a model of workplace bullying based on the optimizing behavior of a bully, a target and the bystanders. The model implies that workplace bullies disguise their bullying so as to seemingly comply with anti-bullying statutes. Workplace bullying is different from that of the schoolyard; it is more precise, more subtle and more strategic. Workplace bullying subsumes whistleblowing. When an employee blows the whistle, they initiate a process where the firm is now exposed to a new risk. The risk-minimizing firm has a choice whether to fully protect the whistleblower, or to absorb the ethics of the respondent to the whistleblowing. When a firm decides to underwrite the respondent, their optimal strategy is that of the invisible hand which is designed to inhibit the career of the whistleblower and induce their exit from the firm; without signaling that to a regulator. The whistleblower is placed on a slow drip. Regulators, like whistleblowers, must learn to become more strategic.
27 June 2015
'The Invisible Hand: When the Firm Becomes the Bully' by Kim R. Sawyer develops
'The Corporation As Time Machine: Intergenerational Equity, Intergenerational Efficiency, and the Corporate Form' by Lynn A. Stout in (2015) 38(2) Seattle University Law Review 685 comments
the board-controlled corporation can be understood as a legal innovation that historically has functioned as a means of transferring wealth forward and sometimes backward through time, for the benefit of present and future generations. In this fashion the board-controlled corporation promotes both intergenerational equity and intergenerational efficiency. Logic and evidence each suggest, however, that the modern embrace of “shareholder value” as the only corporate objective and “shareholder democracy” as the ideal of corporate governance is damaging the corporate form’s ability to serve this economically and ethically important function.
26 June 2015
In 'European Data Protection Regulation and the New Media Internet: Mind the Implementation Gaps' (University of Cambridge Faculty of Law Research Paper No. 30/2015) David Erdos comments
An extensive survey of European Economic Area (EEA) Data Protection Authorities (DPAs) explored the interface between the EU Data Protection Directive and the publication activities of seven types of ‘new media’ internet actor. It is demonstrated that these important regulators have generally adopted an expansive interpretative approach, holding data protection norms to be strongly engaged across this landscape. In contrast, implementation has been weak. Except for street mapping services, each type of new media actor had only faced relevant enforcement action from a minority of DPAs. DPA financial resourcing was also very limited. In addition, the reported enforcement efforts of the DPAs were far from harmonized. Extensive enforcement correlated with a particularly stringent interpretative approach but surprisingly not with better financial resourcing. The proposed General Data Protection Regulation is only likely to make a modest contribution to resolving these serious problems.He goes on to state
the survey demonstrated that DPAs have generally adopted an expansive interpretation of data protection’s role vis-à-vis new media expression. In contrast, as regards both the track-record of most DPAs and the financial resources they have at their disposal, the regime established to implement these standards has been weak. In sum, notwithstanding a general understanding by DPAs that data protection standards are clearly engaged by the publication activities of all seven new media actors inquired about, the survey indicated that only street mapping services had faced enforcement action from more than a minority of these agencies since the transposition of Directive 95/46. Moreover, the survey suggested that on average responding DPAs had a budget for all their data protection activities of approximately €3.4M, which translates into a median per capita budget of just €0.33. Additionally, the survey uncovered evidence of a serious lack of harmonization as regards different DPAs’ enforcement efforts, with a small minority (10%) reporting that they had taken relevant enforcement against all seven new media actors, and a rather larger group (24%) reporting no enforcement action against any of them. Somewhat surprisingly, these differences were not correlated with divergence in the DPA financial resourcing but, rather, appeared affected by continuing disparity in the stringency of each regulator’s interpretative stance. In sum, the general gap between interpretation and implementation, coupled with the additional divergence between DPAs themselves as regards their enforcement efforts, belies the claim that Directive 95/46 provides, at a practical level, either the high5 or equivalent6 level of personal information which it mandates must be ensured. Although some of these problems have been recognised during the current process of European data protection reform, it seems that the proposed General Data Protection Regulation will likely only make a modest contribution to their resolution.
The rest of this paper is structured into the following seven sections. Section one briefly introduces the essential legal context including the default structure and substance of Directive 95/46, the original debate on its interface with public freedom of expression and the evolution of thinking on this issue consequent to the seminal case of Lindqvist. Section two then outlines the methodology adopted in the research presented, including elucidating the specific questions put to DPAs in the 2013 survey. Section three presents the general results of the survey, whilst section four analyses these results. Section five then turns to explore the significant intra-DPA divergences as regards enforcement, focusing on whether these might explained by divergences in the level of financial resourcing of these agencies and/or by variation in the stringency of their interpretative stance. Section six explores the likely future shape of European data protection. Finally, section seven offers some brief conclusions.
25 June 2015
There's bleak amusement to be gained from the Abbott Government's green paper [PDF] on a 'New Federation', aka a revamped federalism with a significantly smaller public sector.
