VET mess

Another instance of problems in the VET sector, with announcement by the Australian Competition and Consumer Commission that it has launched Federal Court proceedings against Productivity Partners Pty Ltd, trading as Captain Cook College, alleging systemic unconscionable conduct in breach of the Australian Consumer Law. T

The ACCC alleges that from 7 September 2015 the College, in seeking to improve its financial performance, removed consumer safeguards from its enrolment and withdrawal processes for online courses. ACCC Commissioner Sarah Court stated

We allege that Captain Cook College engaged in systemic unconscionable conduct designed to maximise profit at the expense of their students 

We are very concerned by Captain Cook College’s decision to make process changes that we will submit removed consumer safeguards. We allege that this significantly reduced the College’s ability to detect misconduct by its sales agents and assess a consumer’s suitability or participation in the course they had been enrolled in. 

We further allege that the removal of consumer safeguards increased the number of students that Captain Cook College enrolled and who remained enrolled, allowing the College to increase VET FEE-HELP payments from the Commonwealth,” 

The ACCC indicates that  approximately 5,500 affected consumers whose enrolment was processed during the period from 7 September 2015 have VET FEE-HELP debt, totalling over $60 million. Around 98% of those 5,500 people failed to complete any part of the course in which they were enrolled. Around 86% never logged in to their online course.

The ACCC also alleges that the College made false or misleading representations, engaged in unconscionable conduct and failed to provide unsolicited consumer agreement protections in its dealings with four individual consumers.  Further,  Ian Cook (former Captain Cook College CEO), Site Group International Limited (Site, the parent company ) and Blake Wills (former COO of Site) were knowingly concerned in the systemic unconscionable conduct.

 The ACCC is seeking pecuniary penalties, declarations, corrective notices, adverse publicity orders, finding of fact orders and orders requiring the implementation of a consumer law compliance program, costs and orders disqualifying Wills and Cook from managing corporations.

The ACCC notes

 There is currently a legislative mechanism available under the Higher Education Support Act 2003 (Cth) (HESA) to cancel VET FEE-HELP debts of consumers enrolled from 1 January 2016 if they were affected by “unacceptable provider conduct”, and satisfy other legislative criteria. No such mechanism currently exists for consumers enrolled before this date. ...   

On 20 September 2018, the Australian Government announced that it would introduce legislation to amend the HESA to allow for the cancellation of VET FEE-HELP debts of consumers that were affected by “inappropriate provider conduct”, including those who enrolled prior to 1 January 2016.

Only a cynic would regard the proposed legislation as putting a bandaid on the horse's door after the livestock have run off with the money while regulators were asleep.

Consumer Data Right and Fintech Disruption

Technological Change and Financial Innovation in Banking: Some Implications for Fintech (Federal Reserve Bank Atlanta Working Paper 2018-11) by W. Scott Frame, Larry Wall, and Lawrence J. White comments 

Financial intermediation has changed dramatically over the past 30 years, due in large part to technological change. The paper first describes the role of the financial system in a modern economy and how technological change and financial innovation can affect social welfare. We then survey the empirical literatures relating to several specific financial innovations, broadly categorized as new production processes, new products or services, or new organizational forms. In each case, we also include examples of significant fintech innovations that are transforming various aspects of banking. Drawing on the literature on innovations from the 1990s and 2000s informs what we might expect from recent developments.

 The authors state

 Financial intermediation has changed dramatically over the past 30 years, due in large part to technological change arising from advances in telecommunications, information technology, and financial practice. This technological progress has spurred financial innovations that have altered many financial products, services, production processes, and organizational structures. To the extent that such financial innovations reduce costs or risks, social welfare may be improved. Of course, many financial innovations fail owing to fundamental design flaws or simply being replaced by better alternatives. 

A good example of technological change that has been dramatically reshaping the financial services industry is the ongoing shift from relying on human judgment to automated analysis of consumer data. This has taken what had been largely local markets for banking services and opened them up to nationwide competition from other banks and nonbank financial institutions. For example, retail loan applications are now routinely evaluated using credit scoring tools built using comprehensive historical credit registry databases. This automated approach eliminates the need to have a local presence to make a loan and substantially reduces underwriting and compliance costs for lenders, and the resulting data can be leveraged to improve further their risk measurement and management. Such a reliance on hard information also makes underwriting transparent to third parties and hence facilitates secondary markets for retail loans through securitization, which allows nonbank firms that lack deposit funding to compete via capital market financing. 

Given the growing importance of technology to financial services, it is perhaps not too surprising that the latest trend has been for technology-based firms to offer financial services, a development that is often called “fintech”. Many fintech firms combine automated analysis of retail customers with more user-friendly interfaces to provide services that are more convenient, and sometimes lower cost, to consumers. For example, “marketplace lending” platforms have emerged as a new organizational form that attracts borrowers with a simplified loan application process, leverages credit scoring tools to analyze these applications, and then matches creditworthy borrowers directly to investors. Furthermore, in some jurisdictions, machine learning (artificial intelligence) is now being leveraged to further improve retail loan risk measurement. 

