements relating to offences and penalties and requirements relating to the removal and disposal of objects and other matter 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.[29]

The Minister’s response was received by the Committee on 12 May 2021 but has yet to be published at the time of writing this Digest.[30]

Policy position of non-government parties/independents

A number of members of Parliament whose electorates include Trust sites provided submissions to the Review.

Senator Andrew Bragg provided a detailed submission to the Review, stating that ‘it is of critical importance that our most prized sites in Sydney Harbour continue to be rehabilitated and made accessible to the public’.[31] He advocated that the Trust should be preserved in perpetuity; the mandate of historical, environment and cultural preservation be maintained; and enhanced revenue models should be explored, such as long term leases, consistent with the intent of the Trust.[32]

In her submission, Tanya Plibersek MP stated that she hoped to see ‘the Trust continue to prioritise the public accessibility of its lands’ and encouraged the Trust to consider establishing a museum on its land dedicated to Australia’s First Nations.[33]

Zali Steggall MP, also a member of the Trust Community Advisory Committee (CAC), submitted:

• the Harbour Trust should retain custodian of Trust lands in perpetuity and should remain a Commonwealth entity
• the Commonwealth should fund the Trust on an ongoing basis to rehabilitate and maintain these sites
• the existing legislative protections must be maintained and not diluted to ensure these sites are kept safe from redevelopment
• the Harbour Trust Board should be modified and depoliticised with identified positions assigned to persons with experience and qualifications in indigenous culture, military history, heritage and the environment and
• the relationship between the Harbour Trust Board and the CAC should be strengthened by appointing a member of the CAC to the Board.[34]

Position of major interest groups

The Trust

In its submission to the Review, the Trust stated that ‘recent financial headwinds and legislative uncertainty facing the Harbour Trust present significant risk to our ability to achieve and maintain the great shared vision that is at the foundation of our work’.[35] In order to meet these challenges, the Trust sought greater financial support from the Government and confirmation of the Trust as an ongoing entity.[36] The Trust also advocated for the Harbour Trust Act to be amended to allow the Trust to enter into leases of up to 49 years and for the minimum threshold on contracts subject to Ministerial approval be increased.[37]

NSW State Government

The NSW State Government noted that the original purpose of the Trust was to act as a transitional body to manage the restoration of the sites ahead of them being transferred to NSW for inclusion in the national parks and reserve system.[38] The NSW Government submitted that it is the right entity to oversee the conversation and management of Trust sites into the long term and now is the time to plan for the orderly transition of land to NSW in accordance with the provisions of the Harbour Trust Act.[39] Following release of the Review’s report, NSW Planning Minister Rob Stokes said that the recommendation that the land continue to remain vested in the Trust was ‘a backward step’ and ‘the Review was a “cover-up of the lack of ambition" for the preservation and promotion of the seven former defence sites by the Morrison government’.[40]

Community groups

There is strong interest from the community with respect to the Trust and the Review received submissions from a number of community groups and individuals who have an interest in particular Trust sites.[41] Some stakeholders expressed concerns about the role of the Trust and voiced a preference that the sites be instead included in the NSW national parks and reserve system, in partnership with the local community.[42] However, there was a majority view amongst stakeholders that the sites should not be returned to the NSW Government.[43] This was in part due to a view that neither state nor local councils had the skills or capacity to properly manage these sites.[44] Other stakeholders were also concerned about what would be done with the sites upon their return to the NSW Government. The Headland Preservation Group (HPG) stated in its submission that ‘HPG has been advised by the Trust that the lands will not end up in the National Parks portfolio’.[45]

Financial implications

The Explanatory Memorandum states that there is no financial impact on the Commonwealth associated with the Bill’s amendments to the Harbour Trust Act.[46]

In the 2020–21 Budget, the Government made $40.6 million available to the Harbour Trust to enable it to address critical repairs and maintenance over the next four years.[47] This is in addition to the Government releasing $9 million which was being held in the Harbour Trust’s accounts following the sale of eight houses at Markham Close, Mosman.[48]

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.[49]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights (PJCHR) commented on this Bill on 31 March 2021.[50] In its comments, the PJCHR raised concerns about regulation 11 of the Sydney Harbour Federation Trust Regulations 2001 (the Regulations) which currently provides that it is an offence for a person to ‘organise or participate in a public assembly on Trust land’.[51] The PJCHR identified that the new compliance and enforcement provisions set out in the Bill will apply with respect to regulation 11 of the Regulations (see pages 18 to 20 below for a detailed discussion of these amendments). Therefore, the PJCHR found that ‘by providing for the enforcement of a prohibition against organising or participating in organised assemblies, this Bill engages and appears to limit the rights to freedom of expression and assembly’.[52]

The PJCHR noted that ‘the statement of compatibility does not identify that this Bill engages the rights to freedom of expression and assembly’ and that the Attorney-General had previously advised that consideration of whether the approach taken under regulation 11 with respect to public assemblies remains appropriate would be undertaken in the development of replacement Regulations (as the current Regulations are due to sunset in October 2021 – see pages 17 to 18 for further information).[53] However, the Explanatory Memorandum states that that the Regulations are anticipated to be 'remade with minor changes to their operation' and the Review did not consider this issue in its report.[54] The PJCHR has therefore sought further advice on the following matters from the Attorney-General in order to properly assess the human rights implications of this Bill:

1. whether it is intended that section 11 of the Sydney Harbour Federation Trust Regulations 2001 will be retained as drafted, retained subject to amendments, or removed;
2. how the organisation of, or participation in, a public assembly (including a meeting, demonstration, procession, performance, or sporting event) on Trust land would constitute a threat to public order or public health;
3. what safeguards exist to protect the rights to freedom of expression and assembly, noting that the regulations establish a broadly defined prohibition on a public assembly which would appear to include assemblies which may pose no threat to public order on public lands (including how often has the Trust issued or refused to issue a permit for the carrying out of assemblies, and on what basis); and
4. why other, less rights restrictive alternatives (such as only prohibiting activities contravening regulations which constitute a public hazard or a risk to public health) would not be effective to achieve the objective of this measure.[55]

At the time of writing, the Attorney-General’s response had not been published.

