Scrutiny of Bills Twentieth Report of 1999


Scrutiny of Bills Twentieth Report of 1999

8 December 1999

ISSN 0729-6258

MEMBERS OF THE COMMITTEE

Senator B Cooney (Chairman)
Senator W Crane (Deputy Chairman)
Senator T Crossin
Senator J Ferris
Senator B Mason
Senator A Murray

TERMS OF REFERENCE

Extract from Standing Order 24

(1)

    (a) At the commencement of each Parliament, a Standing Committee for the Scrutiny of Bills shall be appointed to report, in respect of the clauses of bills introduced into the Senate, and in respect of Acts of the Parliament, whether such bills or Acts, by express words or otherwise:

      (i) trespass unduly on personal rights and liberties;

      (ii) make rights, liberties or obligations unduly dependent upon insufficiently defined administrative powers;

      (iii) make rights, liberties or obligations unduly dependent upon non-reviewable decisions;

      (iv) inappropriately delegate legislative powers; or

      (v) insufficiently subject the exercise of legislative power to parliamentary scrutiny.

    (b) The Committee, for the purpose of reporting upon the clauses of a bill when the bill has been introduced into the Senate, may consider any proposed law or other document or information available to it, notwithstanding that such proposed law, document or information has not been presented to the Senate.

SENATE STANDING COMMITTEE FOR THE SCRUTINY OF BILLS

TWENTIETH REPORT OF 1999

The Committee presents its Twentieth Report of 1999 to the Senate.

The Committee draws the attention of the Senate to clauses of the following which contain provisions that the Committee considers may fall within principles 1(a)(i) to 1(a)(v) of Standing Order 24:

Health Insurance Amendment (Professional Services Review) Act 1999

Tradex Scheme Bill 1999 [No. 2]

Health Insurance Amendment (Professional Services Review) Act 1999

Introduction

The Committee dealt with the bill for this Act in Alert Digest No. 9 of 1999, in which it made various comments. The Minister for Health and Aged Care responded to those comments in a letter dated 29 June 1999.

In its Eleventh Report of 1999, the Committee sought further comments in relation to proposed new section 106ZPQ. The Minister for Health and Aged Care has responded in a letter dated 29 November 1999. A copy of the letter, together with a copy of a letter the Minister has written to the Director of Professional Services Review, are attached to this report. An extract from the Alert Digest and relevant parts of the Minister's response are discussed below.

Extract from Eleventh Report of 1999

This bill was introduced into the House of Representatives on 2 June 1999 by the Minister for Health and Aged Care. [Portfolio responsibility: Health and Aged Care]

The bill proposes to amend the Health Insurance Act 1973 to implement changes to the Professional Services Review (PSR) Scheme as a result of a review of the Scheme. The PSR Scheme provides for a system of peer review to determine whether a practitioner has inappropriately rendered or initiated services which attract a Medicare benefit, or has inappropriately prescribed under the Pharmaceutical Benefits Scheme, and to apply sanctions to those who practise inappropriately.

Abrogating the right to silence and patient privacy

Proposed new section 106ZPQ

Among other things, this bill proposes to insert a new section 106ZPQ in the Health Insurance Act 1973. This provision states that a person must produce documents for inspection even though those documents may tend to incriminate that person. The Explanatory Memorandum states that this section “mirrors subsection 105A(6) of the current Act”.

Under proposed section 89B and 105A, the documents to be produced may include clinical or practice records of services rendered not only by the person under review, but also by practitioners employed by that person, or by practitioners employed by a body corporate of which the person under review is an officer. These documents must be produced to a Committee member or his or her nominee (mirroring the existing legislation) and also to the Director or his or her nominee.

Proposed new section 106ZPQ goes on to limit the use that may be made of any documents or information produced. Under proposed subsection 106ZPQ(2) such documents or information are not admissible against the person producing them in civil or criminal proceedings (other than proceedings for providing false or misleading information, or proceedings before a Committee or the Determining Authority).

The Committee notes that proposed new section 106ZPQ attempts to strike a balance between the need to obtain information and the need to protect rights. However, some aspects of its operation remain unclear. Therefore, the Committee seeks the Minister's advice on the following matters:

  • how any incriminating documents or information might be used against a person under investigation in proceedings before a Committee or Determining Authority;
  • whether “a person” nominated by a Committee member or the Director to receive confidential documents will be required to hold any particular position or possess any special qualifications;
  • in requiring the production of patient records, how the bill proposes to protect the doctor/patient relationship, which is founded on confidence and is necessary for appropriate treatment; and
  • in requiring the production of patient records, how the bill proposes to protect the privacy of patients.