Another set of recent technological developments are being touted as having the potential to have an even more fundamental impact on the financial system, potentially eliminating the need for trusted third parties such as banks. Whether and to what extent blockchains and cryptocurrencies will disrupt the existing financial system remains to be seen, as the technology is too new and immature to draw firm conclusions. However, the potential benefits of cryptocurrencies and blockchain technology are sufficient to attract considerable interest from tech-knowledgeable individuals, large financial organizations, and even major governments. 

This chapter surveys the research literatures pertaining to several specific financial innovations that have appeared in recent decades that were specifically driven by technological change. Particular attention is paid to innovations that may provide insights into the prospects for certain widely discussed fintech applications. To set the stage, we begin by providing some additional clarity about what is meant by financial innovation.

One of the more interesting discussions, for instance in relation to Australia's emerging Consumer Data Right regime (eg noted here), is

Marketplace lenders, which match consumers and small firms with lenders/investors using online platforms, have been popping-up all over the world. In the United States, these lending arrangements generally work in the following way: First, borrowers apply on the platform and are subject to automated underwriting based on standard criteria (such as a credit score) plus additional information and assigned a proprietary risk rating. Second, institutional investors purchase loans in bulk from the marketplace lenders, principally based on the risk ratings. The online marketplaces themselves generally have no direct exposure to the credit risk of the loans through their platforms, as they do not typically hold the loans or otherwise retain an interest in them or guarantee their performance. Instead, marketplace lenders principally generate revenue from loan origination and servicing fees. Marketplace lending is growing rapidly, but it remains a very small part of the $3.3 trillion U.S. consumer lending market. 

Much of what constitutes marketplace lending is actually not new. As discussed above, for many years, larger banks and finance companies have used credit registry data, credit scores, and borrower income information as inputs for statistical models to estimate risk and price consumer loans. However, marketplace lenders appear to be increasingly supplementing their models with additional information. Jagtiani and Lemieux (2018) find that LendingClub’s credit scores had an 80 percent correlation with FICO scores in 2007, but that the correlation drops about 35 percent for loans originated in 2014-15. The authors suggest that the change is likely due to a combination of LendingClub using alternative data and machine learning as the platform gains more experience with consumer lending. In complementary research that uses information from Prosper (which is a prominent marketplace lender), Balyuk and Davydenko (2018) discuss that lender’s use of secondary screening to identify suspicious applications and to verify automatically some borrower-provided information. The authors report that this additional screening has led to cancellation of 27 percent of the previously accepted loan applications since 2013. 

Vallee and Zeng (2018) observe that, while the fintech platforms are using their own models to grade loans and determine credit spreads, informationally sophisticated investors may be able to differentiate credit quality within these ratings grades. The authors derive a model allowing for such a split in investor sophistication, which results in a trade-off for the platform in terms of the contribution of sophisticated investors in improving loan quality but also creating adverse selection for less sophisticated investors. The volume-maximizing solution for the platform is to provide intermediate levels of screening and information to investors. Consistent with their model, the authors find that loans purchased by more informationally sophisticated investors were less likely to default for the universe of investments made through Lending Robot from 2014-2017. They also observe that one marketplace lender, LendingClub, reduced the amount of information it provided to investors and this caused a reduction in the ability of sophisticated investors to “cherry-pick” loans with lower default rates. 

Beyond marketplace lenders specifically, there has been a general increase in online lending. According to Fuster, Plosser, Schnabl, and Vickery (2018), fintech mortgage lenders have increased their market share from two to eight percent between 2010 and 2016. The authors find the biggest benefit provided by fintech lenders is an average reduction in the time from application to closing of 10 days (20 percent) after controlling for borrower and loan characteristics. They also find that fintech lenders can scale up the volume of mortgages they process more readily than can other lenders. 

The information technology underlying such an automated approach to underwriting is subject to significant scale economies (large fixed costs and very low marginal costs), which provides strong incentives to grow large quickly. This suggests that the consolidation of the marketplace lending industry is very likely. Moreover, as marketplace lenders become more successful, they are likely to find themselves facing increased competition from incumbent consumer lenders.

The paper complements the ACFS International competition policy and regulation of financial services report noted here.

Estates

In Royal Botanic Gardens and Domain Trust v The Attorney General of New South Wales [2018] NSWSC 1666 the NSW Supreme Court has consider a charitable endowment of interest to equity students.

The judgment states

The public gardens of Sydney are among the glories of our city. They are oases of recreation and research. Their staff are dedicated and skilled.

The Court has no doubt that the late Lorna May Backhouse (“Mrs Backhouse”) shared those sentiments. Her home was on the Old Bells Line of Road at Mount Tomah, not far from the Blue Mountains Botanic Garden at Mt Tomah (the “Mt Tomah Garden”), where she was a regular volunteer.

Mrs Backhouse died on 31 May 2010. By her will dated 4 January 1996, she left part of the residue of her estate to the plaintiff, Royal Botanic Gardens and Domain Trust (“RBGDT”), on trust to establish “The Lorna and Clive Backhouse of Mt Tomah Scholarship” to be awarded every two years to a member of staff at the Mt Tomah Garden (the “Scholarship Trust”). RBGDT received just over $1.1 million from Mrs Backhouse’s estate to form the corpus of the Scholarship Trust. With accumulated interest income, the current value of the Scholarship fund is approximately $1.3 million.