The paper comments
The paper comments
What’s the problem we are trying to solve? In embarking on any reform agenda, the first question that needs to be asked is—what is the problem we are trying to solve? According to the Australian Constitutional Values Survey, over 80 per cent of Australians thought the performance of the Federation could be improved. Clearly, in the public’s mind there is a problem. What is not as clear is whether that problem is with the model of federalism, a perception of being ‘over governed’, or something more concrete.
The stakeholder roundtable consultation process (undertaken during February and March 2015 to inform this Green Paper) revealed that, while the checks on the power of any one government provided by the Federation is valued, the way governments work together could be improved, especially in the design of policies that affect the delivery of public services.
The consistent messages from the stakeholders included:
- The need for all governments to either get out of one another’s way, or if there was a genuine need for multiple governments to be involved, there should be a co-design of policies, to ensure they were done well and were the right fit, accompanied by mutual respect for each other’s competence and contribution.
- Related to this, the importance of preserving diversity as to how services are designed and delivered—taking account of local considerations, cultural sensitivities, and that all providers should have a freer hand to design, or adapt, services based on what was actually needed at the local level.
- The importance of clear responsibility and public accountability and the role of independent mechanisms (like independent bodies or institutions) to provide clear and easily understood information on the performance of all governments, including how governments are spending their money—participants were more reassured when independent and credible bodies that were at ‘arm’s length’ from all governments had a role in reporting on their performance.
- The need for all governments to provide durability of funding and policy direction, while still allowing room for different governments to implement their electoral mandates—participants felt competing policy agendas did more harm than good in improving services, and there was far too much chopping and changing by governments on their policies and how services were delivered, which meant they could never really have any certainty about their funding, see anything through, or plan well for the future.
- The desirability of the Commonwealth continuing to play a national leadership role by bringing the States and Territories ‘to the table’ to seek agreement in the setting of high level policies and strategies, national goals and standards (whether they were funding, quality, performance or achievement, reporting, content or regulatory standards)—participants considered that a range of important national policies or architecture would ‘collapse’ if the Commonwealth withdrew.
All agreed that any reallocation should not just be a ‘rearranging of the deck chairs’, or a theoretical exercise in changing what already exists.
The overarching goal should be to ensure governments have the right incentives to continuously improve the services provided to Australians, which in turn will improve their wellbeing and standard of living.
This goal was ratified by the Council of Australian Governments (COAG) at its meeting on 17 April 2015, where it “agreed the goal of Federation reform is to improve the standard of living and wellbeing of Australians through better services”.
Stakeholders frequently stated that too much of their time was taken up sorting out the requirements of the different levels of government, both trying to achieve the same outcome in the same area.
In the end, it is not clear to the person on the street—the patient, the student, the tenant—who is responsible for what. Numerous commentators, including the Business Council of Australia and the Committee for Economic Development of Australia, have also cited the overlap and duplication caused by the involvement of multiple levels of government in a policy area, and that more consideration needs to be given to the effect this has on businesses and service providers.
The result is less efficient, more costly, and in some cases, poorly coordinated, services.
If the goal of this reform process is to improve the services provided to Australians, the first question to ask is what prevents this from happening now?
One of the largest problems intruding on the delivery of better services to Australians is how the current arrangements within the Federation are structured and the impact this has on the incentives within each sector—whether the current roles and responsibilities create strong incentives for better quality services that are delivered efficiently and support a strong economy. This, therefore, requires a careful assessment of who is responsible for what, how those responsibilities are being carried out, and how this drives the behaviour of key players in the sector.
In some instances, roles and responsibilities between the Commonwealth and the States and Territories are clearly delineated. For example, in higher education the Commonwealth’s role as the major player in the system is uncontested and universities—most of which are established under State and Territory legislation—deliver services independently.
In other sectors, however, roles and responsibilities are increasingly shared or overlapping.
The Issues Papers on education, health, and housing and homelessness (released in December 2014) showed there is overlap and duplication in these areas, where governments share responsibilities and roles within those responsibilities.
If the challenge is to develop a set of arrangements that allow for better services to be designed and delivered for all Australians, then consideration should be given to the best way to determine the configuration of roles and responsibilities to achieve this.
One of the weaknesses in how roles and responsibilities in Australia’s Federation have evolved is that they have largely arisen based on governments’ separate desires to take on for themselves a specific role, to initiate a specific policy or programme in a particular area of responsibility, or in response to a specific issue, rather than being a consequence of genuine collaboration between governments to co-design reforms.
This has led to an increased blurring of roles and responsibilities between the Commonwealth and the States and Territories, with each level of government performing different, or in many cases, overlapping functions.
