Report
Referral
1.1
The Research Agencies Legislation Amendment Bill
2002 (‘the bill’) was introduced into the House of Representatives on 21 March
2002. On 25 June 2002 the Senate adopted the Selection of Bills Committee
recommendation to refer the provisions of the bill to this Committee for report
by 29 August 2002.
1.2
Eight submissions were received, and they are
listed at Appendix 1.
Reasons for referral
1.3
The Selection of Bills Committee Report
contained the following reasons for referring the bill to the Committee:
- Financial reporting requirements possibly too weak and
inappropriate;
- Issues connected with financial management associated with
commercialisation;
- Adequacy or otherwise of financial safeguards;
- Appropriateness of certain commercial ventures undertaken by
these agencies.[1]
Background to the bill
1.4
The Australian Institute of Marine Science
(AIMS) was established by the Australian Institute of Marine Science Act
1972 (the AIMS Act). Its functions are set out in detail in section 9 of
the AIMS Act, but in general are to ‘generate the knowledge needed for the
sustainable use and protection of the marine environment through innovative,
world-class scientific and technological research.’[2]
1.5
The Australian Nuclear Science and
Technology Organisation (ANSTO) was established by the Australian Nuclear
Science and Technology Organisation Act 1987 (The ANSTO Act). Its mission
is ‘to provide expert advice,
nuclear services and nuclear-based products on demand, and to identify, develop
and promote innovative solutions through the application of nuclear-based
research and development’[3]
1.6
AIMS and
ANSTO are currently permitted to undertake commercial activities associated
with the intellectual property generated by their research, but their respective Acts limit the extent of this commercial
activity in two important ways. First, the agencies have specified limits on
the size of contracts they can enter into. For AIMS, ministerial approval is
required for contracts in excess of $100,000[4].
For ANSTO, ministerial approval is required for contracts in excess of $1
million[5].
Second, the Acts have the effect of limiting the commercial activities of AIMS
and ANSTO to matters directly related to their Functions. This means that if
either organisation generates, as a by-product of their research activities,
intellectual property that does not relate directly to marine science or
nuclear technology (respectively), they cannot act to commercialise that
intellectual property. This latter limitation appears to be the primary reason
for the introduction of the Research Agencies Legislation Amendment Bill 2002
(the bill).
1.7
Schedule 1 of the bill addresses the issues
raised above with respect to AIMS, and Schedule 2 does so for ANSTO. In each
case, Part 1 of the Schedule increases the functions and powers of the
organisation to provide for the non-marine or non-nuclear application of
technologies, and Part 2 of the Schedule increases the size of the contracts
AIMS and ANSTO can enter into without Ministerial approval.
1.8
In his second reading speech, the Minister
explained the need for the bill as follows:
“it is imperative that the AIMS and ANSTO acts be amended so
that the growing range of commercial activities of these research agencies may
be fully exploited and in doing so, are fully supported by providing funds and
infrastructure.”[6]
Issues
1.9
None of the submissions provided to the
committee expressed concern about any direct aspects of the bill. While two
submissions raised concerns about Government policy in this area, neither expressed
direct criticism of the bill. In fact, one of these submissions stated that
“in removing impediments now faced by ANSTO and AIMS preventing and limiting
their commercial operations we believe the bill has merit.”[7] None of the submissions
expressed criticism in relation to any of the reasons expressed by the Senate
Selection of Bills Committee for referring this bill to the committee.
1.10
The two submissions which expressed general
policy concerns were apprehensive about the extension of commercial powers
available to AIMS and ANSTO. This was considered likely to result in the
organisations directing their activities towards more commercially lucrative
activities, or were likely to result in the Government reducing the
appropriations to these agencies. While the committee majority notes these
arguments, it regards them as speculative at best. These are not issues which
can properly be dealt with by this inquiry.
1.11
The committee
majority noted that, while the submissions of AIMS and ANSTO addressed the terms
of reference for this inquiry, they fell short of addressing the interest
expressed by members of the committee during a number of inquiries about the
longer term implications of the commercialisation of research. While the
committee majority strongly supports this bill, and sees merit in opening up
further opportunities for collaborative research, it notes that the agencies
have not expounded on the scope and challenges presented by these collaborative
opportunities. The committee considers that AIMS and ANSTO must be aware of the
concerns and debates surrounding the commercial activities of research
institutions such as universities and the CSIRO, and further concerns touching
on the impact of commercial funding in public research institutions. The committee
majority looks to these concerns being allayed. Following the changes to
administrative arrangements since the election of the 40th
Parliament, this committee has some direct oversight over the performance of
research agencies and will be watching to ensure that these agencies take full
and prudent advantage of their new powers. It looks forward to seeing an
unfolding pattern of innovative long-term commercial ventures successfully
managed in the national interest.
Issues raised by the Selection
of Bills Committee
1.12
As noted in paragraph 1.3 above, the Selection
of Bills Committee raised a number of issues as it referred this bill to the
Committee. In the absence of evidence critical of the bill, each of the issues
raised will be briefly addressed below:
Financial reporting requirements
1.13
Both AIMS and ANSTO report to the Government and
Parliament in accordance with the Commonwealth Authorities and Companies Act
1997 (the CAC Act). The CAC Act sets our reporting and accountability
requirements which are relevant to a broad range of agencies. The Committee is
unaware of any specific reasons why financial reporting requirements under the
CAC Act might be regarded as too weak or inappropriate.
Issues connected with financial management
associated with commercialisation
1.14
Evidence before the committee did not raise any
issues regarding the financial management of commercial operations undertaken
by AIMS and ANSTO.
Adequacy or otherwise of financial safeguards
1.15
The financial safeguards relating to these
agencies are principally the CAC Act. In addition, both must seek Ministerial
approval before taking other commercial decisions, such as entering contracts
beyond $1 million (AIMS) or $5 million (ANSTO), or borrowing money (whether
from the Commonwealth or any other body). Finally, both organisations are
subject to audit by the Australian National Audit Office. The Committee
concludes that these financial safeguards are entirely adequate.
Appropriateness of certain commercial ventures
undertaken by these agencies
1.16
The committee is not aware of which commercial
ventures undertaken, or likely to be undertaken, by these agencies might be
controversial. The Committee observes that the most likely controversial
activities probably relate to nuclear activities, but notes that ANSTO is
already able to commercialise its intellectual property for nuclear uses. This
legislation relates to non-nuclear activities. As such, the Committee
has no reason for concern regarding the appropriateness of commercial ventures
undertaken by these agencies.
Recommendation
The Committee recommends that the Senate
pass this bill.
Senator John Tierney
Chair
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