Pending the Minister's advice, the Committee draws Senators' attention to the provision, as it may be considered to trespass unduly on personal rights and liberties, in breach of principle 1(a)(i) of the Committee's terms of reference.

Relevant extract from the response from the Minister dated 29 June 1999

I note the preliminary observation in the Committee's Alert Digest 9/99 that the proposed new section 106ZPQ of the Bill may 'be considered to trespass unduly on personal rights and liberties, in breach of principle 1(a)(i) of the Committee's terms of reference'.

I believe the amendments contained in the Bill in no way breach these principles. The Committee has sought advice on four matters.

How any incriminating documents or information might be used against a person under investigation in proceedings before a Committee or Determining Authority

The new section 106ZPQ of the Bill makes explicit that any documents or information obtained during a PSR process are not admissible in evidence against the person under review in either criminal or civil proceedings, other than criminal proceedings for an offence against section 106ZPP, or any civil proceedings before a Committee or Determining Authority.

The insertion of a new section 106ZPQ is consistent with provisions which already existed in the Health Insurance Act 1973 (the Act), specifically subsections 106E(3) and (4) which relate to the use of evidence given by the person under review during the Committee hearing. It does not infringe to any greater degree on the personal rights and liberties than currently provided in the Act under the PSR Scheme.

It needs to be highlighted that the PSR process involves an inquiry into the professional conduct of a practitioner by a committee of peers. It is not concerned with possible criminal conduct as an objective.

In determining whether a practitioner's professional conduct was inappropriate, a committee must have regard to all relevant matters. Any documents or information furnished as part of the investigation by the Director, or during the Committee proceeding, may well be relevant matters. However, there are a range of other considerations including data from the Health Insurance Commission, the evidence given during the Committee hearing, and any submissions received from the person under review. It is unlikely that documents provided by the person under review would prove inappropriate practice by themselves.

  • Whether "a person" nominated by a Committee member or the Director to receive confidential documents will be required to hold any particular position or possess any special qualifications;
  • In requiring the production of patient records, how the bill proposes to protect the doctor/patient relationship, which is founded on confidence and is necessary for appropriate treatment; and
  • In requiring the production of patient records, how the bill proposes to protect the privacy of patients.

Subsection 83(1) of the current Act requires that the Director of PSR must be a medical practitioner. The Director may engage staff to assist in the performance of his or her duties. The existing secrecy provisions in section 130 of the Act, and the relevant non-disclosure provisions in the Crimes Act 1903 apply to the Director, and any staff he or she engages (including committee members). Section 106ZR of the Act requires the non-disclosure of Committee deliberations. Subsection 95(4) of the Act specifies that a PSR committee must comprise practitioners who belong to the profession in which the practitioner was practising when he or she rendered or initiated the referred services. This means, if the person under review is a medical practitioner, then the committee of peers will also be medical practitioners. Subsection 98(3) of the Act currently provides for the proceedings of the Committee to be held in private.

In addition to the non-disclosure provisions in the Acts referred to above, the major participants in the peer review process are medical practitioners who are acutely aware of the need for confidentiality and protecting the doctor/patient relationship.

I hope this has clarified the intended operation of the new section 106ZPQ and addressed the concerns of the Committee.

The Committee thanks the Minister for this response which addresses most of its concerns.

The Committee notes that, under proposed paragraphs 89B(2)(c) and 105A(2)(c), documents must be produced to “a person” nominated by the Director or a Committee member. While members of staff are clearly within this definition, it seems that it may extend more widely, to include any person at all. It is in this context that the Committee sought advice on whether the definition ought be limited to the holders of particular positions, or nominees who possess special qualifications. The Committee would, therefore, appreciate the Minister's further advice on whether the class of people covered by this definition is too wide.

Relevant extract from the further response from the Minister dated 29 November 1999

I understand that the Standing Committee is concerned that the class of people who could be nominated by the Director or a PSR Committee member may be too wide and could extend beyond members of staff of the PSR to include any person at all.

The Standing Committee has sought further advice on “whether the class of people covered by this definition is too wide”. I am advised that technically, the Standing Committee is correct, and the Director or a PSR Committee member could nominate any person, regardless of their qualifications. However, in practice I understand that a nominated person will be limited to staff of the PSR (including other Commonwealth officers) and consultants engaged by the Director.

The Health Insurance Act 1973 (the Act) makes explicit provisions for the types of people who may assist the Director in the performance of his or her functions or duties (sections 106ZM, 106ZN, 106ZP, 90), and requires that the Director must arrange for the provision of services to every Committee (section 106ZPL). The Act also provides for the Director to consult with a Panel (Committee) member and any consultant or learned professional body (Section 90). It is these people who can assist the Director or a PSR Committee member discharge his or her statutory duties. In any case, a nominee of the Director or a PSR Committee member would be subject to existing secrecy provisions in section 130 of the Health Insurance Act 1973, and the relevant non-disclosure provisions in the Crimes Act 1914.

