Enforcers

'The New Gatekeepers: Private Firms as Public Enforcers' by Rory Van Loo in Virginia Law Review (Forthcoming) comments

 The world’s largest businesses must routinely police other businesses. By public mandate, Facebook reviews app developers’ privacy safeguards, Citibank audits call centers for deceptive sales practices, and Exxon reviews offshore oil platforms’ environmental standards. Scholars have devoted significant attention to how policy makers deploy other private enforcers, such as certification bodies, accountants, lawyers, and other periphery “gatekeepers.” However, the literature has yet to explore the emerging regulatory conscription of large firms at the center of the economy. 

This Article examines the rise of the enforcer-firm through case studies of the industries that are home to the most valuable companies: technology, banking, oil, and pharmaceuticals. Over the past two decades, administrative agencies have used legal rules, guidance documents, and court orders to mandate that private firms in these and other industries perform the duties of a public regulator. More specifically, firms must write rules in their contracts that reserve the right to inspect third parties. When they find violations, they must pressure or punish the wrongdoer. 

This new form of governance has important intellectual and policy implications. It imposes more of a public duty on private firms and gives resource-strapped regulators promising tools. If designed poorly, however, the enforcer-firm will create an expansive area of unaccountable authority. Any comprehensive account of the firm or regulation must give a prominent role to the administrative state’s newest gatekeepers.

In discussing the FDA and 'Big Pharma'  Van Loo states

Pharmaceutical companies manufacture drugs but contract with other companies for “processing, packaging, holding, or testing.” The FDA has the most explicit third-party monitoring expectations of the four case studies. Rulemaking, guidance statements, and warning letters have communicated its policy. 

One FDA rule states that in every pharmaceutical company there “shall be a quality control unit . . . responsible for approving or rejecting drug products manufactured, processed, packed, or held under contract by another company.”  Monitoring the output is not, however, enough. The company must also directly monitor inputs used by the contractor, including ingredients and materials. After specifying the contractor’s internal compliance systems, the manufacturer should conduct audits.  Thus, the pharmaceutical company must oversee contractors’ organizational processes, inputs and outputs.  

The FDA places responsibility for third-party activities at the top of the regulated entity. In its formal rules on liability for tainted products, the agency states that it “regards extramural facilities as an extension of the manufacturer’s own facility.”  It reiterated this point in its post-inspection warning letters.  In other words, the pharmaceutical company is responsible for the third-party contractor’s activities as if they were one company. In guidance documents, the agency clarified that it was addressing “the relationship between owners and contract facilities". 

Contractual arrangements cannot shield pharmaceutical companies from liability. In one warning letter, the FDA told Pfizer, the largest pharmaceutical company in the world, "You are responsible for combination products you produce as a contract facility, regardless of agreements in place with [your customer] or with any of your suppliers". 

The FDA does not, however, rely solely on Pfizer to regulate the company’s independent contractors. The FDA still routinely inspects and brings enforcement actions directly against those third parties. For instance, in one warning letter to an independent manufacturer, the FDA wrote, “You and your customer, Pfizer, have a quality agreement regarding the manufacture of drug products. You are responsible for the quality of drugs you produce as a contract facility, regardless of agreements in place . . . .” 

Pfizer implemented the FDA’s organizational advice into its internal processes. It routinely monitors suppliers through audits, inspections, and review of systems. Supplier agreements reflect these review procedures, and when Pfizer recognises a violation it can de-list the offender from its list of "qualified" suppliers or it can report the violation to the FDA.

Responding to the Thodey Review

It's the end of the year, with people concentrating on Christmas shopping and climate disasters rather than on official accountability and fibbing by politicians regarding their achievements or plans to engage in substantive performance improvement.

In that spirit the national Governmentent has released Delivering for Australians: Government response to recommendations of the Independent Review of the APS, wrapping up the Thodey Review of public administration and following on the heels of this week's announcement about a Digital Taskforce. No Code of Conduct for Ministerial Advisors ("shocked, shocked, I tell you". Vacuousness re FOI. The usual piffle about 'strategy', 'vision', 'agile', 'innovative', 'responsive, 'engaged' and so forth

The recommendations and responses are -

Recommendation 1: Implement APS transformation through strong leadership, clear targets, and appointment of a secretary-level transformation leader. 

