Rule of law

The competition regulator’s hobby horse

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Rod Sims, ACCC chairman, outlining the ACCC’s priorities for 2016 ($):

What we are trying to do is to get higher penalties awarded from the courts in competition cases because our concern is the penalties just aren’t high enough to grab the attention of company boards.

Sims, outlining the ACCC’s priorities for 2015:

The difference between a $10 million fine and a $100 million fine is quite profound. People will sit up and take notice, because it starts to show up in the profit and loss statement and it will grab attention, which is what we are trying to do with our deterrence messages.

It seems nothing has changed in the past year. The ACCC’s attempts to increase penalties which ‘grab attention’ are misguided.

Grabbing attention is what children do to their parents in toy stores. It is certainly not an appropriate enforcement objective for a regulator to pursue.

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Corporate regulator, corporate lobbyist?

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From the AFR today:

The corporate regulator used a confidential letter to tell senators the government’s plan to put more independent directors on superannuation fund boards did not align with the expectations of listed companies.

The letter from the Australian Securities and Investments Commission highlighted inconsistencies between corporate law and the government’s proposed rules for independent directors on super fund boards.

Apparently decision-makers at ASIC believe it is the role of the corporate regulator to lobby parliament. ASIC’s letter to senators during a contentious debate about the makeup of superannuation fund boards is inappropriate.

There are more fundamental reforms to superannuation that need to be made, but as I outlined in the AFR last week, the government’s proposal on independent directors represented a step in the right direction. ASIC should stick to its brief.

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“Unreasonable”, “unjust”, “oppressive maladministration”: ICAC slammed in this latest report

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Inspector of the ICAC, David Levine

ICAC Inspector David Levine issued a scathing review of the New South Wales anti-corruption watchdog, in a report tabled in NSW parliament today.

In particular, ICAC Commissioner Margaret Latham is taken to task for the Commission’s conduct surrounding the controversial investigation of Margaret Cunneen.

Frankly, it is fascinating reading. Here are just some of the quotes from the report:

… It is of concern that the Commissioner issued the Notices… “to attend and produce forthwith” [mobile phones already in ICAC’s possession] given that this in fact rendered them unlawful. This amounts to an abuse of power and serious maladministration. [Page 18]

… I did not yield to the Commissioner’s expectation, I am not subject to the Commission in any respect… [Page 23]

… I can only assume that the Commission at that time had a view that its “independence” was particularly fragile if just stating its obligations to keep the public informed of the steps it proposed to take…  was seen as threatening. [Page 34]

… I find the ICAC email to be insulting, condescending and to border on insolent and reinforces views I have late I have lately expressed as to the breathtaking arrogance of the Commission [Page 34]

… a total lack of understanding of the role of the Inspector… [Page 39]

… This aspect of the conduct of the ICAC I describe, and I believe any ordinary reasonable person would describe, as unreasonable, unjust and oppressive. [Page 51]

… it is another example of unreasonable, unjust, oppressive maladministration on the part of the ICAC. It was a last ditch stance of defiance and… reflects poorly on its standing and objectivity. It is an abuse of the powers reposed in it. [Page 56-7]

To read these quotes in context, read Levine’s report here. Or you can read more ICAC coverage on FreedomWatch here.

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Is this the next step, following mandatory data retention?

Draft national security legislation revealed last Friday would add little value to Australia’s efforts to combat terrorism, and will be a significant regulatory burden on the telecommunications sector.

According to the exposure draft, the Telecommunications and Other Legislation Amendment Bill 2015 would if passed compel carriage service providers to “do their best” to

protect telecommunications networks and facilities from unauthorised interference, or unauthorised access, for the purposes of security. Carriers and carriage service providers must notify changes to telecommunications services or telecommunications systems that are likely to have a material adverse effect on their capacity to comply with this duty 

Since such service providers would naturally “do their best” to see that their networks are uncompromised, it is unclear what is added by the bill. It is fuzzy law at best, and would be remarkably difficult for a person to know if they are meeting their legal obligations.

While the national security benefits are unclear, the proposed regulatory burdens are not. For instance, section 314A(3) of the bill requires carriage service providers to notify the government (the “Communications Access Co-ordinator“) of its intention to implement a change to telecommunications services. Sections 315A and 315B could potentially see the Attorney-General issue directions to carriage service providers to “cease using or supplying… carriage services” or “to do, or to refrain from doing , a specified act or thing within the period specified in the direction.”