Key issues and provisions

Part 1 – Review of the Trust

Part 1 of the Bill sets out the key amendments to Harbour Trust Act with respect to the operation of the Harbour Trust.

Ongoing Operation of the Harbour Trust

Current situation

The Australian Government’s original intention was for the Harbour Trust to be a transitional body to manage Commonwealth lands in and around the Sydney Harbour region and maximise public access until 2011, when suitable land would be transferred to New South Wales for inclusion in the national parks and reserve system.[56] In 2007, the Parliament passed the Sydney Harbour Federation Trust Amendment Act 2007 which extended the life of the Harbour Trust until 2033.[57]

The Review noted that while the Harbour Trust was established as a transitional body, ‘present arrangements force the Trust to effectively operate as both an ongoing and a transitional body, creating financial and other challenges’.[58]

What the Review recommended

One of the key recommendations arising out of the Review was the Harbour Trust should operate as ongoing entity, with management of the sites to be retained by the Commonwealth Government.[59] Specifically, the Review recommended:

• the Harbour Trust Act should be amended to remove Part 10 and other provisions related to the scheduled repeal of the Act and
• the Harbour Trust’s legislative, financial and operational framework and capabilities should reflect its role as an ongoing entity.[60]

The NSW Government submitted that that the Commonwealth should commence negotiations to allow for the transfer of the sites back to the NSW Government by 2033, as ‘the tier of government most experienced and equipped’ to manage such sites.[61] This would reflect the need for a ‘whole of harbour approach’ and allow for ‘greater opportunities for [the Harbour] Trust’s sites to play a central role in the development of a strong network of heritage and public spaces in and around the Harbour’.[62]

However, the majority of stakeholders who provided submissions were of the view that the sites should not be returned to the NSW Government.[63] The Review noted that stakeholders had raised several concerns about removing the sites from the control of the Commonwealth, including:

• the loss of the current legislative framework provided by the Harbour Trust Act and the protection afforded by the Environment Protection and Biodiversity Conservation Act 1999 (Cth)
• uncertainty about how the sites would be funded and managed
• incompatibility between the objectives of the New South Wales National Parks and Wildlife Service and the Harbour Trust, particularly in relation to preservation of built structures and management of adaptive reuse precincts and
• the potential for large-scale commercial development of the sites.[64]

The Review noted that repealing the provisions in the Harbour Trust Act which foreshadow the return of the sites to the NSW Government would not preclude the sites being managed by another entity in the future.[65]

What the Bill does

Currently, Part 10 of the Harbour Trust Act provides that the Minister must, as soon as practicable after 19 September 2033, specify a day on which the Act is to be repealed, and sets out the procedure for transferring assets and liabilities of the Harbour Trust prior to the Act being repealed. Reflecting this, the Preamble to the Harbour Trust Act states:

The Parliament intends to establish the Sydney Harbour Federation Trust as a transitional body to manage the land and facilitate its return in good order. The Trust will transfer suitable land to New South Wales for inclusion in the national parks and reserves system.

Items 1-2 of the Bill amend the Preamble to remove the wording around the Harbour Trust being a ‘transitional body’ with the land to be transferred back to the NSW Government and instead make clear that the Trust ‘will protect the heritage vales of the land’ through its operation as an ongoing entity. Items 3 and 9 of the Bill implement the recommendation of the Review by repealing Part 10 of Harbour Trust Act and consequential definitions to ensure that the Harbour Trust will continue to operate beyond 2033.

Changes to the Membership of the Harbour Trust

Current situation

Part 3 of Harbour Trust Act sets out the current arrangements with respect to how the Harbour Trust is managed.

Currently, section 10 of Harbour Trust Act provides that the Harbour Trust consists of eight members (of which one is the Chair). In order to be appointed by the Minister, a member must be considered a ‘suitable person’, which is defined as a person with qualifications or experience relevant to one or more of the following fields: environmental and heritage conservation, Indigenous culture, land planning and management, business management, or any other field relevant to the Trust’s functions.[66] Further, one member must be an elected member of an affected Local Council; one member must, in the opinion of the Minister, represent the interests of Aboriginal and Torres Strait Islander peoples; and two members must be appointed on the recommendation of the NSW Government.[67]

What the Review recommended

In considering the Constitution of the Harbour Trust, the Review noted that a recent Australian National Audit Office (ANAO) report into the effectiveness of the Harbour Trust Board had found that ‘the governance and oversight arrangements adopted by the Board were effective’.[68] However, the ANAO Report did identify opportunities for improvement, including allowing for the Board to more actively engage with the Minister and the Department in relation to the skill requirements for future Board members.[69]

This was also identified by some stakeholders as part of the review, who expressed the view that:

… the process for appointing Board members is too politicised and that relevant government experience at an operational level is required to facilitate cooperation between the Commonwealth, the Harbour Trust and New South Wales in fulfilling the Harbour Trust’s objectives.[70]

The Review concluded that ‘membership of the Harbour Trust’s Board should reflect the skills and expertise required for the future’ and made several recommendations aimed at improving the constitution of the Board:

6(a) The Harbour Trust Act should be amended to further specify that the appointment of each member of the Harbour Trust should be based on their expertise in one or more of the following areas: law, finance, asset management, commercial leasing, architecture, public administration, Indigenous engagement, heritage, environment, tourism and marketing.

