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Introduced into the House of
Representatives on 27 June 2012
Portfolio: Treasury
1.2
The committee considers that this bill is compatible with human rights
as defined in the Human Rights (Parliamentary Scrutiny) Act 2011.
1.3
The committee notes that the bill engages the right to the presumption
of innocence contained in Article 14(2) of the International Covenant on Civil
and Political Rights (ICCPR).
1.4
This bill amends the Commonwealth Inscribed Stock Act 1911 to:
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facilitate trading of beneficial interests in Commonwealth
Government Securities (CGS) on financial markets in Australia that are
accessible to retail investors; and
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make minor amendments to facilitate the Australian Office of
Financial Management’s daily administrative work and remove some redundant
provisions.
1.5
The bill also amends the Corporations Act 2001 to require
financial advisers to provide a prescribed information statement to retail
clients when they give them personal advice about investing in CGS.
Right to the presumption of
innocence (Article 14(2) ICCPR)
1.6
The statement of compatibility with human rights states that this bill
may raise human rights issues because it contains a number of offences where
the burden of proof is reversed and that this may give rise to concerns with
respect to the right to the presumption of innocence.
1.7
The committee notes that new subsection 120AI(1) requires a regulated
person providing personal advice to a retail client and who recommends an
investment in a particular class of Commonwealth Government Securities
depository interest to give the client the information statements relevant to
the product that is being recommended. The explanatory memorandum states that
this requirement has been closely modelled on existing section 1012A of the Corporations
Act 2001 which requires a product disclosure statement to be provided when
personal advice is given recommending a particular product.
1.8
New subsections 1020AI(3) and (4) make it an offence for a regulated
person not to provide the required information statements. New subsection
1020AI(4) states that this is an offence of strict liability. Strict liability
offences are provided for in section 6.1 of the Criminal Code Act 1995.
The effect of an offence being one of strict liability is to remove the need
for the prosecution to prove fault in the defendant, with respect to the
contravention of the requirement, which it would otherwise be incumbent on the
prosecution to do.
1.9
New subsections 1020AI(2) and 1020AI(6) provide for various defences and
exceptions to the offence in relation to which the defendant bears an
evidential burden. Under the Criminal Code Act 1995 a law may impose an
evidential burden on a defendant. This means that the defendant bears the
burden of pointing to evidence that suggests a reasonable possibility that a
matter exists or does not exist. If the defendant discharges an evidential
burden, the prosecution must disprove those matters beyond reasonable doubt.
1.10
Article 14(2) of the ICCPR protects the right of a person charged with a
criminal offence ‘to be presumed innocent until proved guilty according to
law’. The UN Human Rights Committee has provided little guidance on how Article
14 (2) ICCPR should be interpreted in the context of reverse burden and
no-fault offences. However, case law from comparable jurisdictions with
analogous protections (such as the United Kingdom, New Zealand and Canada, as
well as the jurisprudence of the European Court of Human Rights) indicates that
such offences will not necessarily violate the presumption of innocence, so
long as they pursue a legitimate aim and are reasonable, necessary and proportionate
to that aim.
1.11
The statement of compatibility states that the reversal of the burden of
proof is appropriate in these circumstances because these matters are
particularly within the knowledge of the defendant and would be very difficult
for the prosecution to prove otherwise.
1.12
The statement of compatibility and explanatory memorandum also indicate
that the reasons for reversing the burden of proof and for providing for a
strict liability offence in this case have been assessed in the light of guidelines
provided by the Criminal Justice Division of the Attorney-General's Department
and have been found to be consistent with those guidelines.
1.13
The committee considers that reverse burden and no-fault offences which
are drafted in accordance with these principles are likely to be consistent
with the presumption of innocence, in particular as they require consideration
of whether:
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the offence is regulatory (in other words, it is justifiable to
expect individuals who participate in a regulated activity to be deemed to have
accepted certain conditions and to show why they are not at fault for
infringements);
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the burden relates to facts which are within the defendant's own
knowledge or to which they have ready access; and
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the penalty falls at the lower end of the scale.
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