Agreed. The Government has asked the Secretaries Board to implement agreed initiatives of the APS Review and other priority actions, as part of the Government’s broader APS reform agenda. The Board will conduct a three-month detailed planning sprint in early 2020 to develop an integrated set of reforms to build APS capability and lift its performance. 

The Secretary of the Department of the Prime Minister and Cabinet (PM&C), the Chair of the Secretaries Board, will lead this change, supported by the Australian Public Service Commissioner. The Board will be accountable for delivery of the program. Responsibility for the delivery of initiatives and metrics to measure success will be set during the detailed planning sprint. A small, high-impact team in PM&C will support the transformation. 

The Board will develop and agree with the Government a set of APS-wide performance targets. The Board, through its Chair, will be accountable for mobilising the APS to deliver a set of clear and critical outcomes for the Australian people. 

Recommendation 2a: Undertake regular capability reviews to build organisational capability 

Recommendation 2b: Promote continuous improvement through the PM&C Citizen Experience Survey, APS census, external advice and better performance reporting 

Agreed. The Secretaries Board will undertake a series of targeted reviews from mid-2020. This will include (with details to be determined in the three-month detailed planning sprint): • thematic, cross-portfolio reviews of the delivery of functions (including enabling tools and services) and of particular services or policies • portfolio-level reviews and stocktakes of functions and bodies, consistent with recommendation 34 of the APS review, led by portfolio secretaries, and • commencing in 2021, a program of prioritised and future-focused reviews of agency capability, supported by the APS Commissioner. The priority in undertaking these reviews will be to ensure the APS is operating productively and delivering the best collective outcomes possible. PM&C commenced a Citizen Experience Survey in 2018. The Government supports the survey as an important means to better understand citizen experience and satisfaction with public services delivered by the APS. The Secretaries Board has already endorsed the publication of APS Employee Census results. Three-quarters of APS agencies agreed to publication of results from the most recent Census. The Secretaries Board has advised that it supports the proposal that agencies seek regular external advice on their performance and organisational health, and that agencies should adopt or continue their own effective and efficient mechanisms for doing so.  

Recommendation 3: Drive APS transformation and build capability with innovative funding mechanisms 

Noted. The Government will make an initial investment of $15.1 million to support the Secretaries Board commence delivery of agreed recommendations of the APS Review, including undertaking the detailed implementation planning sprint referred to in the response to recommendation 1 above. 

Recommendation 4: Build the culture of the APS to support a trusted APS, united in serving all Australians 

Agreed. The Secretaries Board will drive positive and long-term change of APS culture. The Board will leverage existing strengths of APS culture and build on the existing cultural, values and behaviour change programs in agencies. APS-wide culture change will focus on identifying and driving a small number of key behavioural shifts that will collectively lift APS performance and capability. The change program will reinforce APS integrity, including the legislated Values of the APS. 

Recommendedation 5: Promote a shared understanding of the APS and its role alongside the Executive 

Agreed in part. The Secretaries Board will, over the course of 2020 and 2021, work with parliamentary departments and others to progressively update induction and training materials to promote a shared understanding of the APS and its role alongside the Executive and the Parliament. Consistent with the Secretaries Board’s advice, the Government does not agree with the recommendation to amend the Public Service Act 1999. The Government has made clear that it endorses the Westminster principles that underpin the APS, including as reflected in the Public Service Act 1999 and the APS Values, and it is not necessary to redefine and legislate these principles to achieve the intent of the recommendation. 

Recommendation 6: Develop and embed an inspiring purpose and vision to unite the APS in serving the nation 

Agreed. The Secretaries Board intends to engage the APS in developing an inspiring statement of its purpose, to put the needs and expectations of Australians at the heart of what the APS does. This purpose will reinforce the APS’s role in serving the Government, the Parliament and the people of Australia. The Government intends the Australian Public Service Commission (APSC) and the Public Service Act 1999 to remain within the Prime Minister and Cabinet portfolio, with the Minister responsible for the public service sworn to PM&C. 