(b)   When an appointment is made to the Board, an explanation of how these competency requirements have been considered and addressed should be published.

(c)   The Board should maintain a skills matrix and conduct regular reviews of its capacity and performance.

(d)   Representational positions for the New South Wales Government and Local Councils should be retained. These positions should be filled by senior officials with appropriate expertise from the relevant jurisdiction.

(e)   There should continue to be one member of the Harbour Trust who represents the views and interests of Indigenous Australians. This position should be filled in consultation with the Harbour Trust’s Aboriginal and Torres Strait Islander Advisory Group.[71]

What the Bill does

Item 7 of the Bill repeals and replaces existing subsections 12(2), (3) and (3A) to implement recommendation 6(a) of the Review.

Specifically, proposed subsection 12(2) make clear that a member can only be appointed to the Board where the Minister is satisfied they have experience or knowledge in one of the following fields: environment and heritage conservation or heritage interpretation; Indigenous culture; land planning and management; business, financial, property or asset management; tourism or marketing; military service; or law. Unlike the current situation, this is an exhaustive list. The proposed amendments replace the word ‘qualifications’ with ‘knowledge’, whereas the Review specifically focused on the need for members to have ‘expertise’.[72] The Explanatory Memorandum is silent on this change. The proposed list of fields is also slightly different from the list set out in recommendation 6(a) of the Review, with the most notable changes being the inclusion of ‘military service’ and exclusion of architecture, public administration, or environment (though these are arguably capture under land planning and management).

While the proposed amendments do not address recommendations 6(b) and (c) of the Review, in the Government’s response to the Review, the Department has advised it is developing protocols for appointments to the Harbour Trust.[73] These will include drawing on an enhanced skills matrix maintained by the Harbour Trust and regular reviews of capacity and performance, and a process to publicly explain how competency requirements have been considered and addressed after each appointment is made.[74]

Proposed subsection 12(3) no longer leaves it to the Minister’s discretion to decide whether a member is able to represent the interests of Indigenous people but rather requires the Minister to appoint an Aboriginal person or Torres Strait Islander within the meaning of the Aboriginal and Torres Strait Islander Act 2005 (Cth).[75] In the Government’s response to the Review, the Department has advised it is also developing protocols with regards to a process for engaging Indigenous Australians in relation to the appointment of Indigenous people to the Harbour Trust.[76]

Proposed subsection 12(3A) removes the requirement for the Minister to appoint an elected member of an affected council and instead allows the Minister to appoint a member who, in the Minister’s opinion, provides a local government perspective and experience. According to the Explanatory Memorandum, this amendment:

… would allow flexibility for the member with a local government perspective or experience to be a senior official of a council, as specified in Recommendation 6(d), a current or former elected councillor, or a person without current affiliation with a Council.[77]

Recommendation 6(d) actually states that representation positions for Local Councils should be retained and filled by senior officials with appropriate expertise from the relevant jurisdiction.[78] While the Review stated that the ‘local government member of the Harbour Trust should be an official from a Local Council, rather than an elected official, to reduce the risk of politicisation’,[79] proposed subsection 12(3A) allows the Minister to appoint any person who the Minister considers ‘provides a local government perspective and expertise’ (and is eligible for appointment under proposed subsection 12(2)). The Department has advised that it is developing protocols for a process for engaging with relevant local councils on these appointments, which may provide greater clarity around this process.[80]

Items 5 and 6 of the Bill make consequential amendments to the Harbour Trust Act to remove the existing definition of ‘suitable person’ and make clear that when recommending members to the Minister, the NSW Government can only recommend persons who have experience and knowledge in one of fields specified in proposed subsection 12(2).

Contracts requiring approval by the Minister

Current situation

Section 64 of the Harbour Trust Act sets out the current limitations placed on the Trust with respect to entering into contracts. Specifically, paragraph 64(a) provides that the Trust cannot enter into a contract for an amount exceeding $1 million, without the Minister’s approval.

What the Review recommended

As part of a broader consideration of the Harbour Trust’s commercial dealings, the Review considered whether the $1 million threshold for contracts that require the Minister’s approval is still appropriate.[81] The Review noted that while this threshold was originally introduced as a control over large commercial undertakings, it now picks up routine operational business of the Harbour Trust, such as contracts for maintenance and cleaning services.[82] The Review recommended that to ensure that the Harbour Trust is able to work efficiently and with appropriate operational independence, the threshold for Ministerial approval should be lifted to $5 million.[83]

What the Bill does

The Government fully accepted the Review’s recommendation.[84] Item 8 of the Bill repeals and replaces section 64 of the Harbour Trust Act to increase the threshold for Ministerial approval to $5 million and to provide for indexation of the threshold amount. Proposed subsection 64(2) makes clear that where a contract includes the option to extend or renew the contract, the total value of the contract will be calculated as though the contract is extended or renewed. Therefore, even if the original amount of the contract falls under the $5 million threshold, if the potential value of the contract is greater than $5 million it will require Ministerial approval. Proposed subsections 64(3) to (9) provide that from 1 July 2022 the threshold amount will be adjusted in line with changes to the All Groups Consumer Price Index published by the Australian Bureau of Statistics.[85] While this was not recommended by the Review, it is common practice for such thresholds to be updated to reflect changes to inflation.