At its worst, these kinds of blurred arrangements have meant:
- there is no way of governments looking at how the whole system comes together, how it is working for Australians, and whether the incentive structures within the system are the right ones to ensure the delivery of the most efficient and high quality services;
- different governments have license to, and are usually tempted to, pursue the objectives that matter most to them in exercising their roles and responsibilities which often compete with another level of government’s objectives for the same sector, and which organisations delivering the front-end services to the public often have to try to reconcile, or make sense of, by themselves;
- there are incentives for one level of government to shift costs to another, leading to higher costs and lower quality services for Australians;
- there is often ‘buck passing’ between levels of government, meaning no one really knows who is responsible for what; and
- the incentive structures in the system are usually (but not always) geared towards governments’ interests, or have been shaped in response to advocacy by providers, rather than being focused on what Australians need and want, including choice and having a voice in how services are designed and delivered.
Finding success stories that demonstrate how these kind of blurred arrangements have worked, and translated to actual improvements in the delivery of services, is hard.
There have been some successes for collaboration in joint areas of responsibility, including the National Competition Policy, gun control reforms in the wake of the 1996 Port Arthur tragedy, and the AIDS campaign in the 1980s.
More recently the structured collaboration on the design and implementation of the National Disability Insurance Scheme (NDIS) is a good example of successful cooperation. These, however, are not widespread across other areas of responsibility.
Instead, many advances in the delivery of better services have come through competitive forces within the Federation, rather than through genuine or deliberate efforts from governments to co-design and collaborate upfront on policies of shared need.
It is not necessarily a bad thing to have competition between State and Territory governments driving service delivery improvements. Reforms that are shown to work in one jurisdiction can put pressure on other States and Territories to adopt similar reforms, resulting in a ‘race to the top’ in the delivery of services to the public. The failure of some programmes can also assist other jurisdictions in avoiding pitfalls, or observing how some of the incentives in the system have actually been working against the provision of better services.
In terms of the Commonwealth’s involvement in the development of shared arrangements, it has largely been ‘horses for courses’ and has usually depended on how important it considered the issue to be.
It varies between providing leadership in complex national markets and policy areas—where leadership could mean a more ‘light touch’ role in facilitating the development of national standards—to taking a far more ‘hands-on’ and direct role in areas such as the delivery of services specifically aimed at assisting Indigenous people.
If getting the incentives right for improved service delivery for Australians is the main game, a better approach would see all governments working together upfront to co-design reforms, systems and markets; roles and responsibilities for each level of government would then be rationally and deliberately determined as a consequence of that.
This is what the Reform of the Federation White Paper is trying to do now, within our existing constitutional framework. This could include governments agreeing that either (1) one level of government is solely in charge of the system, with the other level of government ‘vacating the field’ and getting out of the other’s way, or (2) where this is not practical for various reasons, governments better coordinating and formally sharing their efforts with an eye on greater equity, efficiency and effectiveness in delivering outcomes to citizens, or (3) some combination of both approaches.
This kind of approach would mean that the commitment to ensuring the allocation of roles and responsibilities is amplified; all governments would have some ‘skin in the game’ and have a mutual interest and common goal in ensuring that the configuration of roles and responsibilities—including the incentive structures—are right to deliver services well.
The current state of federal financial relations, and the degree of the Commonwealth’s financial power in the system which makes the States and Territories dependent on it to finance their spending responsibilities, contributes to the complexity of our federal system. It creates perverse incentives that make genuine intergovernmental partnership difficult.
This underlying structural feature of our Federation—the mismatch between revenue and expenditure responsibilities between the different levels of government—is known as vertical fiscal imbalance (VFI), which is discussed in more detail in Chapter 5:Federal financial relations.
Australia’s degree of VFI is very high by international standards.
The Commonwealth raises 82 per cent of total tax revenue, the States and Territories raise 15 per cent and local governments the remaining three per cent.15 By contrast, in Canada (another federation with similar characteristics to us), the central government raises only 45 per cent of total tax revenue.
Further, Commonwealth transfers (including the GST) comprise about 45 per cent of total State and Territory revenue ... While there is no ‘easy money’ to be found by governments, there are arguments that can be made about whether all governments are using their tax bases as efficiently as possible—the current situation sees the States and Territories rely on the Commonwealth to fund a large proportion of the delivery of their services.
Australia’s high degree of VFI is a problem because it can create a situation where the States and Territories blame the Commonwealth for not passing on enough funds to deliver their services, or where the Commonwealth can blame the States and Territories for not using taxpayers’ funds properly (blame shifting).
This is compounded by the ability of the Commonwealth to attach detailed conditions, or matching requirements, to funds—in effect constraining the flexibility and manner in which a State or Territory spends, not only Commonwealth, but State or Territory money. While the Commonwealth has made considerable use of its superior fiscal power in the Federation, the States and Territories have generally responded in such a way that suggests they would rather have the funding—with the conditions—than not have the funding at all.