Recommendation 7: Reinforce APS institutional integrity to sustain the highest standards of ethics 

Agreed in part. The APS Commissioner will lead a series of initiatives to build a pro-integrity culture within the APS and reinforce integrity in what every member of the APS does. This will be part of the APS-wide cultural change program (see response to Recommendation 4) and will be reinforced in APS-wide induction, mandatory training and other core systems and processes. The Board will also explore measures to extend the reach and application of existing APS integrity requirements. The Government will consider further reforms through establishing a Commonwealth Integrity Commission to reinforce integrity in the federal public sector. Consistent with the Secretaries Board’s advice, the Government does not agree with the recommendation to amend the Public Service Act 1999. The Government considers the APS Commissioner has adequate powers to investigate and seek integrity information. The Board and responsible agencies will continue to monitor the effectiveness of current legislative frameworks for APS integrity. 

Recommendation 8: Harness external perspectives and capability by working openly and meaningfully with people, communities and organisations, under an accountable Charter of Partnerships 

Agreed in part. The Government expects the APS to better understand the needs and expectations of all Australians, and to work effectively with them. This is an integral part of good policy, implementation and service-delivery. Rather than agree a new framework like the proposed Charter of Partnerships, the APS will apply the recently-agreed APS Framework for Engagement and Participation to support genuine collaboration with Australians in designing better services and finding solutions to policy problems. Application of this Framework will be monitored through individual and agency-level performance processes. Building on existing tools, the Board will pursue two new initiatives to better understand the needs of Australians – an APS-wide survey of business (to be trialled in 2020 for Government consideration before being rolled-out), and an APS-wide analysis of complaints hotspots. Agencies will use these data and insights to inform its advice to Government. The Government notes the proposal for a new wide-ranging review of privacy, FOI and record-keeping arrangements. The Government’s principal focus is to ensure that agencies effectively implement current requirements, addressing practical problems where required. Any further reform to these arrangements would be considered separately to the Government’s response to the APS Review. 

Recommendation 9: Use place-based approaches to address intergenerational and multi-dimensional disadvantage 

Agreed in part. The Government is already pursuing place-based approaches in a number of regions, including in responding to natural disasters (e.g. through the National Drought and North Queensland Flood Response and Recovery Agency) and other initiatives like regional and city deals in places like the Barkly Region, Darwin, Townsville, Western Sydney, Geelong, Launceston, Hobart and Adelaide. Rather than develop a new framework, the Secretaries Board will first undertake cross-portfolio analysis on lessons learned and success factors for place-based approaches, including opportunities to expand this work. As part of this analysis, the Board will consider how regionally-based Senior Executive Service (SES) can better work with local communities and other jurisdictions. The Board will also consider how to best use different data sources in place-based work. 

Recommendation 10: APS to work in genuine partnership with Aboriginal and Torres Strait Islander peoples  

Agreed in part. The Government and the APS are committed to improving the lives of Aboriginal and Torres Strait Islander Australians. The new National Indigenous Australians Agency is working with Aboriginal and Torres Strait Islander communities around Australia, and with other portfolios and state and territory governments, to ensure Government policies, programs and services address the needs of different communities. The Government is committed to improving local and regional decision-making and considering options for a national Voice, and has commenced a process to co-design models and options for this. The Council of Australian Governments and the National Coalition of Aboriginal and Torres Strait Islander Peak Organisations have agreed to a formal Partnership Agreement to finalise the Closing the Gap Refresh and provide a forum for ongoing engagement throughout implementation of the new agenda. The Government notes the recommendation that Parliament consider establishing an additional parliamentary committee on Indigenous Affairs. The establishment of parliamentary committees is a matter for the Parliament. The Government considers that the current arrangements are appropriate. 

Recommendation 11: Strengthen APS partnerships with ministers by improving support and ensuring clear understanding of roles, needs and responsibilities

Agreed in part. The Secretaries Board will lead work to ensure the APS provides the highest quality support for Ministers, and will liaise with Ministers to consider the merits of proposals like new tools and mechanisms for providing advice and support to Ministers and for Ministers to provide periodic and real time feedback to the APS. The Board will support the APSC and the Department of Finance to improve and roll-out better training and guidance for APS employees and parliamentary staff on how to support Ministers and their offices. The APSC will update its guidance on the roles and responsibilities defining interactions between Ministers, their advisers and public servants. The Secretaries Board and agency heads will support senior public servants to work in ministerial offices, in a range of roles, and will use mechanisms to improve APS mobility (see response to recommendation 21) and talent development (see response to recommendation 23) to support this. The Government does not agree to change arrangements for advisors. The Government expects all ministerial staff to uphold the highest standards of integrity and it uses a range of mechanisms to ensure they are held to account for these standards. The Government does not consider it necessary to amend the Members of Parliament (Staff) Act 1984 as proposed. The Government, and successive governments before it, have maintained a high number of policy advisers with public service experience and the Government does not consider it necessary to set a formal guidance about the number of advisers in each office who should have public service experience. 