Changes to leasing arrangements

Current situation

Entering into commercial leasing arrangements is a significant function of the Harbour Trust and such arrangements play ‘an important role in the revitalisation and public enjoyment of Harbour Trust sites’.[86]

Since the commencement of the Harbour Trust Act in 2001, the Harbour Trust has been required to determine the proposed terms and conditions prior to entering into a lease for a period longer than 25 years, which then must be set out in a legislative instrument that is tabled in both Houses of Parliament.[87] Such an instrument is subject to disallowance in either House and if disallowed, is taken to be repealed.[88] The Explanatory Memorandum states that this provision was ‘intended as a control against inappropriate alienation of trust land’.[89]

At the time the final report of the Review was published on 18 June 2020, there were 259 buildings on Harbour Trust sites that are fully or partially refurbished and are used for commercial purposes.[90] The Review noted that over half of the Harbour Trust’s total revenue was derived from commercial and residential rental income (approximately $137.3 million since inception).[91]

What the Review recommended

The Review noted that ‘the tension between protecting parkland and heritage values and pursuing appropriate commercial activity was a strong and consistent theme’ raised by stakeholders as part of the consultation process.[92] While the Review concluded that ‘the Harbour Trust has proven itself adept in allowing only commercial activities that are in keeping with the primary objectives of providing public access and amenity, and conserving heritage and environmental value’, it noted that there have been cases where the community has considered that the Harbour Trust has not achieved the right balance.[93]

The Review also considered whether the current process of requiring the proposed terms and conditions for a lease over 25 years to be subject to disallowance was still fit for purpose.[94] The Review considered the requirement for Parliamentary approval of long-term leases to be unusual and the risk of the instrument being disallowed led to ‘an unattractive and unworkable negotiating process from a commercial perspective’.[95] Some stakeholders advocated for greater flexibility, arguing that the current arrangements discouraged leases longer than 25 years, which are often necessary to achieve a return on capital investment and lead to greater investment.[96]

The Review concluded that the current disallowance requirements ‘are too blunt a tool’ in achieving the objectives of the Harbour Trust of public ownership, access and amenity of the relevant sites.[97] The Review recommended that ‘a more nuanced and effective set of controls should be established’ with respect to commercial leases,[98] namely that:

• the Minister should have the authority to approve leases of between 25 and 35 years on Harbour Trust sites
• leases of longer than 35 years should remain possible but subject to the following controls:
  • the site management plans and/or the commercial leasing policy should identify buildings or areas for which 35-year leases or longer are potentially available
  • the Harbour Trust must publish a statement of reasons outlining why the grant of the lease is consistent with the objects of the Harbour Trust Act
• the Harbour Trust should retain authority to enter into leases of less than 25 years.[99]

While the Review noted the commercial benefits that would arise from allowing the Harbour Trust to enter into leases longer than 35 years, it noted that these benefits needed to be balanced with community concerns and therefore recommended that such leases continue to be subject to Parliamentary disallowance.[100]

What the Bill does

The Government stated that it would pursue amendments to the Harbour Trust Act in response to the Review’s above recommendation.[101]

Item 8 of the Bill repeals section 64A and replaces it with proposed sections 64A, 64B, 64C and 64D. In direct contradiction to the Review’s recommendation that leases of longer than 35 years remain possible, proposed subsection 64A(1) makes clear that the Harbour Trust must not enter into a lease or licence over Trust land for a period that is longer than 35 years.[102]

Currently, the Harbour Trust can enter into such leases provided the terms and conditions of the lease are subject to disallowance. The Explanatory Memorandum is silent as to why this restriction on the Harbour Trust’s ability to enter into leases is to be introduced, particularly given the Review specifically recommended that such a restriction not be introduced and the Exposure Draft of the Bill did not contain such a restriction.[103]

Proposed subsection 64A(2) provides that the Harbour Trust cannot enter into a lease that is longer than 25 years but not longer than 35 years (so between 25 and 35 years) unless the requirements in proposed sections 64B, 64C and 64D are met. In summary these are:

• consultation with the community advisory committee and broader public, leading to a statement of reasons
• preparation and tabling of a proposal in Parliament (which will be disallowable) and
• approval by the Minister.

These are examined below.

Consultation requirements and statements of reasons

Proposed section 64B partly implements the Review’s recommendation that a written statement of reasons be prepared setting out how a proposed lease between 25 and 35 years is consistent with the objectives of the Harbour Trust. Proposed section 64B also requires that the proposed lease be consistent with any plans for the site that have been prepared and approved under Part 5 of the Harbour Trust Act.

