Chapter 4
The proposed Senate resolution
4.1
This chapter discusses the proposed resolution of the Senate contained
in the reference to the committee, put forward by Senators Ludlam, Xenophon and
Fielding, for an independent arbitration process in the Senate, and specific issues
relating to that proposal.
Outline of the proposal
4.2
Mr Harry Evans, former Clerk of the Senate, submitted that:
The proposed order...is intended to operate in conjunction with
the order of the Senate of 13 May 2009.[1]
4.3
As discussed in chapter 2, the order of the Senate of 13 May 2009
requires unresolved claims of public interest immunity made by ministers and
public servants in Senate committee hearings to be referred to the Senate. The
order does not set out a process through which disputed claims are to be
resolved. The proposed resolution attempts to fill that gap.
4.4
The proposed resolution provides that if a minister wishes to claim
public interest immunity with respect to documents that have been ordered by
the Senate, the minister must set out the reasons why it would not be in the
public interest for the documents to be produced.
4.5
If a minister makes such a statement, or a committee reports to the
Senate in accordance with the order of 13 May 2009, and the Senate does not
make a resolution within two sitting days accepting the minister's reasons,
then the matter is automatically referred to arbitration. This is a key
difference between the proposed Senate resolution and the orders operating in
other jurisdictions in Australia. The orders in Victoria, NSW and the ACT all
require that a member of the house request that a matter be referred to
arbitration, whereas the default position under the proposed Senate resolution
is automatic referral.
4.6
Paragraph 3 of the proposed resolution specifies that where the
minister's claim of public interest immunity includes commercial
confidentiality issues, the independent arbitrator will be the Auditor-General.
Where other reasons are given, the Senate must pass a resolution to appoint an
independent arbitrator.
4.7
No timeframe is set out for the completion of the arbitrator's report.
Paragraph 5 of the proposed resolution simply states that the report
should be completed 'as soon as practicable'.
4.8
Paragraph 6 of the proposed resolution sets out that where the
arbitrator finds the reasons for public interest immunity claimed by the
government are not justified, then the documents or information shall be
produced in accordance with the Senate's original order for production of
documents, subject to any subsequent Senate orders.
4.9
During the course of the committee's inquiry, a number of significant
concerns were raised about the way the proposed resolution is likely to
operate. Key amongst them were:
- that the resolution amounts to an improper delegation of the
Senate's power and sets out an inappropriate role for the arbitrator;
-
that the resolution does not allow the arbitrator access to the
documents subject to the immunity claim; and
-
that the role specified for the Auditor-General is incompatible
with the Auditor-General's existing role.
4.10
Each of these issues is discussed in turn below.
The role of the arbitrator
4.11
Two central questions were raised regarding the role of the arbitrator:
the first was whether the arbitrator is legally entitled to perform the role
specified in the resolution, or whether the Senate would be improperly
delegating its powers; and the second, related issue was whether the making political
judgements is an appropriate role for an unelected independent arbitrator to perform.
Improper delegation of Senate power
4.12
Associate Professor Anne Twomey has argued that the role of the
independent arbitrator in NSW, and the role set out for the arbitrator in the
proposed Senate resolution, may be an improper delegation of the powers of the
respective upper houses. In the article attached to her submission, Associate
Professor Twomey explained that:
...there is doubt as to whether a House could, if it so
desired, delegate its powers to a person who is not a member. Certainly the
Parliament as a whole may delegate legislative power to a statutory officer
holder or other non-Member by way of an Act of Parliament. Legislation...may also
permit a parliamentary committee to appoint a person to conduct an inquiry. Further,
a House can ask a person to assess documents for it as has occurred at the
Commonwealth level. It is a different thing altogether, however, for a House to
purport to delegate its powers to a non-Member or non-officer, or for that
person to assert that he or she is exercising the powers of a House in making a
decision. This would be a radical and probably unprecedented step, giving rise
to all sorts of issues concerning parliamentary privilege.[2]
4.13
Although Associate Professor Twomey considers that the NSW Legislative
Council's standing order 52 does not purport to delegate the Council's power in
such a way, she argues that certain comments of one arbitrator–Sir Laurence
Street–indicate that he is asserting that he is acting as a delegate of the
parliament.[3]
4.14
Ms Lovelock, Clerk of the NSW Parliaments, disagreed and suggested that
Associate Professor Twomey was mistaken in her argument that Sir Laurence is
purportedly acting as a delegate of the NSW Legislative Council, and has
misunderstood Sir Laurence's comments in that respect:
Professor Twomey has suggested that the House is somehow
delegating its power and that Sir Laurence sees his position as a delegate. He
uses that word but I do not think he is using the word in that sense that we
have delegated our powers. The House itself is not delegating its power. What
it is saying is that we would like an independent, non-political opinion about
this.[4]
4.15
In simple terms, the question of whether the parliament has delegated
its powers depends on the nature of the arbitrator's recommendation and the
outcomes flowing from it. If the arbitrator is effectively making a decision
for the parliament, then it can be said that the parliament has delegated its
powers. However, if the arbitrator's decision is merely advisory, and the parliament
remains free to act in whatever way it deems appropriate, then there has not
been an effective delegation of the parliament's power.