These proceedings were brought by RBGDT because it wishes to be able to award the scholarship annually and to more than one person in any year.

RBGDT and the defendant, the Attorney General of New South Wales, have agreed that, subject to the consent of the Court, an administrative scheme be ordered to give effect to RBGDT’s intention (the “Scheme”). Although the parties have agreed on the orders to be made, the administration of charitable trusts is a matter of public interest and it remains a matter for the Court to determine whether the orders should be made. These are the reasons why the Court is satisfied that the Scheme should be ordered. The Scheme is set out at the conclusion of these reasons as part of the orders of the Court. ...

RBGDT originally pressed for a cy-près scheme. Ultimately, the parties came to the view that there was real doubt whether it could be said that the Scholarship Trust could no longer be performed or that it had become impracticable. It followed that it was not clear whether there was a basis for the Court to order a cy-près scheme, either under its general jurisdiction or pursuant to s 9 of the Act. The parties’ concerns were well founded. However, because it is not necessary for me to decide, I do not express any view on whether a cy-près scheme could have been ordered.

The judgment goes on -

An affidavit sworn by the director of Horticultural Management for RBGDT succinctly stated the reasons for these proceedings:

“Number of scholarships 

29 The Backhouse Scholarship can only be awarded once every two years. 

30 There are a limited number of staff at Mount Tomah Garden. They have professional commitments at the Mount Tomah Garden. They also have personal commitments. It is challenging for staff to be away from the Mount Tomah Garden for an extended period of time. 

31 Therefore, a study trip is usually limited to one or two months. The cost of such a study trip is approximately $15,000.00 to $20,000.00. 

32 The annual income from the Scholarship Fund would easily be able to finance more than one scholarship every two years. 

33 If the Backhouse Scholarship could be awarded more often, more members of the staff would have an opportunity to use the Scholarship Fund, which would advance the knowledge in horticulture and/or plant physiology of more members of the staff. Cannot be used for group projects 

34 The terms of the Backhouse Scholarship restrict the scholarship to one member of the staff. 

35 A horticultural study trip usually involves a number of administrative and practical tasks such as collecting and collating seeds, plant specimens and other organic material, as well as other information. It is more practical if a number of persons travel together, rather than one individual. 

36 In addition, the Mount Tomah Garden may be able to negotiate better access to host botanic garden staff, leading horticulturalists and other leading practitioners if there are a number of members of staff involved rather than one individual. 

37 It would advance the knowledge in horticulture and/or physiology of plants of Mount Tomah Garden if the Scholarship Fund could be used to pay for a number of staff rather than one member of staff.”

The Scheme is a textbook example of maintaining the ends or purpose of Mrs Backhouse’s generous gift, but altering the means. Without intending by this observation to establish a legal test of general application, the Court has no hesitation in approving the Scheme because it has no doubt that if Mrs Backhouse’s views were able to be sought, she would express her satisfaction that her gift was to be used for the benefit of more people and more often to undertake the activities she wished to support. Approval of the Scheme will permit annual awards to be made and, if appropriate, to more than one person in any year.

There are only two matters concerning the orders the Court will make which require special mention.

First, it will be seen that the Scheme makes provision for the accumulation of income.

The Scheme originally presented for the Court’s consideration permitted RGBDT to mix the Corpus and the unspent income for the purposes of investment. However, it maintained the requirement for the Scholarship to be paid only from income. During the hearing I raised with the parties my concern that this approach might lead to administrative and accounting complications in keeping track of how the investment returns were to be treated from a mixed investment. Given further time to consider the matter, the parties have now adopted a different solution which, in my view, is a simpler one (see Clause 7(e) of the Scheme).

In my respectful view, there is a real public interest in ensuring that the administration of trusts such as those in relation to scholarships should be as straightforward as possible. Apart from the inherent advantage of ease of administration, it is also likely to ensure that the costs of administering such a gift are minimised. Simplifying such matters has at least two benefits. First, it may encourage other potential donors to make such gifts in the knowledge that as much as possible will be expended on the intended purpose rather than the administration of a gift. Second, it will also encourage organisations to be prepared to take such gifts. In many cases, such gifts are made to organisations which themselves are charities and whose administrative resources may be limited. The approach which the parties have now adopted in this case will be administratively simpler but still ensure that the Corpus is maintained.

Second, the orders include an order for the costs of the parties, including the Attorney General, to be paid out of the Scholarship Trust. Those costs will be payable as expenses or liabilities of the Scholarship Trust. In making the costs order proposed by the parties, the Court is satisfied that the Attorney General’s role in these proceedings was helpful, the Scholarship Trust itself is substantial, and the reason for the application arose from the consequences of the terms of the gift as provided by Mrs Backhouse. The Court is satisfied those circumstances make it appropriate for the Attorney General to receive his costs on the indemnity basis. In reaching this conclusion, I respectfully adopt and apply the decision of Leeming JA (sitting as a judge of this division) in Perpetual Trustee Ltd v Attorney General of NSW (Will of Hon G Nesbitt) [2018] NSWSC 1456 at [129]–[135].

