Purpose of the Bill

The main purpose of the Defence Amendment (Safeguarding Australia’s Military Secrets) Bill 2023 (the Bill) is to amend the Defence Act 1903 to prevent former Defence staff members, including Australian Defence Force (ADF) members, from working for and by that means transferring sensitive information to foreign militaries, governments or government entities without authorisation.

Other Australian citizens or permanent residents would also be prevented from providing training in relation to certain export-controlled items or training in military tactics, techniques or procedures to foreign militaries, governments or government entities without authorisation.

Where a person undertakes these activities without authorisation the maximum penalty is 20 years imprisonment.

Background

The Bill is based on recommendations from an internal review of the Department of Defence’s policies and procedures regarding former defence personnel (military, civilian and contractor) disclosing sensitive information to foreign militaries.[1] The details of this review were not made public, apart from the information contained in the explanatory materials to the Bill.[2]

The internal review was initiated following reports in October 2022 the Chinese Government had approached former Australian Defence Force (ADF) pilots to train or advise Chinese military pilots.[3] In November 2022, Defence Minister Richard Marles noted that Defence is supporting investigations into ‘a number of cases’ by the Joint Australian Federal Police (AFP) – Australian Security Intelligence Organisation (ASIO) Counter Foreign Interference Taskforce.[4]

The Bill is said to be modelled on similar measures that are in place in the US and is critical to the Australia-United Kingdom-United States (AUKUS) enhanced security partnership.[5]

The US has several laws that relate to protecting military secrets including, but not limited to:

• Title 22—Arms Export Control Act (AECA) which controls the export and import of defence articles and services (section 38 [2778])
• Title 22—International Traffic in Arms Regulations (ITAR), which lists certain countries where the transfer of US defence items and services are prohibited and
• provisions in Title 18—Crimes and Criminal Procedures such as § 2 on aiding and abetting and § 371 relating to conspiracy.

These laws are relied on by the US Government in its indictment against former US Marine Corps pilot, now Australian citizen, Daniel Duggan who has been in Australian custody since October 2022 over allegations he trained Chinese military pilots in South Africa from 2010 to 2012.[6] The US is seeking to extradite Duggan from Australia to face these charges in the US.[7]

In the UK, the National Security Act 2023, enacted in July 2023 made it an offence to obtain or disclose protected information which includes tactics, techniques and procedures.[8] This followed reports that former Royal Air Force pilots were being enticed by the Chinese Government to train its military pilots.[9] The UK Government issued a security alert in October 2022 warning former military personnel that they were being targeted for recruitment by the Chinese Government and consequently amended existing laws via the passage of the National Security Act 2023.[10] This issue was also flagged by domestic British and US intelligence agencies in July 2022, citing an example where a UK aviation expert was approached online and:

… ostensibly went through a recruitment process, and was offered an attractive employment opportunity. He travelled twice to China where he was wined and dined. He was then asked – and paid – for detailed technical information on military aircraft. The ‘company’ was actually run by Chinese intelligence officers. That’s where we stepped in.[11]

ASIO Director-General Mike Burgess similarly observed in his February 2023 threat assessment:

… third party companies have offered Australians hundreds of thousands of dollars and other significant perks to help authoritarian regimes improve their combat skills.

In some cases, we and our partners have been able to stop the former insiders travelling overseas to provide the training, but in others, legal ambiguities have impeded law enforcement’s ability to intervene.

However, the individuals rationalise their decisions, the bottom line is they are transferring highly sensitive, privileged and classified know-how to foreign governments that do not share our values or respect the rule of law.

These individuals are lackeys, more ‘top tools’ than ‘top guns’. Selling our warfighting skills is no different to selling our secrets – especially when the training and tactics are being transferred to countries that will use them to close capability gaps and could use them against us or our allies at some time in the future.[12]

Concerns raised by the intelligence, security and military sectors have prompted a reassessment of existing legislation. The Department of Defence’s reviews into reforming Defence legislation and the Defence Trade Controls Act 2012, as well as the Attorney-General’s Department’s Review of Secrecy Provisions, are still ongoing, which suggests the issues this Bill is seeking to address are more urgent.