4.16
Ms Lovelock argued that Sir Laurence's role has not overstepped this
boundary. She pointed out to the committee that the NSW Legislative Council is
in no way bound by the arbiter's recommendations, and that there is also no
political pressure to follow those recommendations. She said:
When the arbiter makes a report that report is not
automatically made public. It is only available to members. It is not until the
arbiter's report is actually tabled in the house that it can be made public.
There has to be a vote in the house before that can happen. Not all of the
arbiter's reports are made public, so there is no political pressure that I can
see other than the usual argument that members may have between themselves, but
they cannot even argue it in the house, because until the arbiter's report is
made public they are not allowed to talk about what is in it.[5]
4.17
However, the role of the arbiter in the proposed Senate resolution
differs significantly from the role of the arbiter in NSW. While in NSW no direct
consequence results from the arbiter's recommendation, the proposed Senate
resolution appears to make the availability of the relevant documents to
Senators contingent on a decision by the arbiter to reject the government's
claim for privilege in respect of the documents.
4.18
Mr Harry Evans, former Clerk of the Senate, explained that it is
necessary for the Senate to delegate its power to an arbitrator in order to
resolve the longstanding issue of public interest immunity claims. He agreed
that:
If the Senate adopted this system it would in effect be giving
away part of its power. By agreeing to accept the decision of an arbitrator it
would be giving away its power ultimately to enforce the production of
documents.[6]
4.19
Mr Evans also explained that, in his view, this delegation of its power ought
not be necessary in order for the legislature to do its job. He said:
Some purists, including myself at times, would say that if
the legislature thinks that it needs information then the legislatures should
prevail. The executive government is, after all, supposed to be accountable and
responsible to the elected legislature.[7]
4.20
However, Mr Evans explained that the delegation of some of the Senate's power
is necessary in order to resolve the issue because:
Naturally, there is a reluctance of senators to go down the
path of imposing some very heavy penalty on government to force it to produce
documents. So what I say is: 'If you're not going to enforce the powers that
you have, if you're always going to shrink from those serious remedies to force
executive government to produce information, then perhaps you ought to
seriously consider the system of arbitration.'[8]
Should an arbitrator be making political
judgments
4.21
A related concern that was also raised by Associate Professor Twomey is
the role of the arbitrator in making what essentially amount to political
judgments. The NSW model specifically requires the independent arbitrator to be
from a legal background, indicating that legal knowledge and skills are
important in the role. However, Associate Professor Twomey has pointed out some
of the inconsistencies with this approach.
