Scientific Technical Cooperation USA; Science Research Innovation NZ; Technological Innovation Israel
Introduction
3.1
This chapter examines the following treaty actions:
Agreement relating to Scientific and Technical Cooperation between the Government of Australia and the Government of the United States of America;
Agreement relating to Science, Research and Innovation Cooperation between the Government of Australia and the Government of New Zealand; and
Agreement between the Government of Australia and the Government of the State of Israel on Bilateral Cooperation in Technological Innovation and Research and Development.
3.2
The three Agreements were tabled in the Parliament on 8 August 2017. The Agreement with the United States of America (USA) was signed on 29 November 2016, the Agreement with New Zealand on 17 February 2017 and the Agreement with Israel on 23 February 2017.
Background
3.3
According to the National Interest Analysis (NIA) the Agreement with the USA represents a largely unchanged renewal of an earlier agreement, the Agreement with the Government of the United States for Cooperation in Scientific Research and Technological Development ([1968] ATS 22). The Agreement with Israel builds on the 1987 Memorandum of Understanding between the Department of Science of Australia and the Ministry of Science and Development of the State of Israel on Cooperation in the Fields of Science and Technology. The Agreement with New Zealand is intended to further cooperation between Australia and New Zealand, strengthening the existing economic cooperation under the 1983 Australia–New Zealand Closer Economic Relations Trade Agreement.
3.4
The Department of Industry, Innovation and Science (DIIS) told the Committee that the new Agreement with the USA builds on the previous Agreement to re-inforce scientific collaboration between the two countries:
The renewed agreement with the US now includes a reference to scientific and technical innovation and supports the continuation of our formal science and innovation relationship. It provides mechanisms by which government and private sector researchers can continue to exchange scientific data and results, protect intellectual property rights and establish partnerships. It also reiterates our science and technical relationship, which spans over 48 years through several previous agreements.
3.5
The Agreement with New Zealand focuses on promoting the region as an innovation hub and marketing its combined ‘capability to the rest of the world’:
The agreement with New Zealand recognises the significant potential benefits that combining Australian and New Zealand efforts and resources can produce for our region. It supports further alignment of our national economic and strategic interests to achieve a trans-Tasman innovation ecosystem, and is a significant addition to the closer economic relationships framework and is part of the single economic market agenda.
3.6
The Agreement with Israel also builds on the existing relationship. It is designed to take advantage of Israel’s reputation in entrepreneurial innovation and foster commercialisation:
The agreement with Israel will place Australian companies in a position to take advantage of opportunities in Israel’s strengths, including biotechnology and ICT research and development sectors. Israel has a reputation as an exemplar of innovative entrepreneurship and its position in the world’s leading countries for R&D investment, with a vibrant venture capital industry. This agreement builds on Australia’s relationship with Israel, underpinned by a memorandum of understanding on cooperation in the fields of science and technology, signed in 1987, to support joint activities in innovation, aiming for commercialisation in the global market.
Reasons to take the proposed treaty action
3.7
According to the NIA for each Agreement innovation and science are central to Australia’s economic policy in delivering economic growth, productivity and job creation as reflected in Australia’s National Innovation and Science Agenda.
3.8
The DIIS stressed the importance of facilitating commercialisation in today’s global market and the role played by formal legal frameworks:
The three treaty actions proposed with the United States, New Zealand and Israel support Australia’s efforts to continue to have a world-class science, research and innovation system that drives productivity. Strengths in translating publicly funded research into commercial outcomes and business entrepreneurship, among other reasons, make these countries attractive partners for us. These kinds of agreements can help to create formal frameworks for collaboration, raise the level of engagement on science and innovation activities and address impediments to collaboration.
The Agreements
3.9
The three Agreements contain similar obligations.
Obligations
USA
Table 3.1: USA Obligations
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Cooperation
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Article II obliges the Parties to strengthen their overall science and technology relationship and to conduct that relationship on the basis of a number of principles, including shared responsibilities and mutual contributions and benefits, comparable access to programs and facilities and exchange of information, effective intellectual property protection, and cooperation in the promotion of research and development results.
Article IV obliges the Parties to support cooperative science and technology activities for peaceful purposes, encourage the timely application of research results for economic, social and industrial benefits, and encourage researchers and organisations from all sectors to participate in cooperative activities.
Article III obliges the parties to each designate an Executive Agent to coordinate and facilitate cooperative activities under the proposed Agreement.
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Confidentiality of information
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Annex I obliges the Parties to protect business-confidential information created under the proposed Agreement, in accordance with their domestic laws.