Addressing the mismatch between revenue and expenditure in Australia would go a long way toward ensuring governments can no longer shift the blame of policy failures and the costs of policy responses between them.
This is one reason why the relationship between the Commonwealth Government’s Reform of the Federation White Paper and the Tax White Paper is so important.
The Tax White Paper is looking at revenue for all levels of government through a comprehensive analysis of Australia’s tax system. The Federation White Paper is looking at expenditure responsibilities and how revenue should be shared between governments so they can meet these responsibilities. Given the link between the two, the Federation and Tax White Papers are being progressed together. As the current arrangements now stand though, they leave Australians with a confusing type of federalism that may make some kind of sense to some bureaucrats and academic experts but leaves the public—the ultimate users of the services—with services that do not have the right kind of incentive structures or perhaps are not designed or delivered as well as they could be, and unclear about who is responsible for them.
Ultimately, Australians want high quality public services—regardless of who delivers them—but they also want to know who is responsible when those services are not up to standard or fail to deliver.
The Federation as it currently operates does not always allow this to happen.
The Productivity Commission in its report [PDF] on trade assistance 2013-14 has reiterated past cautions regarding faith-based development of bilateral/multilateral free trade agreements.
The Commission comments
The Commission comments
The negotiation and commitment processes for these agreements have raised concerns about a lack of both transparency of the provisions being negotiated and rigorous assessment before the Australian government commits to signing. Post-negotiation assessments can only result in the Government deciding not to proceed with ratification.
Investor State Dispute Settlement activity
The Australian Government continued defence of its tobacco plain packaging laws in a case brought by Philip Morris Asia in the Permanent Court of Arbitration and a number of countries in the WTO dispute settlement body. This case highlights the potential (and un-provisioned) contingent liability of Investor State Dispute Settlement (ISDS) provisions in trade and investment agreements that confer procedural rights to foreign investors not available to domestic residents.
The final outcome of the case is not expected to be known for some time. The ongoing costs to Australian taxpayers of funding the preparation and defence of the tobacco plain packaging legislation, and the ultimate ruling, are unknown, unfunded and likely to be substantial.
During 2013-14, there were 19 new anti-dumping investigations initiated — compared to 13 in 2012-13. Overall, at the end of June 2014, there were 48 dumping measures in force, up from 40 the year before. Given the significant recent changes in the anti-dumping regime and the potential for an increase in the number and size of anti-dumping actions,there is a need for close monitoring of outcomes. It would be timely for a formal and independent review of the anti-dumping arrangements and outcomes to be undertaken. This is important to ensure that the arrangements do not persist beyond the identified period or scope of the complaint; minimise costs on the product users, and consider whether there is evidence of any emerging abuse of the system. Such a review should consider the need for a national interest test as recommended by the 2009 Productivity Commission review.
Concerns remain about preferential trade agreements
The proliferation of preferential trade agreements at the bilateral and regional level (referred to commonly as ‘free trade agreements’) is adding to the complexity and business transaction costs of the international trading system. However, the practical impacts of agreements being entered into by Australia remain unclear and highlight the need for thorough evaluation of the negotiated agreement text prior to their signing. In substance, the devil resides in the detail of these agreements and full and transparent analysis is not afforded to the final texts for many of them.
Amongst other things, preferential agreements are resulting in:
- different product - specific rules of origin for merchandise trade and ownership - based origin rules for services and investment across agreements
- variable coverage of services sector liberalisation across agreements
- more stringent intellectual property rights protection
- the adoption of investor state dispute settlement procedures that depart from the national treatment principle, to grant rights of legal recourse for commercial loss to foreign investors not available to national investors.
There is a growing and compelling case for the negotiated text of an agreement to be comprehensively analysed before signing, including:
- the complexity of bilateral and regional trade agreements
- the potential for trade preferences to impose net costs on the community
- the availability of alternative reform strategies
- the risk that domestic reform may be delayed to retain negotiating coin.
However, current assessment processes in Australia fall well short of what is needed to adequately assess the impacts of prospective agreements. This is reflected in the wide and concerning gap identified in comparing the assessment analysis undertaken for the Japan Australia EPA with the Commission’s previously-published benchmarks of what constitutes a comprehensive pre-execution assessment. Current assessment processes do not systematically quantify the likely costs and benefits of negotiated texts to an agreement, fail to consider the opportunity costs of pursuing preferential arrangements compared to unilateral reform and ignore the extent to which agreements actually liberalise existing markets (figure 8). For example, the JAEPA and other bilateral agreements can deny foreign-owned or controlledservices businesses in Australia access to the liberalising provisions of the agreement via the partner economy. The substantial level of foreign direct investment in services (amounting to nearly $265 billion by value or 40 percent of total foreign direct investment in Australia) raises the possibility that such ‘denial of benefit’ provisions could divert services trade and investment flows, diminishing the potential liberalising benefits of an agreement.