Proposed subsections 64B(2) to (5) set out the requirements for the Harbour Trust to consult with community advisory committees and the broader public in preparing the statement of reasons, including how any comments are to be incorporated into the statement. The Explanatory Memorandum makes clear that the Harbour Trust is only required to ‘properly consider comments received through consultation’ and is not required to make any changes to the statement in response to such comments.[104]

Tabling of long-term lease proposal in Parliament

Proposed section 64C requires the Harbour Trust to make, by way of legislative instrument, a proposal with respect to a proposed lease or licence which is then to be tabled in both Houses of Parliament and subject to the disallowance provisions set out in the Legislation Act 2003 (Cth). The instrument must specify the following details:

• the proposed lessee or licensee, and the land the subject of the proposed lease or licence
• the period of the proposed lease or license
• the uses of the land permitted by the proposed lease or license.[105]

The Harbour Trust is also required to prepare an Explanatory Statement to accompany the instrument, which must attach the statement of reasons prepared under proposed section 64B.

Ministerial consent

Proposed section 64D also requires the Harbour Trust to obtain the Minister’s written approval before entering into a lease or licence for a period between 25 and 35 years. In giving such approval the Minister must be satisfied that the proposed lease or licence is consistent with:

• the objectives of the Harbour Trust
• any plans for the site that have been prepared and approved under Part 5 of the Harbour Trust Act and
• the proposal prepared under proposed section 64C that was subsequently tabled in Parliament.

The Minister must also have regard to the written statement of reasons, which the Harbour Trust must provide under proposed subsection 64B(6) for his/her consideration.

The Explanatory Memorandum states that this new process:

… allows the Parliament to scrutinise a long-term lease or license proposal early in the approval process. This makes the process more workable, because the Harbour Trust and a prospective tenant will know whether or not a proposal has been allowed by Parliament before commencing detailed negotiation of terms and the community has an early opportunity to provide comment through the statement of reasons consultations.[106]

While the Explanatory Memorandum does not specifically state the exact sequencing for this process, from the above and the text of the Bill (in particular proposed paragraph 64D(2)(c) and 64C(1)(b) it appears that the Trust must first prepare the written statement of reasons and undertake the relevant consultation requirements, before then tabling the proposed section 64C proposal in Parliament and then, after the disallowance period has expired, seeking the Minister’s approval.

Amendments to the Harbour Trust Regulations

Current situation

Section 73 of the Harbour Trust Act allows the Governor-General to make Regulations with respect to a range of matters relevant to the Act. In particular, subsection 73(2) sets out a non-exhaustive list of matters that the Regulations can prescribe, including regulating the conduct of persons on Harbour Trust land; granting or issuing licences, permissions, permits and authorities in respect of Harbour Trust land; and appointing wardens and rangers.[107]

The Sydney Harbour Federation Trust Regulations 2001 (the Regulations) commenced on 12 October 2001 and is a legislative instrument for the purposes of Legislation Act.[108] Following the commencement of the Legislation Act, the Regulations were scheduled to sunset on 1 October 2019, but the sunset date was changed to 1 October 2021 by a certificate made under section 51 of the Legislation Act.[109] The Government has stated that, upon the Regulations sunsetting, they will be remade with minor changes to their operation.[110]

What the Bill does

Item 10 of the Bill amends section 73 to insert proposed paragraphs 73(2)(oa) to (od). The effect of this amendment is to make clear that the Regulations may make provisions relating to:

• imposing liability for offences against the Regulations, which involve vehicles or vessels, on the owners of said vehicles and vessels
• the evidentiary requirements in relation to prosecutions for offences against the Regulations
• the provision of documents, by the Harbour Trust or another person, to persons alleged to have committed offences against the Regulations and
• recovery, by way of penalty, of reasonable costs of the Harbour Trust on behalf of the Commonwealth, incurred as a result of contravention of an order, direction or other requirement.

Item 11 of the Bill also amends section 73 to insert proposed paragraphs 73(2)(ra) to (rb). The effect of this amendment is to make clear that the Regulations may make provisions relating to the removal, moving of, disposal and retention of objects (including animals) that are on Harbour Trust lands.

The Explanatory Memorandum states that this amendment ‘would ensure support for matters provided in the regulations’.[111] It is somewhat unclear why this amendment is necessary, as the Regulations already include provisions that relate to the matters set out in proposed paragraphs 73(2)(oa) to (od) and 73(2) (ra) to (rb).[112] Subsection 73(2) is also a non-exhaustive list so arguably the Governor-General could already make Regulations with respect to these matters under subsection 73(1). However, listing these matters in subsection 73(2) makes clear the types of matters the Government envisages that the Regulations would cover.

New compliance and enforcement provisions

Current situation

Currently the Regulations provide a framework to enable the Harbour Trust to manage and preserve the various sites, by way of an enforcement and compliance scheme:

• Division 2.1 makes clear that certain prohibited or regulated activities on Harbour Trust Land are offences and sets out the relevant penalties 
• Division 2.2 allows the Harbour Trust to issue licences and permits and makes it an offence to contravene the conditions of such licences and permits
• Division 2.3 sets out offences relating to the parking of vehicles
• Division 3.1 provides for the appointment of rangers
• Division 3.2 sets out the powers of Trust rangers, particularly with regards to removing and disposing of property on Trust land
• Division 3.3 provides for the powers of the Harbour Trust in giving orders and consequences where an order is contravened
• Division 3.4 details the process for issuing infringement notices.