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Personnel and equipment
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Article IX obliges the Parties to facilitate the entry into and exit from their territory of personnel, material and equipment of the other Party engaged on cooperative activities under the proposed Agreement.
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Intellectual property
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Article VI and Annex I oblige the Parties to ensure the adequate and effective protection of any intellectual property introduced into, or created in the course of, a cooperative activity under the proposed Agreement.
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Security obligations
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Article VII requires that reciprocal security obligations related to cooperative activities under the proposed Agreement be observed in accordance with Annex II.
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Source: NIA (USA)
New Zealand
Table 3.2: New Zealand Obligations
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Cooperation
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Article 3 obliges the Parties to strengthen and conduct their science, research and innovation relationship on the basis of a number of principles, including shared responsibilities and mutual benefits, mutually beneficial access to programmes and facilities and exchange of information, and cooperation in promoting science, research and innovation.
Article 5 obliges the Parties to undertake and support mutually beneficial cooperative activities, and encourage participation in cooperative activities.
Article 4 obliges that Parties to each designate an Executive Agent to oversee progress on cooperative activities and the work programme under the Agreement.
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Sharing of information
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Article 8 requires that non-proprietary information arising from cooperative activities under the Agreement be made available to the world’s scientific community unless otherwise jointly decided.
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Intellectual property
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Article 9 provides that the protection and ownership of intellectual property rights will be the responsibility of, and jointly decided by, the affected participants.
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Personnel and equipment
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Article 11 obliges the Parties to facilitate the entry to and exit from their territory of personnel, material and equipment of the other Party engaged on cooperative activities under the Agreement.
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Dispute resolution
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Article 13 obliges the Parties to settle any disputes between them arising out of the interpretation or implementation of the Agreement amicably through consultation or negotiation.
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Source: NIA (NZ)
Israel
Table 3.3: Israel Obligations
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Cooperation
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Article IV obliges the Parties to encourage and support cooperative activities in innovation between entities from Australia and Israel.
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Sharing of information
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Article VI obliges the Parties to endeavour to facilitate the sharing of scientific and technological information of a non-proprietary nature derived from cooperative activities under the Agreement, to third parties, in accordance with the normal policies and procedures of the entities.
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Non-disclosure of information
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Article V obliges the Parties not to transmit confidential information received from the other to any third party, without written approval, subject to their domestic laws.
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Protection of legal and commercial interests
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Article VI provides that entities participating in cooperative activities under the Agreement are solely responsible for taking necessary steps to protect their own legal and commercial interests, including intellectual property rights.
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Settlement of disputes
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Article VII obliges Parties to settle any disputes between them arising out of the interpretation or implementation of the Agreement amicably through consultation or negotiation.
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Source: NIA (Israel)
Entry into force
Implementation
3.10
According to the NIA for each of the three Agreements, no new domestic legislation or amendment to existing legislation is required to implement any of the Agreements.
Costs
3.11
According to the NIA for each of the Agreements, Australia is not committed to any financial outlays. Activities are subject to the availability of funds and each Party will bear the costs of discharging their own responsibilities.
Issues
Treatment of confidential information
3.12
Drawing on its experience with previous treaty actions, the Committee expressed concern over provisions for confidentiality in the three Agreements. Information created or exchanged under the treaty is to be dealt with under the domestic laws of each country. The Committee asked how confidentiality was interpreted in each of the respective countries.
3.13
The Department pointed out that only the USA and Israel Agreements specifically refer to the treatment of ‘confidential information’. DIIS stressed that the term is used in these two Agreements ‘to refer to commercially sensitive information, not security classified information’. The Department is of the opinion that the domestic laws in all three countries will treat ‘confidential information’ similarly:
The department’s view is that ‘confidential information’ generated from international science, research and innovation collaboration between governments, institutions and individuals, is not expected to attract significantly different treatment through respective domestic laws of New Zealand, Israel or the United States.
3.14
DIIS also explained that the treatment of confidential information in these agreements ‘relates to the handling of said information by the respective governments’, not the cooperative participating research or industry partners, thus reducing the risk of mishandling:
In the case of these agreements, the department’s view is that the amount of confidential information generated and handled by the governments is expected to be minimal with the risk of inappropriate handling by partner governments likely to be low, given the importance of the broader bilateral relationships Australia has with each of these three partners.
3.15
DIIS told the Committee that it was unaware of any issues with regard to the treatment of confidentiality and the domestic laws of New Zealand, Israel or the USA and reminded the Committee that all three countries are parties to the Agreement on Trade-related Aspects of Intellectually Property Rights (TRIPPS).
