Criminalising ‘bad culture’ is a terrible idea – here’s why

ASIC MEDIA CONFERENCE

Australia’s corporate regulator is considering criminal sanctions for bad corporate culture:

The Australian Securities and Investments Commission’s chairman Greg Medcraft told a Senate Estimates hearing that he wants to be able to charge banks and their directors when company culture has allowed for misconduct by employees.

“The areas we are planning to target are those where poor practices may increase potential for poor conduct and therefore increase the risk to trust and investor and consumer trust and confidence,” he said in his opening address.

Medcraft would do well to reassess his position on this issue given the extent to which his proposal diminishes the rule of law. There are two key problems with the proposal.

First, punishing bad culture is code for holding one person responsible for the actions of another person. Medcraft used an interesting analogy to make his point:

“When an employee breaches the law … and culture is responsible, then not just the employee, not just the fruit, but also the tree, which is the officers and the company, should also be responsible,” Mr Medcraft told the Senate committee.

Applying Medcraft’s analogy outside the corporate world might suggest he is advocating that parents should be held liable for crimes committed by their children. Indeed, the parent-child relationship seems to fit the fruit-and-tree analogy even more closely than the employer-employee relationship does.

Legal liability is individual. It’s evolved that way because individuals are capable of making choices about their own behaviour. The philosophical underpinnings to this approach are clear – if we accept that individuals have free will then they ought to be held to account for their own decisions. Holding an employer liable for the criminal conduct of employees is a radical reconstruction of our common law legal system.

Secondly, defining what constitutes poor culture is a hopelessly subjective exercise. At best an ambiguous definition of bad culture could be drafted that would leave room for interpretation in the hands of lawyers and judges – and grant a degree of discretionary power to ASIC.

Frankly, if ASIC is interested in reining in poor culture there’s no need for it to leave the building. ASIC itself has significant cultural problems, not least the lack of respect this government body shows for basic principles of liberal democracy such as the rule of law.

Rather than giving ASIC more power to wield over our economic engine room, the Commonwealth parliament should be looking at ways in which the regulator can be brought to heel.

Cory Bernardi at the barricades for the rule of law

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Today’s comments from the Liberal Senator for South Australia are spot on:

“As a matter of principle, I think it’s absolutely wrong for us to take away citizenship from an individual whose sole citizenship is Australian,” he said.

“And particularly be able to do it without any reference to a court of law, at the arbitrary whim of the [Immigration] Minister, I think the principle is entirely wrong.

Senator Bernardi said no-one wanted to stop terrorism and extremism more than he did, but he described the proposal as a “step in the wrong direction”.

“The principle that someone with only Australian citizenship can be stripped of that citizenship, without a court of law, by ministerial directive, for an offence, I think is a very dangerous precedent because who’s to say the range of offences won’t be expanded in the future,” he said.

“This is the sort of power creep that I think is very dangerous from any Government.”

Shifting the goal posts on plain packaging

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Earlier this year, I made a submission to the Department of Health’s post-implementation review of the Tobacco Plain Packaging Act 2011. Ostensibly, the objective of the review is to determine the extent to which the regime has met its stated objectives.

Unfortunately, the review seeks to determine the efficacy of the policy not against the objectives as originally conceived, but against a new set of objectives that have been concocted to fit the evidence as it comes to light.

It’s a classic example of goal post shifting.

Siggins Miller, the organisation undertaking the review on behalf of the government, lists the objectives as follows:

The objectives of the tobacco plain packaging measure are to regulate the retail packaging and appearance of tobacco products in order to:

reduce the appeal of tobacco products to consumers;

increase the effectiveness of health warnings on the retail packaging of tobacco products;

reduce the ability of the retail packaging of tobacco products to mislead consumers about the harmful effects of smoking or using tobacco products;

and through the achievement of these objectives, in the long term, as part of a comprehensive range of tobacco control measures, contribute to efforts to improve public health by discouraging people from taking up smoking, or using tobacco products; encouraging people to give up smoking, and to stop using tobacco products; discouraging people who have given up smoking, or who have stopped using tobacco products, from relapsing; and reducing people’s exposure to smoke from tobacco products.