Another issue is the extent of additional liberalisation achieved through an agreement and the degree of disparity across respective agreements. For example, an index-based analysisby the WTO indicates that services provisions negotiated under the ASEAN-Australia-New Zealand agreement added little if anything, to those already afforded by services commitments under the General Agreement on Trade in Services (GATS). On the other hand, application of the same methodology to the analysis of bilateral concessions under the Australia-United States agreement indicated a substantially higher level of bilateral concessions by Australia than afforded under GATS commitments. This is consistent with an observation by the WTO that larger trading powers tend to receive more concessions in preferential trading agreements than other trading partners. An issue where such differences arise is the extent that the varying concessions lead to costly services trade diversion
The Senate Committee on Foreign Affairs, Defence and Trade in its report on The Commonwealth's Treaty Making Process has similarly criticized what I've elsewhere described as a black box approach to trade negotiations in connection with the proposed Transpacific Partnership Agreement (TPPA).
The report offers the following recommendations -
The report offers the following recommendations -
R1 - that parliamentarians and their principal advisers be granted access to draft treaty text upon request and under conditions of confidentiality throughout the period of treaty negotiations. The committee recommends that the government provides an access framework and supporting administrative arrangements.
R2 - that the Joint Standing Committee on Treaties adopt a process of ongoing oversight of trade agreements under negotiation. This process is to include: private briefings from the Minister for Trade and Investment and the Department of Foreign Affairs and Trade under conditions of confidentiality at key points during negotiations; consultation with stakeholders with confidential access to negotiating texts, to enable JSCOT to form an evidence-base for its oversight work; writing to the minister and inviting the minister to respond to its concerns; and a summary of its ongoing oversight role, including relevant correspondence with the minister, as an annex to its public report on the agreement.
R3 - that the Parliamentary Joint Committee on Human Rights consider the human rights implications of all proposed treaties prior to ratification and report its findings to parliament.
R4 - that on entering treaty negotiations, Australia seeks agreement from the negotiating partner(s) for the final draft text of the agreement to be tabled in parliament prior to authorisation for signature. In the absence of agreement, the government should table a document outlining why it is in the national interest for Australia to enter negotiations.
R5 - that, subject to the agreement of negotiating countries, the Department of Foreign Affairs and Trade publish additional supporting information on treaties under negotiation, such as plain English explanatory documents and draft treaty text.
R6 - that stakeholders with relevant expertise be given access to draft treaty text under conditions of confidentiality during negotiations. The committee recommends that the government develop access arrangements for stakeholders representing a range of views from industry, civil society, unions, consumer groups, academia and non-government organisations.
R7 - that the government, prior to commencing negotiations for trade agreements, tables in parliament a detailed explanatory statement setting out the priorities, objectives and reasons for entering negotiations. The statement should consider the economic, regional, social, cultural, regulatory and environmental impacts which are expected to arise.
R 8 - that a cost-benefit analysis of trade agreements be undertaken by an independent body, such as the Productivity Commission, and tabled in parliament prior to the commencement of negotiations or as soon as is practicable afterwards. The cost-benefit analysis should inform the government's approach to negotiations.
The committee further recommends that: treaties negotiated over many years be the subject of a supplementary cost-benefit analysis towards the end of negotiations; and statements of priorities and objectives and cost-benefit analyses stand automatically referred to the Joint Standing Committee on Treaties for inquiry and report upon their presentation to parliament.
R9 - that the government develop a model trade agreement that is to be used as a template for future negotiations. The model agreement should cover controversial topics such as investor-state dispute settlement, intellectual property, copyright, and labour and environmental standards and be developed through extensive public and stakeholder consultation.
R10 - that National Interest Analyses (NIAs) be prepared by an independent body such as the Productivity Commission and, wherever possible, presented to the government before an agreement is authorised by cabinet for signature. NIAs should be comprehensive and address specifically the foreseeable environmental, health and human rights effects of a treaty.The Committee concludes -
The committee is left in no doubt that in respect of the Commonwealth treatymaking process there is a groundswell for change backed by compelling evidence and practical suggestions for improvement. The committee received evidence from leading industry bodies, the union movement, academic experts and other stakeholders voicing frustration with the lack of effective consultation and parliamentary engagement during treaty negotiations.
Much was made 20 years ago of a so-called 'democratic deficit' surrounding treaty-making. The reforms introduced in the mid-1990s, following the landmark Trick or Treaty? report, strengthened the treaty-making process and gave parliament a greater say through the establishment of the Joint Standing Committee on Treaties (JSCOT) and the mandatory tabling of treaties in both houses of parliament. However, a 'democratic deficit' has remained a feature of the process, albeit with a different complexion today as the scope and reach of trade agreements into domestic law is unlike anything previously seen. While the 1996 reform package was undoubtedly ground-breaking at the time, twenty years on the global environment in which trade agreements are negotiated and community expectations of transparency and accountability have changed to such an extent that the case for review and further reform is compelling.