Committee consideration

Parliamentary Joint Committee on Intelligence and Security

On 14 September 2023 the Government referred the Bill to the Parliamentary Joint Committee on Intelligence and Security (PJCIS) for inquiry. A due date for reporting has not been set but the submissions deadline is 16 November 2023. Details of the inquiry are at Review of the Defence Amendment (Safeguarding Australia’s Military Secrets) Bill 2023.

Senate Standing Committee for the Scrutiny of Bills

At the time of writing, the Senate Standing Committee for the Scrutiny of Bills had not considered the Bill.

Policy position of non-government parties/independents

At the time of writing, non-government parties and independents have not commented publicly on the Bill.

Position of major interest groups

At the time of writing, any submissions received by the PJCIS have not been made public and there does not appear to be any relevant commentary from key analysts and stakeholders.

Financial implications

The Explanatory Memorandum states that the Department of Defence will absorb any resourcing associated with the administration aspects of the Bill (p. 2).

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011, 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 states that the Bill engages the following rights:

• the presumption of innocence in Article 14(2) of the International Covenant on Civil and Political Rights (ICCPR)
• the prohibition on torture, or other cruel, inhuman or degrading treatment or punishment in Article 7 of the ICCPR
• the right to privacy and reputation under Article 17 of the ICCPR
• the right to work in Article 6 and Article 4 of the International Covenant on Economic, Social and Cultural Rights and
• the right to a fair hearing in Article 14(1) of the ICCPR.

The Government considers that the Bill is compatible.[13]

Parliamentary Joint Committee on Human Rights

At the time of publication, the Parliamentary Joint Committee on Human Rights (PJCHR) has not reported on this Bill.

Key issues and provisions

Overview of the scheme

The Bill contains one Schedule that would insert proposed Part IXAA into the Defence Act 1903. These amendments aim to regulate certain individuals when working for or providing training to foreign militaries, government bodies or government entities.

Under the new scheme, former defence staff members who fall within the definition of foreign work restricted individuals must not perform work for, or on behalf of, a military organisation, or government body, of a relevant foreign country unless the individual holds a foreign work authorisation for the work or another exception applies (proposed section 115A).

The Minister may grant a foreign work authorisation (proposed section 115C), cancel an authorisation (proposed section 115E), suspend an authorisation (proposed section 115F) or vary an authorisation (proposed sections 115G and 115H). The Minister may delegate these powers (proposed section 115N).

Australian citizens and permanent residents will be restricted from providing training in relation to goods, software or technology listed in Part 1 of the Defence and Strategic Goods List and/or training in relation to military tactics, military techniques or military procedures, unless the individual holds a foreign work authorisation for that training, or another exception applies (proposed section 115B).

Working or training without the relevant foreign work authorisation is a criminal offence carrying a maximum penalty of 20 years imprisonment (proposed sections 115A and 115B). Failing to comply with a condition of a foreign work authorisation is a criminal offence carrying a maximum penalty of 5 years imprisonment (proposed section 115D).

Key definitions

Proposed subsection 114(1) defines a foreign work restricted individual as a person who was, but is not currently, a defence staff member.

Proposed subsection 115(1) allows the Minister to make legislative instruments determining classes of individuals who are not foreign work restricted individuals.

Without limiting the way in which a class may be determined, proposed subsection 115(2) provides that the class may be described by reference to:

• particular kinds of work or
• the time period that has elapsed since particular kinds of work were last performed.

The Minister may not delegate the power to make this type of determination (proposed section 115N).

Proposed subsection 114(2) ensures that former defence staff members who are listed in a Ministerial determination are excluded from the definition of foreign work restricted individual.

Relevant foreign country means every foreign country except a country specifically excluded from the scheme by a Ministerial determination (proposed section 113). So, if the Minister determines a foreign country is not a relevant foreign country, it is not necessary to obtain a foreign work authorisation to work or train there.

Proposed subsection 115(3) allows the Minister to make legislative instruments determining countries which are not relevant foreign countries. The Minister may not delegate the power to make this determination (proposed section 115N). According to the Explanatory Memorandum, in making such a determination the Minister will consult with relevant Ministers, including the Foreign Minister (p. 8).

‘Other individual’ is not specifically defined but means any Australian citizen or permanent resident who is not a work restricted individual (proposed section 115B). It is not limited to Commonwealth officers. This application is broad, however it only applies to a reasonably narrow category of training related to defence and military matters. There are no specific exceptions for particular groups of people. For example, current and former MPs and Senators are not exempted.