Under the act, however, the objectives are listed as:

(1) The objects of this Act are:

(a) to improve public health by:

(i) discouraging people from taking up smoking, or using tobacco products; and

(ii) encouraging people to give up smoking, and to stop using tobacco products; and

(iii) discouraging people who have given up smoking, or who have stopped using tobacco products, from relapsing; and

(iv) reducing people’s exposure to smoke from tobacco products; and

(b) to give effect to certain obligations that Australia has as a party to the Convention on Tobacco Control.

The ‘objectives’ listed in the post-implementation review are taken from section 3 of the act. But they were never intended to be objectives in and of themselves; they were listed as the means of achieving those objectives.

The point is this – the original objectives for mandatory plain packaging of tobacco products as set down in the legislation have disappeared from this review. Judging the evidence that will be presented during the course of the review against the machinery of the legislation is an utterly useless exercise. It’s like setting up a post-implementation review into the GST and asking whether it achieved the objective of a consumption tax at a rate of 10%.

One thing is clear. The old adage that you don’t set up a review without first knowing the answer is alive and well within the Department of Health. It has successfully set up a post-implementation review that will tell it exactly what it wants to hear – that plain packaging has been a raging success.

But a success at what?

Having your cake and eating it too

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Earlier this month, a Canadian gay couple demanded a refund from a jewellery store that had been helping the couple design rings for their engagement. They did so after discovering that the owners of the store had displayed a sign that promoted the traditional conception of marriage between a man and a woman. The store has agreed to refund the deposit paid by the couple.

It’s interesting to reflect on this situation given the recent string of anti-discrimination cases against businesses that have refused to serve gay customers. The case of the Canadian jewellery store is the same issue in reverse. In this instance there was no refusal of service, there was refusal of purchase. But there is no law to deal with this unambiguous case of religious discrimination; no tribunal to which the business owners can take the customer for refusing to buy their products.

Nor should there be. That would be absurd. And there’s the rub: the absurdity is directly proportionate to the absurdity of allowing customers to take businesses to court over refusal of service. Voluntary economic exchange is a two-way street. Both the buyer and seller are entitled to take any factor they like into account in deciding whether to engage in the exchange, including the political and religious beliefs of the individuals with whom they are seeking to engage in trade.

The Canadian couple who demanded a refund are entitled to do so. But neither the jeweller nor the customer should be able to coerce the other to engage in economic exchange. It really is that simple.

Western Bulldogs president slams WADA

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Peter Gordon might be the president of the Western Bulldogs Football Club but his commentary on the treatment of the Essendon Football Club by rogue agencies the Australian Sports Anti-Doping Authority and the World Anti-Doping Agency is insightful and well worth reading. From the Herald Sun today:

“Any lawyer who values basic common law principles and notions of justice will be as appalled as I am that the ASADA/WADA show continues in this way,” Gordon said.

“If it wasn’t so tragic and impactful on the players it would be a Monty Python sketch.

“Every time they think they are through it, these guys burst into the room and say our chief weapon is fear, ‘surprise’.

“(There is an) abolition of the right to silence, reversal of the onus of proof, hearings in secret, abolition of the rule against double jeopardy.

“It’s really disappointing and I think it is a misnomer to call this an appeal — it is not an appeal, they (ASADA) had a right to appeal and they chose not to exercise it.

“An appeal is when you review the legal correctness of the judgment.

“This judgment of the AFL Anti-Doping Tribunal … I don’t think is amenable to appeal.

“So instead, this is a re-prosecution — we don’t make people charged with serious criminal offences go through that let alone these guys.”

Turnbull in favour of amending section 18C

MELBOURNE INSTITUTE CONFERENCE

Federal Communications Minister Malcolm Turnbull was interviewed on Channel Ten’s the Bolt Report this morning. Among a range of issues discussed during the interview was section 18C of the Racial Discrimination Act 1975. This exchange will be of particular interest to FreedomWatch readers:

Andrew Bolt: Do you support reforming the Racial Discrimination Act to allow more debate on the race politics that is now confronting us?

Malcolm Turnbull: …there was a broad consensus among lots of interested groups and stakeholders that the words ‘insult’ and ‘offend’ could be removed, leaving the words ‘humiliate’ and ‘intimidate’.

AB: Did you support that?

MT: I think that was broadly supported across the board.

AB: By you too?

MT: I was very comfortable about that. I didn’t think that would have any negative impact.

You can watch the video here (the relevant part of the discussion begins at 5:17, though you’ll be interested in the whole segment).