Sousveillance

'Environmental Sousveillance, Citizen Science and Smart Grids' by Bruce Baer Arnold in Matthew Rimmer (ed) Intellectual Property and Clean Energy (Springer, 2018) 375-398 comments

 Enhancing water, energy, transport and communication infrastructure through a distributed or centralised sentience—‘smart grids’—involves questions about power. Those questions are as much about data, knowledge and environmental activism as they are about technical protocols for internet refrigerators, congestion pricing of road networks and remote reading of domestic electricity meters. This chapter explores who gets to collect, access and use data from smart grids. It highlights emerging debate about privacy, including systemic surveillance by grid operators/partners, and security. It discusses scope for environmental mashups that inform public policymaking and environmental activism but conflict with legal frameworks for the ownership of data and quarantining of knowledge. It looks ahead to ask whether citizens can establish participatory environmental monitoring networks that are independent of grids operated by network providers such as power and water utilities.

Environment and Integrity Commission

'Clean Energy Justice: Charting an Emerging Agenda' by Shelley Welton and Joel B. Eisen in Harvard Environmental Law Review (Forthcoming) comments

The rapid transition to clean energy is fraught with potential inequities. As clean energy policies ramp up in scale and ambition, they confront challenging new questions: Who should pay for the transition? Who should live next to the industrial-scale wind and solar farms these policies promote? Will the new “green” economy be a fairer one, with more widespread opportunity, than the fossil fuel economy it is replacing? Who gets to decide what kinds of resources power our decarbonized world? In this article, we assert that it is useful to understand these challenges collectively, as part of an emerging agenda of “clean energy justice.” Mapping this agenda highlights the equity challenges that will attend the transition to clean energy, and allows for more comprehensive, creative approaches to legal and policy solutions. 

A cleaner energy economy does not ineluctably translate into a more just economy. We identify four considerations that will be critical to ensure that clean energy does not entrench widening inequalities in wealth and power: (1) how to fund the transition; (2) who benefits from the upsides of the new clean energy economy, including green jobs and new technologies like rooftop solar panels; (3) who participates in decisions about the shape of the new clean energy economy; and (4) how and where new clean energy infrastructure is sited. Drawing from available data, we describe why there are real risks that the gains of clean energy might be unequally distributed, while the costs fall on rural communities and non-adopters of new technologies, thus exacerbating inequality while greening the grid. And through original empirical research, we highlight the challenges of full and equal participation in the esoteric, technocratic procedures of energy law. 

The present moment is a critical one for bringing these diverse considerations together into this overarching agenda. The U.S. energy system is in the early days of a long transition away from fossil fuels towards clean energy. It is time for energy lawmakers and energy law scholars to better anticipate the distributive and procedural justice concerns that will attend this transition, and to forge new ways to address them.

''Sacrifice Zones' in the Green Energy Economy: Toward an Environmental Justice Framework' by Dayna Nadine Scott and Adrian Smith in (2018) 62(3) McGill Law Journal 861 comments

 The environmental justice movement validates the grassroots struggles of residents of places which Steve Lerner refers to as “sacrifice zones”: low-income and racialized communities shouldering more than their fair share of environmental harms related to pollution, contamination, toxic waste, and heavy industry. On this account, disparities in wealth and power, often inscribed and re-inscribed through social processes of racialization, are understood to produce disparities in environmental burdens. Here, we attempt to understand how these dynamics are shifting in the green energy economy under settler colonial capitalism. We consider the possibility that the political economy of green energy contains its own sacrifice zones. Drawing on preliminary empirical research undertaken in southwestern Ontario in 2015, we document local resistance to renewable energy projects. Residents mounted campaigns against wind turbines based on suspected health effects and against solar farms based on arable land and food justice concerns, and in both cases, grounded their resistance in a generalized claim, which might be termed a “right to landscape”. We conclude that this resistance, contrary to typical framings which dismiss it as NIMBYism, has resonances with broader claims about environmental justice and may signal larger structural shifts worth devoting scholarly attention to. In the end, however, we do not wholly accept the sacrifice zone characterization of this resistance either, as our analysis reveals it to be far more complex and ambiguous than such a framing allows. But we maintain that taking this resistance seriously, rather than treating it as merely obstructionist to a transition away from fossil capitalism, reveals a counter-hegemonic potential at its core. There are seeds in this resistance with the power to push back on the deepening of capitalist relations.

The ACT Legislative Assembly - vaguely aware, it seems, of disquiet about land deals in the Territory - has released the report of the Select Committee on Independent Integrity Commission.

The recommendations of that committee are

R 1 2.7 The Committee recommends that the ACT Government table a bill based on the Integrity Commission Bill 2018 Exposure Draft, incorporating amendments recommended in this report, and that the Assembly debate that bill. 

R2 2.8 The Committee recommends that the Assembly not proceed with the Anti-corruption and Integrity Commission Bill 2018. 

R3 2.11 The Committee recommends the following process could enable the passage of the legislation within the current sitting pattern:

The ACT Government respond to this report by instructing the Parliamentary Counsel Office to amend the Exposure Draft to give effect to any recommendations in this report with which the ACT Government agrees, creating a draft bill. 