Work means any work (including training) whether it is paid or otherwise rewarded or not and whether it is done in a personal or other capacity (proposed section 113).

Training means any training, whether it is:

• paid or rewarded or not
• provided in a personal or other capacity
• regular or irregular training or
• formal or informal instruction (proposed section 113).

Defence contractors and consultants will not be foreign work restricted individuals

The proposed definition of defence staff member does not include Defence’s external workforce, which is made up of consultants, contractors and outsourced service providers.[14] As noted by the Australian Strategic Policy Institute’s The Cost of Defence: ASPI Defence Budget Brief 2022-2023, ‘contractors alone are equal to nearly 50% of Defence’s APS workforce’ (p. 49). As at March 2022 that external workforce was made up of 8,311 contractors, 370 consultants and 26,199 outsourced service providers (p. 50).[15]

The Defence external workforce will be ‘other individuals’ if they are Australian citizens or permanent residents and will therefore be covered by the proposed section 115B offence. However, the outcome is that an APS employee and a contractor working side by side on the same material will have different obligations and different criminal exposure in relation to future engagement with foreign government bodies and military organisations.

Review of decisions

The Bill provides for both internal and external merits review of reviewable decisions made under proposed Part IXAA. In summary a reviewable decision is a decision to grant, refuse, vary, cancel or suspend a foreign work authorisation. A person whose interests are affected by a reviewable decision has 28 days to apply to the Minister for an internal review (proposed subsection 115K(1)).

A merits review goes beyond examining the legality of a decision to ensure the decision is both correct and preferable given the facts on which it was based. It can also examine whether people affected by a decision have been treated fairly.

Proposed section 115K sets out the internal review process and proposed section 115L provides for further external review by the Administrative Appeals Tribunal.

Ministerial determinations

Determinations made under proposed section 115 are legislative instruments within the meaning of section 8 of the Legislation Act 2003. These determinations will not be exempt from disallowance or sunsetting. These determinations are not reviewable decisions (proposed subsection 115K(9)).

Scheduled review of the foreign work authorisation scheme

Proposed section 115P requires the Minister to cause an independent review of the operation of Part IXAA as soon as possible after 5 years from commencement, with the report to be tabled by the Minister in both Houses of Parliament.

Offences

Offence – foreign work restricted individuals working for a foreign military organisation or government body

Proposed subsection 115A(1) makes it an offence for a foreign work restricted individual to work for, or on behalf of, a military organisation or government body of a relevant foreign country. The maximum penalty is 20 years imprisonment.

Exceptions

A person does not commit an offence if:

• they hold a current foreign work authorisation for the work in question (proposed subsection 115A(2))
• the person is performing the work in question under a written agreement to which the Commonwealth is a party (proposed subsection 115A(3))
• the person is performing work ‘solely in the course of, and as part of, the individual’s service in any capacity in or with any armed force’ and the AFP Minister has made a declaration (under paragraph 119.8(1) of the Schedule to the Criminal Code Act 1995 (Criminal Code) that covers the individual and the circumstances of the individual’s service in or with the armed force (proposed subsection 115A(4))[16]
• the person is employed or engaged by the Commonwealth and the work is in the course of, and part of that employment or engagement (proposed subsection 115A(5))
• the work in question is performed solely or primarily for the purpose of providing humanitarian aid (proposed paragraph 115A(6)(a)) or
• the work in question is performed solely or primarily for the purpose of performing official duties for the United Nations (UN), a UN agency or the International Committee of the Red Cross (proposed paragraph 115A(6)(b)).

As is normally the case, a defendant bears the evidential burden of proving that an exception exists (see subsection 13.3(3) of the Criminal Code).

Start day for the offence

Proposed section 115A will apply to a person who performs relevant work after the start day. It is irrelevant when the person ceased to be a defence staff member. The start day is defined as the day after the end of a 3 month period from commencement (Item 2 of the Schedule to the Bill).

The start day is altered for a person who is:

• already performing work on commencement or who starts work after commencement but before the start day and
• within the 3 month period from commencement applies for a foreign work authorisation.

In these circumstances, the start date becomes the day after the Minister provides the person with written notice that they either grant or refuse to grant the request (subitem 2(3) of the Schedule to the Bill).