Recommendation 12: APS to work closely with the states and territories to jointly deliver improved services and outcomes for all Australians  

Not agreed. The Government accepts the Secretaries Board’s advice not to proceed with this recommendation. The Government considers that existing arrangements are effective. The Council of Australian Governments has set and tracks key national priorities through a performance dashboard (available at https://performancedashboard.d61.io/aus), the Closing the Gap framework, and other sector-specific approaches. The Government also works closely with its state and territory partners, through COAG and other forums, to take practical action on national priorities like the drought, infrastructure and improved waste recycling. Current arrangements for the secretariat of COAG are consistent with long-standing practice and continue to support COAG effectively; the Government does not currently intend to alter them. 

Recommendation 13: Improve funding, structure, and management of digital functions across the APS 

Agreed in part. The Government will continue to strengthen the Digital Transformation Agency, including building its capability and role in support the digital transformation of government. The Digital Transformation Agency is supporting Services Australia deliver one of the Government’s highest priorities – better services for Australians. The Government notes the proposal that, in the long-term, it consider moving the Digital Transformation Agency to a stand-alone central department. The Secretaries Board will actively support the Digital Transformation Agency discharge its responsibilities as part of implementing the Government’s APS reform agenda. 

Recommendation 14: Conduct ICT audit and develop whole-of-government ICT blueprint 

Agreed. The Secretaries Board will conduct an urgent audit of government ICT capability, risks and needs and, in light of the audit, seek Government agreement to commission a longer-term ICT blueprint as proposed. The Digital Transformation Agency has already commenced working with the Departments of Defence and Home Affairs, Services Australia and the Australian Taxation Office to examine a single whole-of-government technology architecture and identify critical technology capabilities. This will support the effective and efficient digital transformation of Government – particularly in identifying opportunities to effectively update and replace legacy ICT systems and identify where new systems should be common or interoperable platforms for more than one agency, or whether an agency should adopt its own system. It will also support the development of coordinated APS-wide advice on major departmental investment priorities (see response to recommendation 34 below), and the Government’s work on a whole-of-Government digital technology architecture led by the Digital Transformation Agency. 

Recommendation 15: Build data and digital expertise across the service by applying the professions model and creating centres of excellence 

Agreed in part. The APS will establish separate digital and data professions in 2020, to build capability and support career paths in these critical areas. The APS Commissioner will lead the development of the professions. The APS has centres of excellence in areas including: • automation (Productivity and Automation Centre of Excellence – Department of Finance) • augmented intelligence (Augmented Intelligence Centre of Excellence – Services Australia) • digital sourcing (Digital Sourcing Centre of Excellence – Digital Transformation Agency; supported by the broader Centre of Procurement Excellence – Department of Finance) • innovation (Centre of Excellence in Innovation – Department of Industry, Science, Energy and Resources (from 1 Feb 2020)), and • data (Data61 – Commonwealth Scientific and Industrial Research Organisation; Data and Analytics Centre of Excellence – Australian Taxation Office; Analytics Community of Excellence – Department of Industry, Science, Energy and Resources). The Secretaries Board will support work to leverage and spread the expertise developed through these and other such centres of excellence.  

Recommendation 16: Deliver simple and seamless government services, integrated with states, territories and other providers 

Agreed. The Government has established Services Australia as one of the building blocks of its substantial reform program to ensure Australians can access simple and seamless government services. Supporting this and other Government reforms, the Secretaries Board will prepare a long-term roadmap of steps to improve and integrate services for Australian people and businesses. This roadmap will, at a high-level, identify opportunities to link up services for Australians, designed around their needs and practical actions to get there.  