It’s a welcome development. We haven’t heard this from Turnbull before and it is encouraging to hear the communications minister make clear his position on the issue.

There’s another interesting aspect to this. Turnbull’s position is entirely consistent with the Racial Discrimination Amendment Bill 2014, introduced into the parliament by Senator Bob Day last year. We trust Turnbull will be making the argument in cabinet that the correct position for the Abbott government on Senator Day’s bill is a resounding ‘yes’.

Latika Bourke has also covered this story at the Sydney Morning Herald.

Hartwich: plain packaging goes to the heart of civilisation

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Dr Oliver Hartwich

Dr Oliver Hartwich, executive director of the New Zealand Institute, has made an important contribution on plain packaging legislation:

One of the greatest advances of civilisation is also one of the least obvious: branded products.

We take brands for granted because they are everywhere. People do not just drive any car but a Holden, a Ford or a Ferrari. For fast food lovers, there is a world of difference between McDonald’s, KFC and Burger King. Fashion aficionados care about labels as much as techies do about smartphone brands.

The reason we care about brands is because they provide orientation in markets. People trading with each other have spontaneously found out how useful brands are in this process.

Read the full article here.

Leyonhjelm: constitutional recognition is the “politics of the empty gesture”

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NSW LDP Senator David Leyonhjelm eloquently argues ($) in The Australian today that the push for constitutional recognition is disconnected from the reality faced by Aboriginal and Torres Straight Islanders:

Seven years ago, the Rudd government apologised to the Stolen Generations. As the recently released Closing the Gap report indicates, this achieved nothing for Aboriginal living standards.

The unemployment rate for Aborigines and Torres Strait Islanders is still three times the national average, and Aborigines overall have shocking health outcomes and die at younger ages, especially in rural and remote areas.

You’d think the politics of the empty gesture would have fallen out of fashion by now. But no; if anything, things are getting worse. They now include the ridiculous claim that recognising indigenous Australians in the Constitution will somehow improve their health and welfare.

Academic prejudice at the University of Western Australia

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An example of the anti-intellectual prejudice of modern day academia has played out at the University of Western Australia this week. The planned Consensus Centre, which was to be headed by world-leading academic Bjørn Lomborg, has been rejected by UWA. The decision comes after a vocal backlash from activists that prefer to shout down ideas rather than debate them.

Herald Sun journalist Andrew Bolt’s analysis is worth reading. It’s particularly interesting to read through Bolt’s long list of academic grants that haven’t generated a peep from the narrow sectional interests that have caused a media storm over the Lomborg proposal.

Was the Gillard government’s media regulation policy politically motivated?

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The shocking answer revealed in a terrific edition of The Australian‘s Cut & Paste ($) today:

The truth behind the Gillard government’s media laws and a new budget pitch emerge.

Politics at play? Perish the thought. Stephen Conroy announces the Gillard government’s media laws, March 12, 2013:

The government passionately believes in freedom of the press as the cornerstone of democracy.

Nothing political at all. Julia Gillard, Hansard, the following day:

This is about a system of better self-regulation which would mean, of course, that we see a functioning press council, or press councils, self-regulating the media. I think that is appropriate and certainly in line with the best of freedom of speech.

No, no, no. Conroy, also from Hansard, March 13:

All the package that we have put forward is about, is promoting principles of privacy, fairness.

No threats. Conroy continues:

At no time have this government threatened the media or intimidated the media.

Just policymaking as usual. More Conroy from Hansard, March 13:

This is just a hate-media attack according to those opposite. This is what you claim: vengeance is what you claim. This has been policy that I have already demonstrated: seven discussion papers throughout 2011; 340 detailed submissions; and over 28,000 comments, and that is just in the convergence review before we get to the Finkelstein inquiry. Many people have many views.

Except … Gillard speechwriter Michael Cooney on Conroy in his just-released book, The Gillard Project:

The bloke is a lion … No other person would have risked introducing a package of media reforms designed to break the irresponsible, politicised editorial culture of News Limited.

Irresponsible and politicised? Cooney continues:

If you remember there was still an election to win, then taking on this virtual monopoly on popular print news was irresponsible … By February we were cooked and had one last chance to strike a blow for progress, then maybe it was worth a try.

Bitter and vindictive, more like it. Cooney concludes:

As a result of not acting in 2013 we will all simply have to wait for technology or succession to fix the News Corp problem.