Offence – other individuals providing training to a foreign military organisation or government body

Proposed subsection 115B(1) makes it an offence for an Australian citizen or permanent resident who is not a foreign work restricted individual to:

• provide training to, or on behalf of, a military organisation or government body of a relevant foreign country and
• the training relates to goods, software or technology listed in Part 1 of the Defence and Strategic Goods List[17] or the training is in relation to military tactics, military techniques or military procedures.

The maximum penalty is 20 years imprisonment.

Exceptions

A person does not commit an offence if:

• they hold a current foreign work authorisation for the training in question (proposed subsection 115B(2))
• the person is providing the training in question under a written agreement to which the Commonwealth is a party (proposed subsection 115B(3))
• the person is providing the training ‘solely in the course of, and as part of, the individual’s service in any capacity in or with any armed force’ and the AFP Minister has made a declaration (under subsection 119.8(1) of the Criminal Code) that covers the individual and the circumstances of individual’s service in or with the armed force (proposed subsection 115B(4))[18]
• the person is employed or engaged by the Commonwealth and the training is provided in the course of, and part of that employment or engagement (proposed subsection 115B(5))
• the work in question is performed solely or primarily for the purpose of providing humanitarian aid (proposed paragraph 115B(6)(a)) or
• the work in question is performed solely or primarily for the purpose of performing official duties for the UN, a UN agency or the International Committee of the Red Cross (proposed paragraph 115B(6)(b)).

As is normally the case, a defendant bears the evidential burden of proving an exception exists (subsection 13.3(3) of the Criminal Code).

Start day for the offence

Proposed section 115B will apply to a person who provides relevant training after the start day. The start day is defined as the day after the end of a 3 month period from commencement (Item 3 of the Schedule to the Bill).

The start day is altered for a person who is:

• already providing training on commencement or who starts providing training after commencement but before the start day and
• within the 3 month period from commencement applies for a foreign work authorisation.

In these circumstances, the start date becomes the day after the Minister provides the person with written notice that they either grant or refuse to grant the request (subitem 3(3) of the Schedule to the Bill).

Differences to existing criminal provisions

Proof of harm to national security

The offence most similar to the offences proposed in the Bill is section 83.3 of the Criminal Code ‑ providing, receiving or participating in military style training involving a foreign government principal. It also carries a maximum penalty of 20 years imprisonment and does not require proof of harm to national security.

However, most of the offences around espionage and secrecy of information which affect defence staff require, as an element of the offence, that the conduct is intended to be, is, or is likely to be harmful to Australia’s security or international relations. See for example, sections 91.1 and 122.2 of the Criminal Code. Alternatively, the absence of harm may be an element of a defence. See for example, subsection 122.5(8) of the Criminal Code.

The offences proposed in the Bill do not require proof of harm to national security. Proposed subsection 115C(8) requires the Minister to refuse to issue a foreign work authorisation if the Minister reasonably believes the work or training to be done would ‘prejudice the security, defence or international relations of Australia’. However, there is no defence or exception for a person whose work or training, while in contravention of the scheme, does not harm national security.

Requirement for consent of Attorney-General to prosecution

The existing offences mentioned above require the consent of the Attorney-General to institute proceedings (sections 83.5, 93.1 and 123.5 of the Criminal Code). The offences proposed in the Bill do not require consent of the Attorney-General for prosecution.

Two exceptions rely on a declaration by the AFP Minister

The exceptions in proposed subsections 115A(4) and 115B(4) rely on declarations made by the AFP Minister under Division 119 of the Criminal Code. That Division deals with foreign incursions and recruitment. Section 119.1 of the Criminal Code creates an offence for incursions into foreign countries with the intention of engaging in hostile activities. Section 119.2 creates an offence of entering into or remaining in a declared area where a listed terrorist organisation is engaging in a hostile activity. Section 119.7 creates an offence of recruiting persons to serve in or with an armed force in a foreign country. Subsections 119.8(1) and (2) of the Criminal Code permit the AFP Minister to declare that:

• section 119.1 or 119.2 of the Criminal Code or
• section 119.7 of the Criminal Code

does not apply to a specified person or class of people in any circumstances, or the AFP Minister may specify the circumstances when those offences will not apply to the specified people.

A declaration made by the AFP Minister under subsection 119.8(1) also provides an exemption to the offence of providing, receiving or participating in military style training involving a foreign government principal (paragraph 83.3(3)(b) of the Criminal Code).