The Regulatory Powers Act

The Regulatory Powers (Standard Provisions) Act 2014 (Cth) (Regulatory Powers Act) commenced on 1 October 2014 and ‘provides for a standard suite of provisions in relation to monitoring and investigation powers, as well as enforcement provisions through the use of civil penalties, infringement notices, enforceable undertakings and injunctions’.[113] The Regulatory Powers Act only has effect where Commonwealth Acts are drafted or amended to trigger its provisions. The Attorney-General’s Department advises that:

Proposals that seek to establish or amend frameworks that provide for regulatory powers should trigger the standard provisions of the Regulatory Powers Act, unless there are compelling policy reasons to the contrary.[114]

What the Bill does

Items 12 and 13 of the Bill activate Part 5 of the Regulatory Powers Act by inserting proposed Part 9A – Compliance and Enforcement into the Harbour Trust Act. Part 5 of the Regulatory Powers Act deals with infringement notices. Proposed Part 9A also includes provisions which allow the Harbour Trust to give orders with regards to persons engaged in promoting, conducting or carrying out an activity on Harbour Trust land.

Specifically, proposed sections 65B to 65E substantially replicate regulations 37–40 of the Regulations which currently set out the powers for the Harbour Trust with respect to orders. The Explanatory Memorandum states that the reason for moving these powers from the Regulations to the Harbour Trust Act is to establish the Harbour Trust Act as a more appropriate head of power with respect to orders.[115] Under proposed section 65D a person will continue to have committed an offence with elements of strict liability where they fail to comply with an order given by the Harbour Trust, which is punishable by up to 10 penalty units (currently $2,220).[116]

Proposed sections 65F to 65H aim to replace the current infringement notice scheme which is set out in Division 3.4 of the Regulations with the framework for issuing infringement notices set out in Part 5 of the Regulatory Powers Act. Proposed section 65F provides that a strict liability offence under the Harbour Trust Act or the Regulations (which continue to set out the majority of offences) is subject to an infringement notice under Part 5 of the Regulatory Powers Act.

Item 14 of the Bill clarifies that, following commencement of these provisions, the Harbour Trust may only give an order under proposed section 65B and that proposed sections 65F, 65G and 65H will apply with respect to infringement notices instead of the Regulations.

Concluding comments

Overall, many of the proposed amendments contained in the Bill are in line with the relevant recommendations made by the Review, particularly the Government’s decision to allow the Commonwealth to retain control over Harbour Trust sites and allow the Parliament a level of oversight with respect to commercial leases.