Debate on treaty-making no longer revolves around the underlying issue of the role of the executive versus parliament and the use of the external affairs power. The committee chose not to address parliament's constitutional reach into treatymaking, other than to note that there may be no constitutional barriers to parliament playing a greater role in the treaty-making process.
In recent years the debate has shifted direction—to consider the way that large and complex free trade agreements such as those with Korea, Japan and China and the Trans-Pacific Partnership (TPP), are encroaching on the Australian domestic sphere without an adequate level of stakeholder engagement, public consultation, parliamentary oversight and executive accountability. The committee agrees with Associate Professor Weatherall's contention that balancing transparency and accountability in treaty-making with the need for government to negotiate and secure outcomes that further Australia's national interests is a conundrum that does not lend itself to easy resolution.
The committee found it significant that nearly all witnesses challenged two major claims by the Department of Foreign Affairs and Trade (DFAT): that Australia's current treaty-making process is effective, workable and reflects a careful balancing of competing interests; and that the parliament plays a significant role in relation to the scrutiny of treaties. The evidence was overwhelmingly critical, and occasionally scathing, of these claims. Three key points were raised in evidence to the inquiry. First, that there needs to be a significantly higher level of consultation in treaty-making before agreements are signed and that more information should be communicated to stakeholders and the public about how agreements will affect them. Second, that parliament should have opportunities to play a constructive role during negotiations that goes beyond rubber-stamping agreements after they are signed. Third, that proposed treaty action should be subject to independent assessment at the commencement of negotiations and monitoring and evaluation after implementation, to ensure that mistakes and unintended consequences are not repeated.
This is precisely the space where the committee has sought to add value. The package of recommendations in this report address the following issues around the treaty-making process: • transparency: ensuring a higher level of transparency through parliamentary and stakeholder access to draft treaty text on a confidential basis during negotiations; • consultation: improving the effectiveness of parliamentary and stakeholder consultation during negotiations; and • independence: ensuring independent analysis of treaties at the commencement of negotiations and, if required, post-implementation.
A major sticking point for stakeholders was being kept in the dark about the text of draft treaties during negotiations and having to voice concerns 'blindfolded', as one industry group put it. The committee heard a range of evidence on this issue, most of which was critical of the negotiation process in one way or another. The committee does not accept that the process is as 'open' as DFAT makes out, or agree with the department's inference that a large number of stakeholders who have been consulted, possibly in the hundreds of thousands, had no reason to make a submission to the inquiry because they were satisfied with the process. Openness implies access to information and this is not occurring during the negotiation of free trade agreements as the committee heard from stakeholders. The committee is unable to speculate on the views of stakeholders that did not present evidence.
While the committee accepts that absolute transparency in treaty making is an unrealistic expectation, absolute secrecy in the current globalised environment of treaty-making is equally unrealistic and therefore in need of changing. The argument that it is in Australia's national interest for texts of bilateral and plurilateral treaties to be kept confidential prior to signature is increasingly under challenge. The committee acknowledges that the practice of keeping aspects of trade negotiations secret has a long history going back to the original General Agreement on Tariffs and Trade negotiations in 1946–47, but it has not always been so and international best-practice appears to be heading in the opposite direction. Criticism from academic experts and consideration of contemporary international practice demonstrates that absolute secrecy in trade negotiations is a relatively recent development reflecting the proliferation and complexity of agreements where significant and long-term commercial interest are at stake.
The committee believes that the benefits of increased transparency during free trade negotiations outweigh a perceived risk to the national interest from public disclosure. However, the committee has not recommended publication of draft text before negotiations are completed as there are other ways of sharing information short of publication. Divulging draft text may be detrimental to achieving the best outcome possible and may breach confidentiality agreements signed when negotiations begin. Other more sensible and practical suggestions were raised in evidence that could be implemented during future trade agreement negotiations.
The committee accepts that transparency is not an all or nothing proposition and may apply at different levels in treaty negotiations. A more flexible approach to transparency may be preferable to mandating the public release of every draft treaty, depending on the nature of the agreement. This is consistent with the negotiation process followed by some of Australia's trading partners which vary to a significant degree. The committee believes that this report's careful approach balances confidentiality with the desirability for transparency and is in tune with emerging international practice.
An additional concern for the committee is that community confidence in the negotiation of FTAs is probably at its lowest ebb in Australia, fuelled in part by excessive secrecy around TPP negotiations, the content of leaked draft chapters and the politicisation of debate. Accusations of scaremongering against those asking reasonable questions and voicing their concerns are not helpful either.