Before making the declaration, the AFP Minister must be satisfied that it is in the interests of the defence or international relations of Australia to permit the specified people to serve in or with:

• a specified armed force in a foreign country or
• a specified armed force in a foreign country in a specified capacity.

The revised explanatory memorandum to the Counter-Terrorism Legislation Amendment (Foreign Fighters) Bill 2014 which introduced Division 119 into the Criminal Code noted:

985. The ability to make declarations under subsection 119.8(1) is important to Australia’s defence and international relations and cooperation. A declaration could be made, for example, to authorise an individual with certain skills to work with the armed forces of one of Australia’s allies in a peace keeping mission at a location that is, or that could become, the subject of a declaration made by the Foreign Affairs Minister under section 119.3 on the grounds that a listed terrorist organisation is engaging in a hostile activity in that area. In such a case, it would be important that the individual engaged in activities approved by the Australian Government was not at risk of contravening the offences of entering a foreign country with the intention of engaging in a hostile activity or entering or remaining in a declared area. (p. 159)

[…]

987. The ability to make declarations under subsection 119.8(2) is also important to Australia’s defence and international relations and cooperation. A declaration could be made, for example, to authorise one of Australia’s allies to recruit or advertise to recruit a person with specialist skills necessary for a proposed peace keeping mission at a location that is, or that could become, the subject of a declaration made by the Foreign Affairs Minister under section 119.3 on the grounds that a listed terrorist organisation is engaging in a hostile activity in that area. In such a case, it would be important that the person who does the recruiting or publishing the advertisement with the approval of the Australian Government was not at risk of contravening one of the recruitment the offences in section 119.7. (pp. 159-160)

Referencing the declaration made by the AFP Minister is perhaps a neat way of ensuring that someone who would not commit an offence against sections 119.1, 119.2 or 119.7 of the Criminal Code will also not attract criminal liability under the proposed offences in the Bill. However, there are some questions as to how this would operate in practice:

• it has to be possible that there will be a disconnect or overlap between the people named by the AFP Minister and those who would otherwise be granted a foreign work authorisation
• it is not legislative best practice to coopt an exemption created for a different purpose and
• when serving in or with a foreign armed force, a person could conceivably circumvent the need to request a foreign work authorisation under proposed section 115C by instead seeking a declaration from the AFP Minister.

The Bill also does not amend existing section 83.3 of the Criminal Code to provide an exemption from the offence for a person who has a relevant foreign work authorisation. It is possible that a person who has a foreign work authorisation could still be in breach of that section. The requirement that the Attorney-General give consent for prosecution would provide some protection.

An alternative approach might be to instead amend the Criminal Code to exempt people from offences against sections 83.3, 119.1, 119.2 and 119.7 of the Criminal Code if they hold a relevant foreign work authorisation issued under proposed section 115C of the Defence Act and delete proposed subsections 115A(4) and 115B(4). This would leave the AFP Minister issuing exemptions to people who are not foreign work restricted individuals, while removing any potential overlap.

Alternate location for offence provisions

No offences currently in the Defence Act carry a penalty higher than 5 years imprisonment. Most serious criminal offences around espionage and secrecy of information which affect Defence staff are in the Criminal Code.

It is a live question whether placing the offence provisions in the Criminal Code would result in a more solid and coherent criminal liability scheme. In particular, the offence in proposed subsection 115B(1) applies to any Australian citizen or permanent resident who is not a foreign work restricted individual. Placing it in the Criminal Code might be a valuable signal to people not connected to Defence that they might breach the criminal law by working for certain foreign organisations.

Geographic application of offences

Proposed subsections 115A(7) and 115B(7) apply section 15.2 of the Criminal Code (extended geographical jurisdiction—category B) to the offences in proposed sections 115A and 115B. In general terms, the proposed offences would apply to conduct:

• wholly or partly occurring within Australia
• wholly or partly occurring in an Australian aircraft or ship
• wholly occurring outside Australia but a result of the conduct occurring within Australia or in an Australian aircraft or ship and
• wholly occurring outside Australia but the person engaging in the conduct is an Australian citizen or permanent resident or a body corporate incorporated by or under a law of the Commonwealth or of a state or territory.

For finer detail of the application of the extended jurisdiction provisions, please refer to section 15.2 of the Criminal Code.