Recommendation 17: Adopt common enabling tools and services to support efficiency, mobility, and collaboration

Agreed. The Secretaries Board will lead an ambitious adoption of common enabling tools and services for the APS. This builds on current initiatives like the Government’s Shared Services Program, the use of shared hubs for administering grants, and tools like GovTeams and CabNet+ that facilitate real-time, cross-portfolio collaboration on shared documents and projects. The Department of Finance is presently leading plans to build and pilot a common whole-of-government Enterprise Resource Planning foundation (GovERP), to bring together human resources and financial data. The Productivity and Automation Centre of Excellence, in the Department of Finance, is helping scale up process automation across government.  

Recommendation 18: Share and protect data for better services and policies, and make data open by default 

Agreed. Effective use of data, while ensuring privacy and security, supports better services for Australians, and better policy, programs and research. The Government’s Data Sharing and Release legislative reforms will support the APS better share and use Commonwealth data. The Government is also building APS capability to interrogate and use insights from data, including through investment in the Data Integration Partnership for Australia. Further to recommendation 15, the APS will establish a data profession in 2020 to support work to build the APS’s data capability. Consistent with the Australian Government Public Data Statement 2015, the APS has securely made extensive data open for public use, as recognised in Australia’s high-ranking in the OECD OURdata Index: Open-Useful-Reusable Government Data 2019. 

Recommendation 19: Develop a whole-of-service workforce strategy to build and sustain the way the APS attracts, develops and utilises its people, to ensure that it can perform its functions 

Agreed in part. The Government announced the development of an APS Workforce Strategy in the 2018-19 Budget. This will create an integrated and strategic approach to workforce management at APS levels, enabling the APS to better plan for and develop the capabilities it needs for the future. The Strategy will help position the APS as an employer of choice, with a high-performing, diverse and flexible workforce, deployed when and where needed. The APS Commissioner will release the first APS Workforce Strategy in 2020. The Secretaries Board will drive implementation of the Strategy and use it to guide efforts to deliver recommendations 20-25 and ensure the APS workforce is able to deliver for Australia and Australians now and into the future. The Government will continue to manage the size of the APS through the Average Staffing Level rule, and support flexible application of the cap to deliver priorities. The Government notes the recommendation that it abolish the Average Staffing Level rule in light of outcomes arising from the APS Workforce Strategy; it considers the Average Staffing Level rule is working effectively and will keep its application under consideration in light of workforce needs and the Government’s priority to deliver budget repair.  

Recommendation 20: Establish an APS professions model and a learning and development strategy to deepen capability and expertise 

Agreed. The Secretaries Board will build APS skills and expertise, and address gaps in capability, through development of an APS professions model. This will help the APS develop current and future capabilities identified in the APS Workforce Strategy (see response to recommendation 19). The APS Commissioner is the overall head of professions, with senior APS leaders to lead individual professions. The APS established a human resources profession in October 2019 and will progressively establish further professions in 2020, commencing with data, digital and procurement professions. The Secretaries Board will agree an APS-wide learning and development strategy to target APS investment in learning and development, emerging leaders and future skills needs, and to ensure investment delivers demonstrated returns where most needed at an enterprise level. The APSC will support the development and implementation of the strategy.  

Recommendation 21: Improve mobility, support professional development, and forge strong linkages with other jurisdictions and sectors 

Agreed in part. The Secretaries Board will agree a framework for mobility that includes incentives, targets and other practical steps to support mobility across the APS, and with other sectors. In doing so, the Board will focus on areas of the APS where mobility is most likely to lift capability and performance as identified in the APS Workforce Strategy (see response to recommendation 19). The APS will not introduce a mandatory requirement that experience in two or more portfolios or sectors is a pre-requisite for appointment to the SES, but through the mobility framework will adopt a more comprehensive approach that makes clear that, in applying the merit principle, broad experience including in different portfolios or sectors is a highly desirable attribute for appointment to the SES.  

Recommendation 22: Standardise and systematise performance management to drive a culture of high achievement 

Agreed. The APS Commissioner amended the Australian Public Service Commissioner’s Directions 2016 in July 2019 to set clear expectations about performance management (including SES performance management) across the APS. The Directions clarify the obligations of agency heads, supervisors and APS employees in achieving, promoting and fostering a high-performance culture. The Secretaries Board will build on this to embed a high-performance culture in the APS. Work already underway to increase the interoperability of APS HR systems will support effective performance management processes and enable the APS to have a system-wide understanding of current performance levels. 