That DFAT consults widely and uses the resources available to pursue the best outcome is not in dispute. The committee accepts that gaining access to DFAT negotiators for private briefings was not a major problem for stakeholders, but the effectiveness and usefulness of the briefings was called into question by many. In consulting with stakeholders, quantity was a poor substitute for quality. One witness valued the opportunity for occasional meaningful engagement with DFAT negotiators, but observed that discussions with DFAT around their negotiations '…have only convinced me that we can do better'. In a similar vein, another witness recalled: 'It is nice to have the conversation but it is not a very high-value engagement at the moment'. And still another expert lamented that DFAT consultations are very much 'one way' with negotiators 'listening but rarely responding'.
At issue for the committee is the lack of meaningful and effective two-way communication. Stakeholders are at a distinct disadvantage in not having access to treaty text, negotiating positions and policy frameworks during negotiations. A challenge for DFAT is that its negotiators are not subject matter experts across the latest developments in Australia and other jurisdictions. The committee is concerned that the size and reach of modern FTAs and the interplay of chapters dealing with complex issues such as copyright and intellectual property (IP) is creating policy and administrative challenges which DFAT does not yet fully understand.
The committee believes there is an urgent need for DFAT to rethink and review its negotiation strategy from the perspective of stakeholder expectations and internal departmental resourcing priorities. This is why the committee recommended that DFAT put in place a process for sourcing expert advice and assistance in areas that may be beyond the technical competency of its negotiating team.
Access for members of parliament
The committee is concerned that Australian federal parliamentarians are not generally able to access treaty text at any stage before an agreement is signed and tabled in parliament. This is unacceptable given that the negotiators and elected officials (and their staff) of Australia's trading partners have long had varying degrees of access under strict conditions of confidentiality. The trend in trade negotiations on both sides of the Atlantic has seen a gradual move away from secrecy towards transparency and controlled access to treaty text by parliamentarians and industry stakeholders. In this context, it is significant that the Obama administration has recently endeavoured to entrench practical access arrangement into domestic law through its 2015 TPA bill.
While the committee welcomes reports of belated access for Australian parliamentarians to the draft negotiating text of the TPP, this development has definitely come too late in the process, given that negotiations are nearing completion and have taken place in secret since 2008.
The committee heard no evidence that access arrangements for parliamentarians are in any way preventing governments from negotiating agreements in the national interest. Yet this continues to be Australia's official line of resistance to change. There is an opportunity for Australia to follow the European Union (EU) and the United States in making the negotiation process more inclusive, less secretive and, ultimately, more accountable to parliament.
At the other end of the policy spectrum, the committee was not convinced by renewed calls to legislate for parliamentary approval of treaties. Evidence to the inquiry relied on the view of some legal experts that limiting the power of the executive by making treaty action conditional upon approval by both houses of parliament would be consistent with the Constitution. Interesting as this may be, it is not an argument for why Australia should proceed down the path of parliamentary approval. The committee is of the view that the arguments add nothing new to the current inquiry, ignore the political reality of their likely rejection by government and provide an easy target for those opposed to change of any kind. Now is not the time to be distracted by the issue of parliamentary approval, which has not been able to gain political traction in Australia, as demonstrated by parliament's rejection of a private member's bill mandating parliamentary approval as recently as 2012.
A role for parliamentary committees
There are other practical and incremental ways to improve parliament's engagement in treaty-making. This report has pointed out the way of the future, building on the work of existing parliamentary committees and their expertise accumulated over many years. Most importantly, there is more that JSCOT can do as a specialised and expert committee to scrutinise and review proposed treaties during the negotiation process. It is not lost on the committee that JSCOT already has the means within its resolution of appointment to undertake inquiries into agreements at any stage during their negotiation, but only if matters are referred by either house of parliament or by a minister. It would appear that a lack of political will may have prevented JSCOT from realising its full potential in this regard.
Evidence to the committee confirmed that JSCOT is a respected committee with a significant body of work and precedent behind it. However, the committee sensed that, over time, confidence in JSCOT's role may be eroding as the scrutiny work it performs on behalf of the parliament is increasingly seen as 'too little, too late' and 'rubber-stamping' agreements already signed by the executive. With regard to the work of the Parliamentary Joint Committee on Human Rights (PJCHR), this relatively new committee has an opportunity to extend its reach into treaty-making and align its existing mandate to the scrutiny of proposed treaties against the backdrop of Australia's international human rights obligations.
The committee has made recommendations for how JSCOT and the PJCHR can play more constructive roles in shining a spotlight on treaties, including issues and documents pertinent to them, during their negotiation and before they are signed. There is also scope for the two committees to work more closely together in the treaty-making space and benefit from sharing each other's experiences and expertise.