From mandatory data retention, to online piracy legislation, 2015 has seen a suite of burdensome but ineffectual laws passed at the intersection of technology, telecommunications and national security. If passed, these new proposals would add to that list.

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Special treatment for environmentalists corrupts the rule of law

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Legal affairs editor Chris Merritt in The Australian today:

The next time some lobby group demands special treatment by federal law, keep in mind how things turned out when politicians caved in to green activists. It cost taxpayers dearly.

The losses are real but they are not the only problem. [A] fundamental tenet of the rule of law has been corrupted by the special treatment of green activists. The most obvious consequence is the ease with which these groups have been using the courts to delay major development projects.

By giving green activists automatic standing to challenge major developments, the politicians in Canberra have given them a level of access to the courts that is denied to everyone else.

This has made it possible for millions of dollars in taxpayers’ funds — and shareholders’ funds — to be lost.

Continue reading here.

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Senate committee backs push to remove special privileges for environmentalists

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This is from the Senate Environment and Communications Legislation Committee’s report of the inquiry into amendments which would remove the special privilege available to environmentalists to conduct activist litigation:

The committee also notes the arguments put forward by those supporting the repeal of section 487, such as the costs to proponents and consequences for economic activity when major development projects are delayed by judicial review sought by groups granted standing by section 487. The committee also acknowledges the significant cost of these challenges to the Commonwealth. The Department of the Environment indicated that it had not recovered costs in the majority of cases where the Commonwealth had been successful in defending the validity of a decision.

The committee considers that the repeal of section 487 will not diminish the protection of Australia’s environment and the conservation of biodiversity and heritage provided by the [Environment Protection and Biodiversity Conservation Act 1999]. … The committee recommends that the Environment Protection and Biodiversity Conservation Amendment (Standing) Bill 2015 be passed.

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Another problem with the ICAC “reforms”

The NSW government assures us that ICAC won’t be able to initiate prosecutions without DPP approval. A report in today’s Australian reveals how problematic that still is:

The NSW corruption watchdog handed over evidence to the ­Director of Public Prosecutions that allegedly omitted statements made in favour of former NSW SES commissioner Murray Kear before his criminal trial.

State Emergency Service assistant commissioner Mark Morrow gave a long statement to ICAC that is understood to include material supporting Mr Kear that was then not provided to the DPP.

The evidence emerged … on October 14 in a case between ICAC and Mr Kear, who is charged with breaching the Whistleblowers Act. The alleged omission casts doubt over the ­effectiveness of NSW Premier Mike Baird’s compromise for the DPP to act as a check on ICAC.

The latest claim follows ICAC’s investigation into former Labor minister Ian Macdonald — who faces charges of misconduct in public office — where evidence ­favourable to him by Labor frontbencher Anthony Albanese was suppressed.

The practice of suppressing ­exculpatory evidence from public hearings could be even more widespread, with ICAC Inspector David Levine confirming he had received several complaints.

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NSW Young Liberal President warns against “muscled-up” ICAC

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NSW Young Liberal President Alex Dore has a terrific piece in the Sydney Morning Herald today criticising moves to grant increased powers to the Independent Commission Against Corruption:

…it makes sense to reconsider ICAC’s structure and reach, but time and time again ICAC has sought to do the opposite. Rather than work within the confines of its jurisdiction, it has sought to expand it.

Earlier this year, it sought to argue that all sorts of acts – for example, lying to a public official – should constitute “corrupt conduct” and therefore fit within the jurisdiction of ICAC to investigate.

It took an appeal by the eminently capable Margaret Cunneen for the NSW Supreme Court and the High Court to reject ICAC’s overstep. How many others could command Ms Cunneen’s intellect, resources, and guts to successfully do the same?

“[ICAC’s interpretation] would also enable the ICAC to exercise its extraordinary coercive powers (with consequent abrogation of fundamental rights and privileges) in areas ranging well beyond the ordinary understanding of corruption in public administration,” read the majority High Court judgment.

But this defeat, and the corollary legal costs, has done nothing to dent ICAC’s ambitions. This week, the state government has given ICAC the power to launch criminal prosecutions for common law offences by issuing a court attendance notice on the advice of the Director of Public Prosecutions. It insists that it is simply restoring powers rejected by a local court judgment and that it can already do so for statutory offences.

In a liberal democracy, conservatism demands that institutions that have served us well be protected: the rule of law, including procedural fairness, is amongst them.

One of the great things about Australians is our healthy skepticism of any institution which gains too much power, and if we’re honest with ourselves, isn’t that exactly what ICAC has become?

Read the full article here.

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