Recommendation 23: Identify and nurture current leaders and staff with potential to become future APS leaders 

Agreed. The APSC, supported by the Secretaries Board, will complete benchmarked capability assessments for all SES Band 3s (deputy secretary equivalents) in 2020 and will commence capability assessments for all SES Band 2s and 1s in the first half of that year. These assessments will help target development, guide career paths, and identify under-performers. The Board has commenced a pilot EL2 talent development initiative under way. Findings from this project will inform future Board decisions on identification and support of future leaders at the EL level. The Secretaries Board will support development of the APS leadership pipeline, with the APSC to regularly advise on APS-wide capability and development of current and future APS leaders.  

Recommendation 24: Overhaul recruitment and induction to reflect best practice, use APS’s employee value proposition and target mid-career and senior talent outside the APS 

Agreed in part. The Secretaries Board has commenced development of an APS brand and employee value proposition to support efforts to lift external recruitment. This will be informed by, and delivered after, the APS Workforce Strategy (see response to recommendation 19). The APS Commissioner will provide clear expectations for effective APS recruitment, including to support internal and external mobility, through guidelines on best-practice recruitment. The Secretaries Board will use targeted mid-career and senior recruitment processes to address current or capability needs identified in the APS Workforce Strategy. Individual agencies will lead these recruitment processes and, through sharing merit lists, let other agencies know that highly-rated applicants may be interested in joining their agency. The APSC will support this process. The Secretaries Board has agreed to centralised pre-qualification checks for graduates, and will further consider the merits of extending such approaches in light of how the approach to graduates goes. The Attorney-General’s Department will lead cross-agency work to assess further opportunities to streamline and standardise security clearance processes, noting the importance that Australia’s security clearance processes remain robust and manage risk effectively. The APSC will support delivery of essential whole-of-service induction for new recruits to the APS and will examine the feasibility of using app-based ‘micro-learning’ as one tool to provide this induction and other training accessibly, easily and effectively.  

Recommendation 25: Strengthen the APS by recruiting, developing and promoting more people with diverse views and backgrounds 

Agreed in part. The Government and the Secretaries Board are committed to shaping an APS that reflects and understands the people and communities it serves. The Secretaries Board is leading a range of actions to increase diversity and inclusion across the APS, through renewed Indigenous, gender and disability employment strategies. The Government has also requested the APS Commissioner to ensure the APS does more to retain and recruit older Australians. The Board does not consider additional goals and strategies are currently needed to advance this work and will continue to renew and update its approach to ensure it is effective. The Secretaries Board will harness the APS200 in delivering on these strategies and in leading the behavioural shifts necessary to support their effective delivery – including focussing on a mindset that genuinely welcomes different views and perspectives. The Board will continue to support special measures recruitment rounds for diversity groups, building on the success of the Indigenous special measures recruitment round at SES level in 2018, led by PM&C. The APSC will support agencies to run these rounds and facilitate merit lists being used from these rounds across the APS. 

Recommendation 26: Embed a culture of evaluation and learning from experience to underpin evidence- based policy and delivery

 Agreed in part. The Department of Finance, supported by the Secretaries Board, will establish a small team to help build evaluation expertise and practices. This will leverage the evaluation expertise already existing in many agencies, with other agencies to review and boost their own evaluation capabilities. Finance will develop guidance to ensure systematic evaluation of programs and policies in line with the Enhanced Performance Reporting Framework and work with PM&C (including the Office of Best Practice Regulation) to embed evaluation planning in new policy proposals and Regulation Impact Statements. The APS will create an evaluation profession after establishment of the central evaluation function in the Department of Finance. The Government endorses these initiatives and supports the appropriate publication of completed evaluations. Consistent with the Secretaries Board’s advice, the Government does not agree with systematic changes to Cabinet and Budget advice processes. The Government considers that existing arrangements are effective. The Cabinet Handbook requires proposals to provide concise and robust advice on implementation challenges and risk mitigation strategies; it is expected that this should include consideration of evaluation plans. Similarly, the Australian Government Guide to Regulation provides that proposals should address implementation and evaluation planning. 