The ACT Government further instruct the Parliamentary Counsel Office to prepare, but not incorporate into the draft bill, draft amendments to give effect to any recommendations in this report with which the ACT Government does not agree. 

Both the draft bill and draft amendments be made available to all members, and the legal adviser of the Standing Committee on Justice and Community Safety (Legislative Scrutiny role), by close of business 16 November 2018. 

During the week beginning 19 November 2018 members representing each party, their advisers, parliamentary drafters and any other officials that may be of assistance meet to discuss and refine the draft bill. 

On 27 November 2018 the Government table a draft bill, incorporating any amendments agreed during meetings the proceeding week. 

The Assembly suspend Standing Orders in order to debate the bill during that week. 

R4 2.16 The Committee recommends that commencement of the legislation be staggered to allow for the appointment of a Commissioner and Commission prior to the receipt of complaints. 

R5 2.17 The Committee recommends that s2(2) of the Exposure Draft be reviewed to confirm whether delayed commencement provisions should be linked to s6. 

R6 2.20 The Committee recommends that all definitions be included in the legislation, not defined in regulation. 

R7 3.8 The Committee recommends that the criteria for eligibility for Commissioner and Inspector allow for the appointment to the role of a former judge, as listed in s26(1) of the Exposure Draft, or an Australian legal practitioner of not less than 10 years standing. 

R8 3.9 The majority of the Committee recommends that the criteria for eligibility for Commissioner prohibit the appointment of a former member of the Legislative Assembly to the role. 

R9 3.12 The Committee recommends that the terms of appointment for a Commissioner and CEO of the Commission be of different lengths to ensure continuity of operations. 

R10 3.15 The Committee recommends that the provisions relating to the Commissioner’s conflicts of interest in s29 of the Exposure Draft be reviewed to consider improved drafting, including drawing on s102 of the Bill. 

R11 3.20 The Committee recommends that the maximum term of appointment of an acting Commissioner be defined in the legislation as six months and that any reappointment to a further six month term be subject to consultation with the relevant Assembly committee. 

R12 3.21 The Committee recommends that the legislation be amended to include the explanatory note to s97 of the Bill regarding acting appointments. 

R11 3.24 The Committee recommends that bankruptcy and insolvency be grounds to suspend a Commissioner. 

R14 3.27 The Committee recommends that the ACT Government consider whether failure by the Commissioner to disclose conflict of interest matters would be considered “misbehaviour” under s33 of the Exposure Draft, as that term is generally understood, or whether the more specific provisions on this matter in s105 of the Bill should be adopted. 

R12 3.30 The Committee recommends that the ACT Government consider the question of how a CEO of the Commission could be suspended and, if necessary, insert suspension provisions in the legislation. 

R13 3.37 The majority of the Committee recommends that the legislation require that staff of the Commission not have been an ACT public servant in the last 5 years. 

R14 3.38 The Committee recommends that the legislation require the Commission to develop and publish guidelines for personal interest disclosures requested under s48 of the Exposure Draft. 

R15 3.41 The Committee recommends that the legislation authorise the Speaker to seek administrative support and advice in discharging the Speaker’s statutory role under the legislation, in a similar way as s37B of the Auditor-General’s Act 1996 and s37A of the Ombudsman Act 1989. 

R16 3.42 The Committee recommends that the Standing Committee on Administration and Procedure examine the level and manner of support to the Speaker in performing her statutory roles under Officer of the Assembly legislation. 

R17 4.11 The Committee recommends that the legislation be examined to ensure that it incorporates the full extent of the NSW definition of corrupt conduct, as reflected in the Bill, but maintain the focus on “serious corrupt conduct” and “systemic corrupt conduct”. 

R18 4.15 The Committee recommends that the ACT Government consider whether the legislation should explicitly state that the Commission has no jurisdiction prior to 1989. 

R19 4.25 The Committee recommends that the legislation be amended to make previous investigation by another body a consideration in the Commissioner’s determination if an investigation is in the public interest and not a bar to investigation by the Commission. 

R20 4.28 The Committee recommends that the ACT Government consider whether the definition of public authority in the legislation should be amended to cover persons that do not have a contractual relationship with government but are licenced by government to provide certain services. 

R21 4.37 The majority of the Committee recommends that the definition of public official include members of the judiciary and judicial officers. 

R22 4.51 The Committee recommends that the legislation be amended so that Senior Executive Service officers are included in mandatory corruption notification provisions in s60 of the Exposure Draft. 

R23 4.52 The Committee recommends that provisions on mandatory corruption notifications be amended to make it clear that the following individuals are not subject to those provisions in performance of their duties but are subject to those provisions regarding possible serious or systemic corrupt conduct within their own organisations:  The Auditor-General;  The Ombudsman;  The Electoral Commissioner;  The Human Rights Commissioner; and  The Clerk of the Legislative Assembly. 

R24 4.53 The Committee recommends that the Speaker not be exempt from mandatory corruption notification provisions. 

R25 4.54 The Committee recommends that provisions on mandatory corruption notifications be amended to remove reference to a member of staff of an MLA. 

R26 4.60 The Committee recommends that the legislation include an offence of failing to make a mandatory corruption notification 

R27 4.61 The Committee recommends that the Commission provide comprehensive training and education material to anyone subject to mandatory corruption notification requirements. 