4.22
Judges and lawyers are familiar with public interest immunity claims as
they relate to legal trials. As Associate Professor Twomey has written:
When it comes to public interest immunity, courts balance the
public harm from the disclosure of documents against the significance of the
information to the issues at trial.[9]
4.23
However, the issue of public interest immunity is 'a different matter
when parliamentary proceedings, rather than court proceedings, are involved'.[10]
Chief Justice Spigelman, in Egan v Chadwick commented that judges do not
have the experience to balance the public harm that may result from the
disclosure of documents against the importance of the documents for the
legislative accountability functions of the parliament. He expressed the view
that it is therefore inappropriate for the court to perform such a role.[11]
4.24
Associate Professor Twomey has similarly argued that to place an
arbitrator in the position of determining the public interest takes the political
judgment away from those elected to make such judgments. She asks:
How, one wonders, is a retired judge qualified to make the
judgment...that the public interest in the cross-city tunnel is lower than the
public interest in millennium trains?[12]
4.25
Furthermore, Associate Professor Twomey has suggested that the principal
arbiter used in NSW, Sir Laurence Street, has misconstrued his role by asking
and answering the wrong question in the arbitration process. She suggests that
the question the NSW arbitrator is really being asked to answer is whether the
harm that may be caused by disclosure of the document to the public is outweighed
by the benefit to the Legislative Council process that publication of the
document would have. Instead, Associate Professor Twomey suggests that Sir
Laurence Street has been asking whether the general public is interested in the
issue, and has balanced the public harm in disclosure against the public
interest in 'contributing to the common stock of public knowledge and
awareness'.[13]
4.26
Clerk of the NSW Parliaments, Ms Lynn Lovelock, disagreed with Associate
Professor Twomey's view in this respect, stating that:
Sir Laurence is very concerned with the process...I think he
brings a very measured response to what he is doing. Yes, he does go beyond
strict legal interpretation, because I think he sees his role as weighing up
the competing interests between recommending that the privilege be upheld and
recommending against it. The thing is, we should not lose sight of the fact
that the arbiter provides an independent opinion. It is up to the house to
decide whether or not to subsequently make documents public.[14]
4.27
Sir Laurence Street discussed the impossibility of separating politics
from the arbitrator's decision-making process and stated:
It is very hard to divorce the politics from the question of
privilege. This [matter] that I have on the table in front of me at the moment
of course reeks of politics: seeking to discover what particular expenditures
are claimed in, I think, every electorate across the state, one by one. That is
a red-hot political issue. At the same time it is an issue of very considerable
public interest. It is not always easy for those who are involved in the
political process to keep those two separate.[15]
4.28
However, Sir Laurence Street also explained to the committee how his
role as an arbitrator, and the decisions he was charged with making differ from
the decisions courts make. He gave the example of the application of legal
professional privilege and the different considerations he would be charged
with taking into account as a judge compared to those he takes into account as
an arbitrator.[16]
4.29
The committee acknowledges Mr Evans' arguments regarding the need for
the Senate to delegate or give up some of its power in order to reach a
compromise on the 'constantly recurring problem'[17]
of public interest immunity claims. However, the committee is concerned about
the level of power delegated by the proposed resolution and whether it is
justified by the potentially compromised outcome that may be achieved.
4.30
The committee acknowledges that the role of an arbitrator goes beyond a
strict legal analysis of whether public interest immunity may apply to
documents, and is inherently bound up with policy and political considerations of
what is in the 'public interest'. However, the committee ultimately sees that
the power to make decisions about whether disclosure of government documents is
in the public interest, as a role the Senate ought not delegate to an unelected
official. The Senate may benefit from an independent arbitrator's advice on
these issues, however an independent arbitrator's recommendations, no matter
how qualified, should not supplant the decision-making powers of a
democratically elected Senate. The committee sees this issue as a significant
flaw in the proposed resolution.