  Recommendation 27: Embed high-quality research and analysis and a culture of innovation and experimentation to underpin evidence-based policy and delivery 

Agreed in part. The APS has strong applied research capability, including in respected research and analysis institutions like the following: • Commonwealth Scientific and Industrial Research Organisation • Office of National Intelligence • Australian Bureau of Statistics • Bureau of Meteorology • Australian Bureau of Agricultural and Resource Economics and Sciences • Bureau of Infrastructure, Transport and Regional Economics • Bureau of Communications and Arts Research • Australian Institute of Family Studies • Australian Institute of Criminology • Australian Institute of Marine Sciences • Department of Agriculture, Water and the Environment (from 1 Feb 2020) - Australian Antarctic Division, and the • Australian Institute of Health and Welfare. Other departments and agencies also invest in research capability, including though different innovation incubators like the Design Hub in Services Australia, BizLab (Department of Industry, Science, Energy and Resources), the Behavioural Economics Team of Australia (PM&C), the digital records management initiative with the ANU (Department of Finance) and the co-Lab innovation hub (Digital Transformation Agency). The APS also works with private and non-government research bodies to boost its capability. The APS will continue to invest in and support research and publish research as appropriate. The Secretaries Board does not consider it necessary to formalise publication of research in new protocols or similar. PM&C and the APSC will lead engagement with academia on research on better public administration. 

Recommendation 28: APS to provide robust advice to the Government that integrates and balances the social, economic and security pressures facing Australians 

Agreed in part. The Secretaries Board and central agencies including PM&C will support the delivery of integrated policy advice that balances different social, economic, security and international interests. This will be supported by the use of Secretaries Board clusters (see recommendation 29) and cross-agency taskforces to examine specific issues – a good example is the inter-agency taskforce established to develop a strategy for critical minerals that are essential for defence purposes and have vulnerable supply routes. The Secretaries Board will consider the use of scenario planning exercises to explore cross-cutting issues and emerging trends, in consultation with the Government. The Secretaries Board does not consider it necessary to establish a new Integrated Strategy Office within PM&C. One of the Department’s primary roles is to integrate and balance competing interests and this is best supported by ensuring existing arrangements support this, rather than creating a new office to do it.  

Recommendation 29: Establish dynamic portfolio clusters to deliver government outcomes 

Agreed. The Prime Minister has established clear priorities and targets with each Minister, with the Priorities and Delivery Unit in PM&C in place to track delivery and help measure progress against them. The Secretaries Board will support delivery of government priorities. It will use existing arrangements (such as the Secretaries Committee on National Security and the Secretaries Social Policy Committee) and, rather than establish a new set of standing clusters, will establish new Secretary or Deputy Secretary-level committees dynamically around the delivery of particular government priorities. PM&C will help ensure such arrangements are established promptly and meet the needs of the Prime Minister and the Cabinet in helping achieve government outcomes. 

Recommendation 30: Ensure that Machinery of Government changes are well planned and evaluated, enabling a dynamic and flexible APS that responds swiftly to government priorities 

Noted. Decisions on machinery of government changes are a matter for the Prime Minister and will be guided by the Prime Minister’s judgment on appropriate administrative arrangements to deliver the Government’s priorities. The Secretaries Board will share lessons on the effective implementation of machinery of government changes.  

Recommendation 31: Review form, function and number of government bodies to make sure they remain fit for purpose 

Agreed in part. Consistent with this recommendation, the Government is reducing the number of departments from 18 to 14 to ensure the number and functions of government departments are fit for purpose to deliver better services, reduce bureaucratic silos and provide coherent advice on complex issues. The Government is currently considering changes to the Commonwealth Governance Structures Policy. The Secretaries Board will, from mid-2020 (as noted in the response to recommendation 2a), conduct portfolio reviews and stocktakes of portfolio functions and bodies against the Policy. The Government will consider any proposals.  