Independent analysis and monitoring
Executive responsibility for treaty-making should not prevent independent assessment and monitoring of treaties, especially large and complex FTAs. Equally, it should mandate that government be more up-front with parliament and the public about the national interest reasons for pursuing an agreement. Parliament and the executive should not be seen as mutually exclusive players in treaty-making—a greater role for one does not automatically diminish the authority of the other. The executive should not continue to use its constitutional power over treaty-making as an excuse for rejecting further change.
The committee recommended that government prepare and table in parliament two documents at the commencement of negotiations: a detailed explanatory statement setting out the government's priorities, objectives and reasons for entering into negotiations; and a cost-benefit analysis prepared by an independent body such as the Productivity Commission. Both documents should stand referred to JSCOT for inquiry and report.
These documents and their referral to JSCOT will significantly improve the level of information available at the commencement of negotiations and go some way to restoring public and stakeholder confidence in the process. The cost-benefit analysis should be reviewed when an agreement is finalised, but before it is tabled in parliament, and a supplementary analysis undertaken if circumstances warrant it. This is especially important for free trade agreements which are many years in the making and where the economic and social forecasts underpinning an agreement change significantly over time.
The committee did not hear one positive word about the National Interest Analysis (NIA) and regulatory impact statement which accompanies each treaty. They do not appear to add much value to the process and, in the absence of a cost-benefit analysis, bring to the table an insufficient level of detail. During the inquiry, stakeholders drew the committee's attention to the negative effects of agreements such as the AUSFTA and KAFTA and the fact that these negative outcomes were not even included as a possibility in the NIAs which accompanied them.
It is not surprising that NIAs paint a favourable picture of a trade agreement's potential benefits—that they are prepared by the department responsible for negotiating, consulting and finalising FTAs was singled out for criticism by witnesses. The committee believes that NIAs should be prepared by an independent body such as the Productivity Commission and their scope considerably expanded to include human rights, environmental and health impact assessments (consistent with the domestic reach of current international agreements). The committee believes that its recommendation in relation to the NIA should allay the concerns of stakeholders on this particular issue. A more comprehensive NIA, prepared at arms-length from government and accompanied by an independent cost-benefit analysis, would represent a significant improvement on the current process.
The committee was somewhat dismayed to learn that, given the high volume of treaties Australia has negotiated since 1901, of which 1800 remain in force, DFAT negotiators commence each new free trade agreement with a 'blank piece of paper', as described by one witness. The end result is the accumulation of vertical isolated agreements which must be horizontally navigated by business. To address this phenomenon, the committee recommended that the government create what was referred to in evidence as a template or framework agreement developed by a consensus of industry bodies and other stakeholders through a negotiated process. The point of template agreements is to create loose frameworks and the necessary parameters to enable parties to debate the merits of particular treaty proposals without having to speculate in the dark on the fundamental policy parameters set by the government.
24 June 2015
The SMH reports yet another fake death incident.
Crocodile cruise operator Dennis "Lee" Lafferty of far north Queensland, who died in a car crash last month, has "been unveiled as an American drug fugitive who faked his own death more than 40 years ago".
Lafferty is claimed to be
Crocodile cruise operator Dennis "Lee" Lafferty of far north Queensland, who died in a car crash last month, has "been unveiled as an American drug fugitive who faked his own death more than 40 years ago".
Lafferty is claimed to be
Raymond Grady Stansel Jr, an alleged drug smuggler who supposedly died in a scuba diving accident in 1974. ...
Stansel was indicted that year for smuggling more than 12 tonnes of cannabis into Florida.
But his trial never proceeded, with his lawyer announcing in January 1975 his client had disappeared scuba diving in Honduras. An aerial search of the coastline didn't recover a body.
While many doubted the story, Stansel couldn't be found despite rumours of his ongoing operations reaching the ears of police.
He eventually settled in Queensland before founding the Daintree River Cruise Centre in the late 80s.The Tampa Bay Times reported
Prosecutors described Stansel, then a 37-year-old fisherman and charter boat captain out of Tarpon Springs, as a "soldier of fortune.''
When arrested that June, he had $25,000 in cash, receipts for two $25,000 Rolex watches, signed blank tourist visas that would allow him into Nicaragua at any time, unused checks on a Swiss bank account, flags from six countries and a passport indicating he had been in 12 in the preceding 30 days.
Stansel posted bail with a $500,000 cashier's check, surrendered his U.S. passport and left the Hillsborough County Jail to await a trial scheduled for Jan. 5, 1975, in Daytona Beach.
On the morning of Jan. 5, Stansel's attorney announced that he had disappeared in a scuba diving accident off Roatan, Honduras, on New Year's Eve. His body had not been recovered but airplanes were searching the shoreline.
Few believed the story. On the other hand, no one could find him.