R28 4.68 The Committee recommends that s56(1) of the Exposure Draft be redrafted by removing “and” between the items on the list of ways in which a corruption complaint may be made. 

R29 4.73 The Committee recommends that the legislation be amended so that a complainant loses their absolute privilege from defamation should they publicly disclose the contents of a complaint prior to the Commission making it public. 

R30 4.79 The Committee recommends that the Standing Committee on Administration and Procedure develop amendments to continuing resolution 5AA to permit the Legislative Assembly Commissioner for Standards to refer matters to the Commission and to receive and act on referrals from the Commission. 

R31 4.80 The Committee recommends that the legislation be amended by deleting s57(4)(d) to remove the Legislative Assembly Commissioner for Standards from the list. 

R32 4.81 The Committee recommends that the legislation be amended by adding the Legislative Assembly Commissioner for Standards, the Speaker and Deputy Speaker to the list of entities in s104(2) from which the Commissioner may not ask for written reports 

R33 4.84 The Committee recommends that the legislation be reviewed to ensure that s103(1)(a) of the Exposure Draft, which prevents the Commission from referring a corruption report that it does not have the power to investigate, does not obstruct effective cooperation between integrity bodies. 

R34 5.6 The Committee recommends that the legislation state that where a matter of parliamentary privilege arises in the course of the exercise of the Commission’s powers, it shall be dealt with by the Assembly. 

R35 5.7 The Committee recommends that the ACT Government obtain and publish a legal analysis on the impact s270(a)(iv) of the Exposure Draft, and similar provisions in the Public Interest Disclosure Act 2012, has on the Assembly’s rights as regards s24(3) of the Australian Capital Territory (Self Government) Act 1988. 

R36 5.10 The Committee recommends that the ACT Government explore whether specific provision needs to be made in the legislation to permit the Commissioner to make use of Members’ declarations of interest. 

R37 5.16 The Committee recommends that the Standing Committee on Administration and Procedure consider the arrangements necessary for an independent process to advise on claims of parliamentary privilege that arise during Commission investigations and present a proposal to the Assembly. 

R38 6.15 The Committee recommends that the legislation require the Commissioner to issue guidelines about the Commission’s policies and procedures, and that the ACT Government consider whether the guidelines should be a notifiable instrument. 

R39 6.20 The majority of the Committee recommends that the legislation prohibit the use of summons in preliminary inquiries. 

40 6.27 The Committee recommends that the ACT Government re-examine the timeframes in the legislation under which persons arrested under an arrest warrant must be bought before the Commission to ensure consistency with the language and timeframes used in other relevant pieces of ACT legislation. 

41 6.28 The Committee recommends that s156(3)(e) of the Exposure Draft be redrafted by deleting the phrase “if the magistrate has contacted the person” and making s156(3)(e)(i) and s156(3)(e)(ii) into s156(3)(f) and s156(3)(g) respectively. 

42 6.36 The Committee recommends that s186 of the Exposure Draft be amended to give the Commission the discretion to withhold a proposed investigation report from a relevant entity if there are reasonable grounds to believe that the sharing of the proposed investigation report could prejudice a prosecutorial or serious disciplinary action. 

43 6.49 The Committee recommends that the legislation be amended to include a general offence of obstructing the Commissioner, Inspector, their staff and witnesses, similar to Part 9 of New South Wales Independent Commission Against Corruption Act 1988. 

44 7.5 The Committee recommends that the ACT Government amend the Exposure Draft to contain a clear statement of the Inspector’s powers in a similar manner as s57 of New South Wales’ Independent Commission Against Corruption Act 1988. 

45 7.8 The Committee recommends that the ACT Government remove any provisions from the legislation that require automatic reporting of the Commission’s use of its powers to the Inspector, including sections 79, 87, 139, 144, 155, 158, 166 and 192. 

R46 7.13 The Committee recommends that the legislation omit reference to any requirement that inspectorate staff be employed by the Territory or under Territory law to enable a Commonwealth agency to be appointed as Inspector if so chosen. 

R47 7.14 The Committee recommends that the legislation be amended so that any exercise by the Speaker of the power under s236(2) to make arrangements for another person to exercise the functions of the Inspector be subject to the consultation and Assembly resolution requirements of s222(2)(a) and s222(3)(b). 

R48 7.17 The Committee recommends that the legislation be amended by deleting s260 of the Exposure Draft, removing the power of the Inspector to recommend that an acting Commissioner be appointed. 

R49 7.20 The Committee recommends that the Commissioner be required to maintain a register of conflicts of interest and any steps taken to manage them within the Commission and that the register be available to the Inspector. 

R50 7.21 The Committee recommends that the Inspector report to the relevant Assembly committee on the extent to which the Commission is managing conflicts of interest. 

R51 7.25 The Committee recommends that the Assembly establish a dedicated committee with oversight of the Commission. 

R52 7.26 The Committee recommends that the legislation be amended to replace references to the “presiding member of the relevant Assembly committee” with “the relevant Assembly committee”. 

R53 8.5 The Committee recommends that the legislation be amended to remove reference in s23(1)(f) to the Commission providing leadership to the Legislative Assembly. 