The arbitrator's access to documents
4.31
A further concern with the proposed Senate resolution that was raised by
a number of witnesses is the fact that the independent arbitrator would not
automatically have access to the documents over which public interest immunity
is claimed. The proposed resolution is silent on the issue of whether or not
the arbitrator would have access to the documents subject to the immunity
claim, and only provides that the minister's statement regarding the
application of public interest immunity or the committee's report under the 13
May 2009 order shall be referred to the arbitrator.[18]
4.32
The clerks of both the Victorian and NSW Legislative Councils expressed
concern about this aspect of the proposed resolution, as did a number of other
witnesses.[19]
4.33
Ms Lovelock, Clerk of the Parliaments, NSW submitted that:
If it is envisaged that the arbitrator report to the Senate
on the basis of the Government's assertions alone, in the Council's experience,
it may be difficult for the arbitrator to reach any meaningful conclusions. In
the Council, the reasons provided in support of privilege claims are often
scant.[20]
4.34
Mr David MacGill, Assistant Secretary from the Department of the Prime
Minister and Cabinet, confirmed that the government had interpreted the draft
resolution to require the government to produce only a statement of reasons to
the proposed arbitrator, and not the documents themselves:
I did not interpret the proposed resolution as requiring
government departments or minister to produce the documents that have been
requested so that a public interest immunity claim could be considered by the
independent arbitrator.[21]
4.35
Ms Lovelock explained her concerns with this aspect of the proposed
resolution when she appeared before the committee:
I cannot see how the arbitrator can make a valid assessment
solely on the basis of the claim that the executive put forward. I think that
it is impossible to do that without seeing what the documents are. I think it
could end up with formulaic responses by the executive that would be impossible
to dispute because they are formulated in such a way that they fall within any
definition of what would be legal professional privilege.[22]
4.36
Similarly, the Clerk of the Legislative Council of Victoria submitted
that on the whole he 'agree[s] with the principle that the onus should be on
the Executive to substantiate' claims of public interest immunity, however:
The Victorian Council's approach has been that without the
documents the role of the arbiter is made difficult, and the House has instead
dealt with the matter by passing further resolutions calling for the documents,
admonishing the Executive and, on two occasions, carrying out the ultimate sanction
of suspending the Leader of the Government in the House.[23]
4.37
However, Mr Harry Evans explained to the committee that:
The resolution is deliberately silent on [the arbitrator's
access to documents] because it may not be necessary for the arbitrator to look
at the documents. That is something that could perhaps be left to the judgment
of the arbitrator. If the arbitrator comes back and says, 'I'm not able to
determine this matter because I really can't tell whether the claim is
justified without seeing the documents' then the Senate could order the
production of the documents to the arbitrator.[24]
4.38
The Chairman of the Accountability Round Table, the Hon Tim Smith QC
commented that in this respect 'the Senate seems to have taken a cautious
incremental approach'.[25]
He added:
If, however, the hopes expressed as to the likely quality of
the reasons are not realized, then, obviously, the Senate could modify the procedure
to include a request for production of the documents in question to the
independent arbitrator when making the initial request.[26]
4.39
Although the committee sees merit in the cautious approach of allowing
the arbitrator to determine, in each case, whether or not they need to examine
the documents themselves, the committee sees certain risks in this approach.
Without a clear statement of the Senate's power to order the executive to
produce documents to the arbitrator from the outset, the executive may not be inclined
to negotiate on that point at a later date.
4.40
Furthermore, while the committee agrees that in certain, albeit rare,
situations the arbitrator may not require access to the documents themselves in
order to determine whether immunity attaches to the documents, in most
situations the arbitrator will require the documents to make such a
determination. Without access to documents in the majority of situations, the
committee sees little benefit in establishing an independent arbitration
process, with all its associated costs and limitations, and therefore considers
that the process could simply be a waste of time and resources.
The proposed role of the Auditor-General
4.41
The proposed Senate model differs from the state and territory models in
the choice of arbitrator. Paragraph 3 of the proposed resolution provides that
where the government's reasons for claiming public interest immunity include a
claim of commercial confidentiality, the Auditor-General will be the
arbitrator in respect of that claim. Paragraph 4 provides that where other
reasons are given for the claim, an arbitrator will be appointed by resolution
of the Senate. This aspect of the proposed resolution generated significant
criticism from witnesses.