Appendix 1 – Government Response to Recommendations made by the Review

	Recommendation	Government response
1	The objects of the Harbour Trust set out in the Sydney Harbour Federation Trust Act 2001, which focus on public access and amenity, and the protection, conservation and interpretation of environmental and heritage values, should remain unchanged.	Consistent with the recommendation, the Government is not proposing to change the objects of Harbour Trust Act.
2	The Harbour Trust sites should remain in public hands. Existing protections to achieve this, such as s.24 of the Sydney Harbour Federation Trust Act 2001, should be maintained.	Consistent with the recommendation, the Government is not proposing to change the objects of Harbour Trust Act.
3	Whilst Snapper Island is included in the Harbour Trust’s Comprehensive Plan, any handover of this site or transfer of any other new sites to the Harbour Trust will need to be accompanied with sufficient funding to allow for remediation and ongoing maintenance and management of the site.	The Harbour Trust will consult with the community on Snapper Island, commencing in late 2020. This will inform consideration of a potential transfer of the Island from the Department of Finance to the Harbour Trust.
4	The Harbour Trust sites should remain with the Commonwealth. The transfer of any sites to New South Wales would be premature at this time. The Review considers that collaboration between the two levels of government should be strengthened and welcomes the proposal from New South Wales that a significantly closer relationship between the Commonwealth, the Harbour Trust and the New South Wales Government is needed.	The Government will pursue amendments to the Harbour Trust Act to remove the presumption that sites will be transferred to NSW. Discussions with NSW on options for collaboration opportunities have commenced. Any future collaboration will be done in the context of the Harbour Trust Act and the responsibility of the Harbour Trust for decision-making about Harbour Trust sites.
5	The Harbour Trust should operate as an ongoing entity: 1.    The Sydney Harbour Federation Trust Act 2001 should be amended to remove Part 10 and other provisions related to the scheduled repeal of the Harbour Trust Act. 2.    The Harbour Trust’s legislative, financial and operational framework and capabilities should reflect its role as an ongoing entity.	The Government supports the Harbour Trust operating as an ongoing entity and has commenced the process to amend the Harbour Trust Act. The community will have an opportunity to comment on an exposure draft amendment Bill, prior to introduction into the Parliament in late 2020 or early 2021.
6	Membership of the Harbour Trust’s Board should reflect the skills and expertise required for the future: 1.  The Sydney Harbour Federation Trust Act 2001 should be amended to further specify that the appointment of each member of the Harbour Trust should be based on their expertise in one or more of the following areas: law, finance, asset management, commercial leasing, architecture, public administration, Indigenous engagement, heritage, environment, tourism and marketing. 2.  When an appointment is made to the Board, an explanation of how these competency requirements have been considered and addressed should be published. 3.  The Board should maintain a skills matrix and conduct regular reviews of its capacity and performance. 4.  Representational positions for the New South Wales Government and Local Councils should be retained. These positions should be filled by senior officials with appropriate expertise from the relevant jurisdiction. 5.  There should continue to be one member of the Harbour Trust who represents the views and interests of Indigenous Australians. This position should be filled in consultation with the Harbour Trust’s Aboriginal and Torres Strait Islander Advisory Group.	The Government will pursue amendments to the Harbour Trust Act to further specify the skills and expertise required for appointment to the Harbour Trust. The community will have an opportunity to comment on an exposure draft amendment Bill. The Department is developing protocols for appointments to the Harbour Trust. This will include: drawing on an enhanced skills matrix maintained by the Harbour Trust, and regular reviews of capacity and performance a process for engaging Indigenous Australians in relation to the appointment of Indigenous people to the Harbour Trust a process for engaging with relevant local councils on appointments for a person with a local government perspective and experience a process to publicly explain how competency requirements have been considered and addressed after each appointment is made. The Harbour Trust considered a renewed skills matrix at the September 2020 Trust Meeting. An annual internal review of Trust Members capacity and performance will be undertaken by the Chair.
7	The organisational capabilities and structure of the Harbour Trust management and staff should be updated to reflect the expertise and focus the organisation needs into the future, including by: 1. Establishing a dedicated site manager and staff for complex and work-intensive sites - in particular North Head Sanctuary and Cockatoo Island. 2. Reorienting the structure of the Harbour Trust towards three key streams of activity: place-based management finance, asset management and commercial operations and heritage, tourism and site activation. 3. Refocusing staff capabilities and skills to better match future operational requirements, including place-based planning; strategic planning; stakeholder engagement; asset management; financial management and accounting; environment; heritage; tourism; visitor services; and precinct and site activation.	The Harbour Trust is undertaking an analysis of organisational capabilities to ensure it is well placed to fulfil its role as an ongoing entity. This will be completed by early 2021.
8	Community involvement in the work of the Harbour Trust should be strengthened by: 1.  Greater use of Technical Advisory Committees, to supplement the expertise of the Harbour Trust when dealing with complex tasks or issues. 2.  Reconstituting and refocusing the Community Advisory Committees as consultative forums so that they are more directly involved in priority-setting by the Harbour Trust. This should include the attendance of at least one Harbour Trust Board member at each meeting. 3.  Establishing a dedicated annual budget for community, volunteer and indigenous projects aimed at increasing site visitation, enhancing the visitor experience or improving public access. 4.  More active engagement by the Harbour Trust Board and management with volunteers, community groups and others at a site-by-site level.	The Harbour Trust is developing a new Stakeholder Engagement Strategy and Governance Framework Plan. Reform to engagement processes will be implemented as soon as practicable.
9	Collaboration and partnerships need to be strengthened across strategic, management and operational levels, and across all levels of government, to establish a stronger ‘whole of Harbour’ approach to planning of the Sydney Harbour foreshore. The Commonwealth Government should therefore establish a formal taskforce or partnership with the New South Wales Government that fosters collaboration and joint planning, supported by a Memorandum of Understanding that includes: 1.  The inclusion of Harbour Trust sites in the development of a wider Sydney Harbour vision. 2.  The development of a joint visitor and tourism program of year-round activity that includes financial contributions from the New South Wales Government, recognising that this will provide long term economic benefits for New South Wales. 3.  Opportunities for further enhancing and interpreting the Indigenous values of the sites.	Discussions with NSW on options and collaboration opportunities have commenced. The Harbour Trust will consider opportunities for further enhancing and interpreting the Indigenous values of the sites in conjunction with implementation of recommendation 15.
10	The Harbour Trust should consult appropriately and facilitate a more joined-up approach to the management of contiguous public lands and facilities held by neighbouring Local Councils and explore opportunities for additional collaboration, such as a joint calendar of community events on Harbour Trust sites.	The Stakeholder Engagement Strategy and Governance Framework Plan (refer recommendation 8) will include strategies to improve the Harbour Trust’s engagement and collaboration with Local Councils.