R54 8.15 The Committee recommends that the ACT Government establish a comprehensive review of the Public Interest Disclosure Act 2012 as soon as is possible with the aim of having changes implemented by 2020.

Employee Surveillance

'Employee Surveillance: The Road to Surveillance is Paved with Good Intentions' by Lilian Edwards, Laura Martin and Tristan Henderson comments

Employee surveillance was for some while the Cinderella sister of surveillance studies: neither as outright shocking to citizens as state surveillance in the post Snowden era, nor as ubiquitously discussed as consumer targeting and profiling in the “surveillance capitalism” ecology of social media, search and e-commerce platforms like Google, Facebook, Amazon et al. Yet employee surveillance is increasingly universal, both at hiring stages and after work has commenced, and often dominates selection, promotion and firing. Much publicity has particularly recently surrounded surveillance in the “gig economy”. Employee surveillance has become a perfect storm of convergence of established technologies, such as CCTV and email and Web interception, with more recent developments such as tracking via connected devices (cars, wearables, phones et al) and algorithmic profiling and prediction. We (a) propose a novel five-stage model of employee surveillance and then (b) present a fortuitous case study which demonstrates how technologies introduced into the workplace for beneficial reasons may morph via function creep into privacy invasive tools of surveillance. The recent academic (UCU) strike action in the UK threw up a highly combative environment where some universities are attempting to “strike break” by replacing, without new permission or consent, striking academics with recordings of their lectures made in previous years, usually for laudable motivations such as widening access and allowing students to revise. On examination, this practice of mandated lecture capture, unchallenged when used to help students but now under examination when its use is transformed, is often of dubious legality, both with reference to copyright and data protection, as well as overarching privacy rights and the relationship of trust and confidence between employee and employer. Furthermore, evidence is emerging that some universities are without publicity using lecture capture as a surveillance mechanism to grade or intimidate academics, or as a means to covertly replace them entirely. Serendipitously a recent ECtHR case, Antovic and Mirkovic v Montenegro (Application no. 70838/13) (28 November 2017) provides some ammunition with which to dispute these transformative and unsettling re-uses of recorded lectures. Finally, we consider the negative consequences of such non-permissioned re-use, which includes not just breach of trust to academics and depreciation of the employment relationship, but withdrawal from positive uses of surveillance techniques such as widening participation and enabling access.

Antovic was noted here.

Elder Abuse

The 2017 Australian Law Reform Commission report on elder abuse quoted Dr Wendy Bonython and myself. It is reassuring that insights and concerns articulated in that report are being rtecognised elsewhere, with this week's NSW Ombudsman's report on Abuse and neglect of vulnerable adults in NSW – the need for action commenting

In July 2016, the Ombudsman’s office commenced a standing inquiry under section 11(1)(e) of the Community Services (Complaints, Reviews and Monitoring) Act 1993 to examine and respond to allegations of abuse and neglect of adults with disability in community settings, such as the family home. 

We started the inquiry:

• in recognition of the seriousness of the increasing number of matters that were being reported to us that raised concerns about the safety and welfare of adults with disability in the community, and 

• in the absence of any other agency with the powers to investigate allegations that do not reach a criminal threshold or that otherwise require a coordinated interagency response. 

The standing inquiry 

Between August 2015 and October 2018, we received 358 contacts relating to the alleged abuse and neglect of adults with disability living in community settings. Most (206) of the matters involved reports of alleged abuse and neglect that required action as part of the standing inquiry. 

The 206 reports do not relate to the conduct of service providers – they are about the conduct of the person’s family and other informal supports, and members of the community. 

Source of reports 

We have an agreement with the National Disability Abuse and Neglect Hotline that it will refer matters to us that involve allegations of abuse and neglect of adults with disability in community settings in NSW. Of the 206 matters, 55 (27%) have been referred to us by the Hotline. The majority (143) of the other matters have been directly reported to us by external agencies or individuals. 

The primary source of reports (whether via the Hotline or directly to our office) has been nongovernment disability providers, who have accounted for almost half (91) of all reports. Other main reporters include family members (34), NSW government or funded agencies (24), and community members (20). 

The people involved 

Alleged victims 

Over half (110) of the matters reported to us in the standing inquiry have involved allegations of abuse or neglect of an adult with intellectual disability. More broadly, most reports have involved a person with some form of cognitive impairment. 

However, there has been a range of matters in which the person has not had a cognitive impairment – including 11 matters that involved a person with a solely physical disability. 

Subjects of allegation 

Most of the subjects of allegation have had a close and personal relationship with the adult with disability – with most of the alleged abuse and neglect committed by their family members or their partner/spouse. 

Over two-thirds (141) of the reports have been about the conduct of family members – mainly parents (99) and siblings (31). The adult with disability’s partner/spouse has been the subject of allegation in 17% of matters (35). A smaller number of reports have involved community members (10) and ex-support staff of the adult with disability (4). 

The reported allegations 

Most of the reports have involved more than one type of abuse and/or neglect – most commonly neglect (78) and physical abuse (77). Allegations of ill-treatment featured in 56 reports, and one-quarter of reports involved alleged financial abuse of the adult with disability (52). Over 10% of reports included allegations of sexual abuse (24). 