4.42
The Auditor-General's current role is to provide parliament with reports
on performance and financial statement audits. While the Auditor-General makes
recommendations, the office does not hold any executive powers, placing
responsibility on agencies to adopt or reject the recommendations.[27]
4.43
Mr Harry Evans, former Clerk of the Senate, submitted that the role for
the Auditor-General in the proposed resolution stems from a role 'already
performed by the Auditor-General in relation to claims of confidentiality in
contracts'.[28]
Mr Evans was referring to the role of the Auditor-General, discussed in chapter
2 of this report, in assessing claims of commercial confidentiality under the
Murray Motion. Accordingly, Mr Evans submitted that '[t]he Australian National
Audit Office has the required expertise to assess claims of commercial
confidentiality'.[29]
4.44
However, in his oral evidence to the committee Mr Evans acknowledged that:
The Senate may...think it is neater to have all claims referred
to the same arbitrator or panel of arbitrators and not to involve the
Auditor-General separately at all.[30]
4.45
Mr Ian McPhee, the Auditor-General, was strongly opposed to performing the
role of independent arbitrator for commercial-in-confidence claims. The Auditor-General
expressed concern that the independence of his audit role would be compromised by
also performing the role of independent arbitrator, as it would, '...in effect,
mean that the Auditor-General would have a decision-making role, that is,
akin to an executive role', which would be contrary to the current independent
operation of the Auditor-General.[31]
4.46
A second point of contention was the matter of expertise. The Auditor-General
argued that neither he nor his staff have the legal expertise to perform the
functions of the independent arbitrator. In its current review of performance
and financial statements, the Australian National Audit Office (ANAO) bases its
assessment of whether the statements meet with professional standards upon the
representation provided by the relevant department and utilising their skills
in finance and accounting. The Auditor-General argued that this does not
converge with the role of independent arbitration whereby the arbiter will be
required to make an independent judgement. The Auditor-General added:
The hesitation I have is that I see this task as relying
heavily on probably legal precedent – there would be court considerations,
court cases et cetera which deal with this. I would need to have legal
expertise, and the question then becomes a judgment of whether, as an auditor, I
am able under the professional requirements to take on a function whereby I am
heavily and possibly unduly reliant on a level of specialist expertise that I
do not have myself.[32]
4.47
Mr Wayne Tunnecliffe, Clerk of the Legislative Council of Victoria agreed
with the Auditor-General's assessment regarding the need for legal expertise and
knowledge-base in order to fulfil the functions of the role of independent
arbiter:
I would...question...why the Auditor-General is better placed
than an independent legal arbiter to determine such matters. The prevailing
knowledge that should be held by an independent arbiter is about the powers of
the House and the principle of public interest immunity, much of which is
derived from an understanding of parliamentary practice and law, and evolving
standards of public interest immunity in the courts.[33]
4.48
In reference to the ANAO's expertise with claims of
commercial-in-confidence, Mr Tunnecliffe added, 'I regard an understanding of
the commercially confidential nature of a document to be relevant, but
secondary'.[34]
4.49
Mr Tunnecliffe was also concerned about the division in the proposed
resolution of commercial-in-confidence claims and other public interest
immunity claims:
Given that I consider the prevailing Parliamentary view to be
that claims of commercial confidentiality enjoy no special status, I see no
benefit for the Senate in differentiating such claims.[35]
4.50
The Commonwealth Ombudsman suggested that a more appropriate arbiter, or
adviser, would be the proposed Information Commissioner.[36] The
Information Commissioner is a new statutory office proposed in the Information
Commissioner Bill 2009. The role proposed for the Information Commissioner includes
determinative powers regarding Freedom of Information (FOI) claims, which would
more readily extend to assessing public interest immunity claims than the
existing roles of the Auditor-General and arguably lawyers and judges. The
Ombudsman submitted that:
The Commissioner would have the independence and expertise
required to examine the Minister's claim and to advise the President.[37]
4.51
The Ombudsman also added that:
Using the Information Commissioner in this restricted role
would also remove any ground for criticising decisions of an arbitrator
appointed by the Senate against claims of political alignment or bias. A
decision of a standing independent officer...is more likely to be perceived as
credible.[38]
4.52
However, the committee notes that the legislation establishing the
Information Commissioner has not yet been considered by the Senate, and if the
legislation is passed it will take time to establish the office.
4.53
Ms Lynn Lovelock, Clerk of the Parliaments, NSW, noted the difference
between the proposed Senate resolution and the current working model in NSW. Ms
Lovelock said that if the proposed Senate model were to be applied in New South
Wales, she would raise concerns about:
...the arbiter's ability to provide timely reports, given the
heavy workload of the Auditor-General, and the deadline of seven days for the
provision of reports imposed by standing order 52.[39]
4.54
In light of the evidence presented, the committee's view is that the
Auditor-General, while having a sound knowledge base of commercial
confidentiality claims, does not have the supporting legal expertise required
to fulfil the role of independent arbitrator. In addition, the committee would
be reluctant to impose a role on the ANAO which the Auditor-General himself is
reluctant to embrace and sees as incompatible with the current independent
functioning of that office.
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