To address the concerns of the Standing Committee I have written to the Director of Professional Services Review, and requested that this practical limitation on the class of people who can be nominated under paragraphs 89B(2)(c) and 105A(2)(c) be explicitly reflected in the internal procedures of the PSR agency. A copy of this letter is attached.

I trust this allays any continuing concerns the Standing Committee may have in respect of this matter.

The Committee thanks the Minister for this further response.

Tradex Scheme Bill 1999 [No. 2]

Introduction

The Committee dealt with this bill in Alert Digest No. 17 of 1999, in which it made various comments. The Minister for Industry, Science and Resources has responded to those comments in a letter dated 1 December 1999. A copy of the letter, together with the Department's Chief Executive Instructions No. 1, are attached to this report. An extract from the Alert Digest and relevant parts of the Minister's response are discussed below.

Extract from Alert Digest No. 17 of 1999

This bill was introduced into the House of Representatives on 14 October 1999 by the Parliamentary Secretary to the Minister for Industry, Science and Resources. [Portfolio responsibility: Industry, Science and Resources]

One of a package of four bills to implement the Tradex Scheme, this bill proposes to establish the Tradex Scheme and provide for the administration of the scheme. The objective of the Tradex Scheme is to allow for the importation of goods, without payment of customs duty or other taxes, provided the goods are subsequently exported or incorporated in other goods that are exported. Penalty provisions for a failure to provide information or produce documents are noted on page 22 of this Digest.

Background

While not apparent from the Explanatory Memorandum or the Minister's Second Reading Speech, this bill is apparently identical to a bill of the same name introduced into the House of Representatives on 24 June 1999, and on which the Committee commented in Alert Digest No 10 of 1999. The Minister responded to the Committee's comments in a letter dated 2 August 1999 (copy attached to this Digest).

The earlier Tradex Scheme Bill was not introduced into the Senate, and was subsequently discharged from the House of Representatives Notice Paper on 14 October 1999.

The following discussion in relation to this bill draws on the Committee's previous comments in Alert Digest No 10 of 1999, and the Minister's letter in response.

Appointment of `a person'

Subclause 45(1)

In a similar manner to the earlier Tradex Scheme bill, subclause 45(1) of this bill enables the Secretary, by writing, to “appoint persons to be authorised officers for the purposes of this Act”. The bill makes no reference to any qualifications or attributes which such persons must have as a condition of being authorised, and the Explanatory Memorandum does not elaborate further on this provision.

In commenting on this provision in the earlier bill, the Committee observed that it often drew attention to provisions which delegated power to anyone who fitted the all-embracing description of `a person'. As a general rule, the Committee preferred to see some limit placed either on the powers to be delegated or on the class of potential delegates. Similar considerations applied to the appointment of officers authorised for the purposes of an Act of Parliament. As a general rule, the Committee preferred that potential appointees be required to possess some qualifications or attributes before they were eligible for appointment. The Committee sought the Minister's advice on these matters.

In responding, the Minister agreed that `authorised officers' should possess specific attributes and qualifications, but suggested that this particular bill was not the appropriate place that these be specified. In the case of public service officials who were appointed as authorised officers under the Act, “their qualities or characteristics are set out in the relevant legislation which deals with their employment status”.

In addition, the Minister averred that the provisions as drafted “retain flexibility for this and future Governments to continue to ensure better outcomes in the delivery of Government services”.

The Committee thanks the Minister for this response in relation to the earlier bill, which remains relevant to this provision. Given the Minister's agreement that `authorised officers' should possess specific attributes and qualifications, the question becomes whether this bill is the appropriate place to specify those attributes and qualifications.

While the qualities or characteristics of public servants who are made `authorised officers' under the bill may be set out in the legislation dealing with their employment status, that legislation does not apply to non-public servants who may be authorised under the bill. In addition, that legislation deals only with the attributes and qualifications expected of public servants generally, and not with the attributes and qualifications expected of those officials who may be appointed to undertake specific functions under a specific bill.

There seems to be a continuing trend toward authorising `persons' to exercise powers and functions under specific legislation. Such provisions are usually included in the interests of administrative flexibility. However, the powers exercisable by these authorised persons are often wide in scope, and it is implicitly recognised that such persons will need specialised skills or training before exercising those powers. A bill which provides for appointments of such width should similarly make some explicit reference to these skills, attributes or qualifications.