Our actions under the standing inquiry 

Our actions in response to the reports typically involve undertaking inquiries with agencies that are currently, or have recently been, involved with the alleged victim; checking available intelligence on relevant parties (including police and child protection databases); bringing agencies together to facilitate the exchange of relevant information, discuss the existing risks, and agree on necessary actions; and monitoring the implementation of the agreed actions. 

The standing inquiry has enabled our office to test, in a very practical sense, what needs to be done to provide an effective interagency response to these matters. Our handling of the 206 reports has highlighted that providing an effective interagency response can be relatively straightforward – provided that the agency taking the lead role has access to the right information, adequate powers, and the cooperation and support of key government and non-government stakeholders. 

However, the Ombudsman’s standing inquiry is a temporary measure, and will cease on 1 July 2019. In addition, there are critical gaps that are not addressed by the standing inquiry. In particular, we do not have the power to enter private residences to gain direct access to the alleged victim, and we are not competent or compellable to provide information to NCAT. The standing inquiry also does not encompass elder abuse. 

The need for an effective safeguarding approach for vulnerable adults 

In the context of the persuasive evidence provided by our standing inquiry, and the findings and recommendations from NSW and national inquiries into elder abuse, there is an urgent need for an effective, integrated framework and independent lead agency for responding to the abuse and neglect of all vulnerable adults in community settings in NSW. 

We strongly support the recommendations of the NSW Law Reform Commission from its review of the Guardianship Act 1987, relating to the establishment of an independent statutory position of a Public Advocate to (among other things) investigate – of its own motion or in response to a complaint – cases of potential abuse and neglect of people who need decisionmaking assistance, with powers to:

• apply for and execute a search warrant if needed 

• intervene in court or NCAT proceedings in certain cases 

• require people and organisations to provide documents, answer questions, and attend compulsory conferences 

• refer allegations to equivalent agencies in other jurisdictions 

• exchange information with relevant bodies 

• have read-only access to the police and child protection databases.

Our standing inquiry has highlighted some significant issues that should inform the development of a comprehensive safeguarding approach for vulnerable adults in NSW, and the work of the independent lead agency. In particular:

•  There is a need for concerted guidance, service improvement, and capacity development with providers, agencies and the community in relation to the abuse and neglect of vulnerable adults in community settings – to ensure that matters are reported, and appropriate action is taken. 

• There are significant opportunities to assist the work of police, through coordinating actions to assess and address the circumstances of the vulnerable adult, and providing a point of referral for police for guidance and support on specific matters. There is also a need to enhance police expertise in interviewing people with disability who have communication support needs and cognitive disability, to maximise their ability to give evidence and gain effective access to justice. 

• All efforts should be taken to maximise the involvement of the vulnerable adult in the response that is provided to the alleged abuse and neglect – including through the provision of appropriate decision-making supports. 

• There is a need for provisions for agencies that have responsibilities relating to the safety of vulnerable adults to be able to exchange information that promotes the safety of vulnerable adults – these agencies need to be able to share critical information with each other, and not have to rely on the Public Advocate to facilitate the exchange of information. 

What is needed 

From 1 July 2019, the NSW Ombudsman’s office will no longer carry out its standing inquiry into the abuse and neglect of adults with disability in the community. Without an alternative option in place, this gap will present unacceptable risks to an already vulnerable and marginalised cohort of our community. There is a need for swift action to establish a comprehensive adult safeguarding approach that will both fill the looming gap in relation to adults with disability, and address the longstanding gap in relation to vulnerable older persons. 

The recommendations of the NSW Law Reform Commission in relation to the establishment of an independent Public Advocate with investigative functions provide a timely and constructive way forward. However, there are a small number of supplementary steps that are required to provide an effective, integrated and person-centred approach to responding to the abuse and neglect of vulnerable adults in NSW – including information sharing provisions for relevant agencies, and enhanced options for decision-making assistance. 

More broadly, the NSW Ombudsman’s office would hope that this report acts as a trigger to the NSW Government to commit to a broad review, focused on establishing in NSW the strongest independent safeguarding and regulatory system in Australia for protecting vulnerable groups in our community.

The Ombudsman's recommendations are -

 It is recommended that the NSW Government should: 

1. Implement the recommendations of the NSW Law Reform Commission in relation to the establishment of an independent statutory body to investigate and take appropriate action in relation to the suspected abuse and neglect of vulnerable adults in NSW, as outlined in its report on the Review of the Guardianship Act 1987. 

2. As part of the establishment of the independent statutory body, and to support the development and implementation of an effective and integrated safeguarding approach for vulnerable adults in NSW:

a. Introduce legislative provisions to enable agencies that have responsibilities relating to the safety of vulnerable adults to be able to exchange information that promotes the safety of vulnerable adults. 

b. Ensure that there are enhanced options for vulnerable adults to gain appropriate decision-making assistance. The recommendations of the NSW Law Reform Commission in relation to supported decision-making should be considered as part of this response. 

3. Review the independent safeguarding and regulatory arrangements in NSW to identify opportunities to strengthen the system for protecting vulnerable groups in our community, with a view to considering the potential benefit of creating a single independent community services oversight body.