11	The Harbour Trust should strengthen its capability in commercial leasing and consider realigning its Leasing Policy to adopt a separate approach for each site, with additional detail on maintenance requirements, lease renewal and sub-leasing.	The Harbour Trust is developing a new Leasing Policy, building on recent community consultation on a draft. The next iteration of the policy will respond to this feedback, as well as the review and any relevant legislative amendments (see recommendation 13). The community will be consulted again on the proposed new Leasing Policy.
12	The requirement for the Minister to approve contracts of greater than $1 million should be revised to a $5 million threshold.	The Government will pursue amendments to the Harbour Trust Act to implement this recommendation. The community will have an opportunity to comment on an exposure draft amendment Bill.
13	The Minister should have the authority to approve leases of between 25 and 35 years on Harbour Trust sites. Leases of longer than 35 years should remain possible but subject to the following controls: 1.  The site management plans and/or the commercial leasing policy should identify buildings or areas for which 35-year leases or longer are potentially available. 2.  The Harbour Trust must publish a statement of reasons outlining why the grant of the lease is consistent with the objects of the Sydney Harbour Federation Trust Act 2001. Leases of longer than 35 years should continue to be subject to Parliamentary disallowance. The Harbour Trust should retain authority to enter into leases of less than 25 years.	The Government will pursue amendments to the Harbour Trust Act in response to this recommendation. The community will have an opportunity to comment on an exposure draft amendment Bill.
14	The Harbour Trust should establish a partnership with the Environment and Engineering Branch in the Estate and Infrastructure Group of the Department of Defence, to support the interpretation of the Harbour Trust sites in respect of their military history.	The Harbour Trust is working to establish a partnership with the Environment and Engineering Branch in the Estate and Infrastructure Group of the Department of Defence.
15	Indigenous heritage of Harbour Trust sites should be recognised and celebrated through improved signage, storytelling and the provision of information at the sites, particularly Headland Park, North Head Sanctuary and Cockatoo Island.	The Harbour Trust will consult with First Nations groups on key interpretive elements for Harbour Trust sites and develop a strategy/program to address gaps identified through the consultation process.
16	The Harbour Trust should employ a Development Manager to work with its existing volunteer network, engage with Indigenous, military and veterans’ organisations to promote the heritage of the sites, encourage visitation and a greater interest in activating sites, progress relevant projects from the dedicated community fund and encourage relevant sponsorship and philanthropic investment for the Indigenous and other historical activities on the sites.	This is being considered by the Harbour Trust as part of its analysis of organisational capabilities. See response to recommendation 7.
17	The Commonwealth and New South Wales should convene a working group of senior officials to collaboratively identify a shared long-term vision and way forward for North Head Sanctuary.	The Government is providing funding to the Harbour Trust to enable it to consult with NSW and the broader community on a long-term vision and way forward for North Head Sanctuary.
18	The existing Deed of Agreement for the North Head Sanctuary should be amended to include an agreed rehabilitation plan, with particular emphasis on the School of Artillery complex.	The Government will pursue amendments to the Deed of Agreement that are necessary to support the long-term vision and way forward for North Head Sanctuary that is being developed in response to recommendation 17.
19	The amended Deed of Agreement for North Head Sanctuary should: 1.  remove the requirement for New South Wales to approve leasing arrangements that extend beyond 1 January 2032. 2.  clarify long term arrangements for the site – that is, whether the site is to be transferred back to New South Wales, and the preconditions and processes for doing so. 3.  agree on the objectives for the future state of the site, including appropriate site activation. 4.  identify the pathways for achieving the shared objectives, including funding requirements. 5.  be developed with community input.	This recommendation will be considered in the context of work to implement recommendations 17 and 18.
20	A fresh look at Cockatoo Island is required, including: 1.  an immediate injection of funding to address the backlog of critical repairs and maintenance works to ensure at least current levels of public access are retained and significant heritage assets are not damaged beyond repair (note this funding is included in recommendation 21). 2.  the development of a masterplan should be undertaken in consultation with all stakeholders, including the New South Wales Government, together with a refresh of the Comprehensive Plan if necessary. 3.  an audit of buildings and structures on the island to determine heritage value, suitability for future use and required investment, to be conducted by individuals with expertise in heritage architecture, quantity surveying, building evaluation and Indigenous heritage. 4.  appointment of a site manager to supervise the development of the masterplan and audit, identify and address priority works, and develop a site-specific approach for leasing and rehabilitation. 5.  consideration of the role of Cockatoo Island in a broader New South Wales Government vision for Sydney Harbour, and nearby sites such as Goat Island (Me-mel), as part of a wider Harbour tourism experience. 6.  keeping a range of activities on the site to maximise public access and the opportunities for different kinds of visitor experiences. 7.  seeking to lease out the glamping/camping/accommodation facilities to a commercial operator. 8.  a staged approach to rehabilitation over time. 9.  tasking and resourcing the Harbour Trust’s Aboriginal and Torres Strait Islander Advisory Group with developing options for an Indigenous engagement strategy for the island.	The Government is providing funding to the Harbour Trust to enable it to generate a refreshed plan for Cockatoo Island, building on the community engagement performed in 2019, as well as in consultation with the NSW government and other stakeholders. The Government has also provided funding to enable urgent repairs and maintenance to be undertaken on Cockatoo Island and other sites (see recommendation 21).
21	The Government should provide immediate additional funding to the Harbour Trust to supplement the revenue it generates. 1.  This should include urgent funding of $47 million across the forward estimates commencing in financial year 2021 for maintenance and upkeep of the sites, including addressing a backlog of repairs and maintenance. 2.  Immediate one-off funding of $3 million should be provided to the Harbour Trust to enable the development of the masterplan for Cockatoo Island, an asset audit for Cockatoo Island and a rehabilitation plan for North Head Sanctuary, providing a basis for site-specific capital plans. 3.  The Harbour Trust should engage with the New South Wales Government, along with the private sector, to identify opportunities for additional funding for the activation of plans for North Head Sanctuary and Cockatoo Island. 4.  Further funding for major rehabilitation should then be based on the processes contemplated by Recommendations 17–20 and, in particular, site-specific capital plans which set out the heritage significance of each building, works to be undertaken, the cost of those works and options for adaptive reuse.	The Government has made $47 million available to the Trust to enable it to address critical repairs and maintenance over the next four years. Any funding beyond this will be considered in the context of future plans for Cockatoo Island and North Head that are being developed by the Harbour Trust. The Government has made $3 million available to the Harbour Trust to enable it to develop refreshed plans for Cockatoo Island and North Head Sanctuary, in consultation with community and NSW Government. This will support consideration of potential future investments in those sites.

Source: C McNally and E Flaherty, Independent Review of the Sydney Harbour Federation Trust, report prepared for the Department of Agriculture, Water and the Environment (DAWE), DAWE, Canberra, April 2020, pp. IX - XIII and DAWE, Australian Government actions in response to the Sydney Harbour Federation Trust Review Recommendations, September 2020 update, pp. 1‑8.