The Committee, therefore, continues to draw Senators' attention to this provision, as it may be considered to make rights, liberties or obligations unduly dependent upon insufficiently defined administrative powers, in breach of principle 1(a)(ii) of the Committee's terms of reference.

Excessively wide delegation

Clause 48

In a similar manner to the earlier Tradex Scheme bill, clause 48 of this bill permits the Secretary, by writing, to “delegate to an officer of, or a person employed in, the Department all or any of the Secretary's functions and powers under this Act”.

In commenting on this provision in the earlier bill, the Committee observed that the bill authorised the Secretary to exercise functions and powers that were wide in scope. These included suspending a tradex order, causing infringement notices to be served, reconsidering various decisions made under the legislation, extending certain time periods and providing certificates which had evidentiary force.

Given the scope and variety of these powers, the Committee sought the Minister's advice on why some limit should not be placed on potential delegates – for example, by limiting the class of potential delegates to officers in the Senior Executive Service.

In responding, the Minister acknowledged that, while no limits were placed on the power to delegate, “it is expected that the Secretary would, in the interests of good administration, exercise due diligence and care in determining that only officers who occupy sufficiently senior positions in the Department would exercise those functions and powers as his delegates”.

The Committee thanks the Minister for this response in relation to the earlier bill, which remains relevant to this provision, and notes his expectation that the Secretary's functions and powers will be delegated only to officers with appropriate seniority, expertise and relevant responsibilities.

However, given the apparent width of the functions and powers that are available for delegation, this issue should be more than simply a matter of reasonable expectation – it should be addressed in the provisions of the bill. It is appropriate that the bill itself or a related publicly available document restrict the class of potential delegates to officers of relevant seniority and expertise. The Committee, therefore, seeks the Minister's further advice as to why the appropriate delegation of the Secretary's functions and powers should be a matter of “reasonable expectation” with no legislative effect.

Pending the Minister's further advice, the Committee continues to draw Senators' attention to this provision, as it may be considered to make rights, liberties or obligations unduly dependent upon insufficiently defined administrative powers, in breach of principle 1(a)(ii) of the Committee's terms of reference.

Relevant extract from the response from the Minister

I note the Committee's concerns in relation to subclause 45(1) and clause 48 of the Bill and, in addition to my letter of 2 August 1999, I provide the following response.

Both subclause 45(1) and clause 48 of the Bill provide the Secretary of the Department with powers to appoint authorised officers and delegate powers and functions under the Bill. The Committee has also indicated its preference that the Bill itself or a related publicly available document prescribe the qualifications or attributes a person must possess to be eligible for appointment as an authorised officer or delegate.

As a matter of good Government practice and administration, the Secretary has introduced formal instructions relating to the appointment of authorised officers and delegates. These instructions are contained in the Department's Chief Executive Instructions No.1 (“the CEI”). For your information, I attach a copy of the CEI. In addition, the CEI is publicly available via the Department's website at

Specifically, in relation to the delegation of officers, paragraph 1.4 of section 2 of the CEI requires the delegator to:

… ensure that the delegation(s) of powers or functions are appropriate in terms of the level and position of the delegate(s) within the organisation, and that the directions or conditions that might apply to the exercising of the delegation (including any accountability process) are clear and appropriate. Moreover, the delegator should make sure that the delegate is adequately supervised, appropriately trained and have ready access to the relevant source and reference materials.

In relation to authorisation of officers, paragraph 1.2 of section 3 of the CEI states that:

As with delegations, there is an onus on the person giving the authorisation to ensure that the authorised person is appropriately equipped to carry out the particular task or function. This is achieved by having formal Chief Executive Authorisations instruments.

This section applies to both the authorisation of public servants and non-public servants so that only persons appropriately equipped to carry out the particular task or function are so authorised.

Consequently, I believe that there are reasonable and public parameters contained in the CEI to ensure that only properly qualified persons are appointed as authorised officers or delegates under the Bill.

In the context of subclause 45(1) and clause 48, the Secretary himself is the person who is empowered to appoint authorised officers or delegate powers and functions under the Bill.

I trust that the Committee's concerns are adequately addressed by the CEI. The parameters prescribed in the CEI will ensure that powers under subclause 45(1) and clause 48 are exercised responsibly by the Secretary of my Department.

The Committee thanks the Minister for this response which sets out the parameters imposed in relation to the appointment of authorised officers and delegates. These parameters reduce the apparent width of the class of potential appointees and delegates, which prompted the Committee's initial concern.

However, it would seem that the Chief Executive could, if so minded, simply change these Instructions at will, with no real oversight or review of any such change. Accordingly, the Committee leaves the issue of the appropriateness of imposing limits on potential delegates or appointees by way of Chief Executive's Instructions for decision by the Senate as a whole.

Barney Cooney
Chairman