Effectiveness of Landing Pads
3.16
The Committee noted the establishment of Landing Pads in a range of countries as a means to facilitate entry into new markets for Australian innovation entrepreneurs. The Committee asked if there was evidence of the success of the Landing Pad set up in Israel in 2016.
3.17
The Landing Pads provide either a ninety day residency in a co-work space or a Bootcamp program aimed at introducing participants to investors, mentor networks and strategic partnership opportunities. Austrade informed the Committee that, since the Tel Aviv Landing Pad became operational in May 2016 it has hosted 28 participants in intensive Bootcamp programs and 4 participants in the ninety day residency program. Austrade is expecting an additional 27 participants in the Bootcamp program for the 2017–18 financial year.
3.18
Austrade provided evidence that participants have found the programs beneficial with 85 per cent of respondents to a survey indicating ‘that the Landing Pads program provided a big or very big advantage to their business’. One hundred per cent of the respondents ‘expect to achieve commercial outcomes within 12 months of completing the program in Tel Aviv’.
Access to grants and funding
3.19
The Committee asked for clarification regarding the availability and accessibility of grants and tax incentives mentioned in the NIA (Israel) which states that:
Competitive grants and tax incentives are the two main policy instruments for governments to support business research and development. With government incentives and the availability of highly trained human capital, Israel has become an attractive location for the research and development centres of leading multinationals.
3.20
Austrade explained that two grants have been, or are being, developed with the Israeli Government and the Israeli Innovation Authority R&D collaboration agreements:
1
Victoria: Israel Science and Technology Research and Development Fund (VISTECH): The grant provides up to $250 000 to support collaborative R&D projects by Victorian and Israeli organisations. (Status: signed and running); and
2
NSW: NSW–Israel Research and Development (R&D) Program. The NSW–Israel R&D agreement will allow companies from NSW and Israel to collaborate with one another to conduct joint research and development projects. Israeli companies will be able to collaborate with NSW companies to co-develop and commercialize innovate products with financial support from both governments of up to $250 000. (Status: to be signed).
Priorities under the New Zealand Agreement
3.21
The NIA (NZ) states that the Agreement with New Zealand will provide opportunities for the two countries to collaborate on Australian priority areas of interest under the ‘Innovative New Zealand’ initiative. The Committee sought clarification of Australia’s priorities under this initiative.
3.22
DIIS listed research infrastructure, aligning standards with the National Measurement Institute and IP arrangements, agriculture and health as priorities for Australia. The DIIS also re-iterated the importance of marketing the region to the world:
So you could have, over time, the opportunity for both business and government to take a delegation of science and innovation individuals to a third area in the world—maybe the US, Europe or Israel, for example. There are lots of opportunities where we can see us marketing our capability jointly.
Resourcing of the Executive Agent
3.23
All three Agreements require an Executive Agent to oversee progress on cooperative activities and the work program for the Agreement. DIIS explained that it is the Executive Agent for all three Agreements and the Committee questioned whether it was sufficiently resourced to take on the task.
3.24
DIIS will absorb the oversight of these three Agreements into its current departmental structure with some reallocation of resources but without any additional resourcing. However, the Department emphasised that their role is an administrative one and that agencies and institutions, both government and non-government, are responsible for driving many of the activities:
A very good example is that CSIRO might be one counterpart on our side that would engage with an equivalent counterpart of, say, New Zealand or the other countries to drive a particular collaborative or cooperative activity. So we leave it, in some cases, to the doers of the science or to doers of the collaboration to actually get on and do that. They might do that out of their own resourcing or they might seek additional resourcing over time.
Committee comment
3.25
In the current world where innovation and technology are driving productivity, the Committee sees benefit in the negotiation and implementation of these types of agreements. These agreements provide a formal legal framework through which the Australian government can encourage commercialisation for Australian innovation entrepreneurs.
3.26
The Committee notes the promising results achieved through the establishment by Australia of Landing Pads across the globe to introduce and support Australian innovation entrepreneurs’ entry to new marketing opportunities.
3.27
The Committee recommends that binding treaty action be taken for all three Agreements.
3.28
The Committee supports the Agreement relating to Scientific and Technical Cooperation between the Government of Australia and the Government of the United States of America and recommends that binding treaty action be taken.
3.29
The Committee supports the Agreement relating to Science, Research and Innovation Cooperation between the Government of Australia and the Government of New Zealand and recommends that binding treaty action be taken.
3.30
The Committee supports the Agreement between the Government of Australia and the Government of the State of Israel on Bilateral Cooperation in Technological Innovation and Research and Development and recommends that binding treaty action be taken.
The Hon Stuart Robert MP
Chair
4 October 2017