Recommendation 32: Streamline management and adopt best practice ways of working to reduce hierarchy, improve decision-making, and bring the right APS expertise and resources 

Agreed. The Secretaries Board is focused on ensuring that the structure and hierarchies of APS agencies support the effective and efficient delivery of outcomes for Australians. As a first step, in 2020 the APSC will update 2014 guidance on optimal management structures, which was designed to flatten management structures and increase spans of control, and conduct a review of SES and non-SES classification levels and structures. The Secretaries Board will, in their own departments and through portfolio agencies, apply the updated guidance and use the review of classifications to ensure decision-making is simple and that there are no more layers of clearance than necessary. The Secretaries Board will oversee development of new APS-wide guidance on best-practice problem solving and dynamic ways of working, to support development of common languages and approaches for teams, often working across agencies or disciplines, to tackle problems in an evidence-based and agile way. Agencies will review their own capability in deploying these methodologies through capability reviews (see response to recommendation 2a).  

Recommendation 33: Move toward common core conditions and pay scales over time to reduce complexity, improve efficiency and enable the APS to be a united high-performing organisation 

Not agreed. Current policies around APS pay and conditions are working effectively. Employees and agencies are agreeing to new enterprise agreements or productivity-based pay rises on existing terms and conditions, in an efficient and effective manner. The Government accepts the Secretaries Board advice not to proceed with service wide pay points and will continue with the existing APS Enterprise Bargaining Framework. The Secretaries Board will further consider options to inject greater discipline in SES remuneration as a means of facilitating greater SES mobility. 

Recommendation 34: Ensure APS capital is fully funded, sustainable and fit for purpose, and capable of delivering policy and services as intended by the Government  

Agreed. The Department of Finance is developing a prioritised whole-of-government plan for major departmental investment, for Government consideration. The Department of Finance will also assess agency minor capital requirements. The Government will consider funding needs in the 2020-21 and subsequent Budget processes, balancing investment against other priorities in light of the overall fiscal position. 

Recommendation 35: Deliver value for money and better outcomes through a new strategic, service-wide approach to using external providers 

Agreed in part. The Department of Finance has established the Centre of Procurement Excellence to lift APS-wide procurement capability and to drive better commercial outcomes through ongoing coordination of procurement and the aggregation and analysis of procurement information to deliver efficiencies. This applies where an external provider is engaged through a procurement. The Secretaries Board will further consider the proposal for a broader framework for the APS use of external providers. There is a considerable number of existing rules and guidance that apply to the APS’s use of external providers (including grants to the states and territories), and the Board will review these and consider whether a new Framework is likely to deliver better outcomes. The Digital Transformation Agency is supporting better outcomes in sourcing digital products and services through the Digital Sourcing Framework for ICT procurement.  

Recommendation 36: Provide robust and responsive advice to support governments deliver priorities through improved budget prioritisation 

Agreed in part. The Board will undertake a series of reviews (see response to recommendation 2a) that will support robust, ongoing spending advice to Government. The Government prioritises and reviews current and expected spending through the usual Budget processes, supported by additional insights from analyses like the Intergenerational Report, Productivity Commission reports and research, and one-off processes like the National Commission of Audit and agency-level Functional and Efficiency Reviews. The Department of Finance will continue to support dynamic funding mechanisms to foster innovation and agility in project delivery and support delivery of emerging or cross-portfolio priorities. The Digital Transformation Agency is working with the Department of Finance and other agencies on effective agile funding models to support digital projects. The Cabinet has recently agreed to a new Commonwealth Investment Framework to effectively manage balance sheet investments such as equity investments, loans and guarantees. The Government considers that the Charter of Budget Honesty Act 1998 is operating effectively and does not agree to a review of the Act.  

Recommendation 37: Strengthen the primacy, role and performance of Secretaries Board within the public service 

Agreed in part. The Secretaries Board will operate as the strategic management committee responsible for leading the APS and running it as a single enterprise. This includes setting APS-wide performance targets (see response to recommendation 1), mobilising the APS to deliver government priorities (see response to recommendation 29), and supporting the development of common enabling tools and services for the APS (see response to recommendation 17). The Board will reform its own way of operating to support this, including providing clearer direction to the APS and better communication of its work and priorities. The Board will undertake cross-portfolio work to analyse future trends and their implications for Australia in collaboration with Government. It will connect it to existing work (including the Intergenerational Report, the Productivity Commission’s Productivity Review and CSIRO’s Futures reports) and deliver it with proposed scenario planning work (see response to recommendation 28). Consistent with the Secretaries Board’s advice, the Government does not agree that the Secretaries Board requires additional legislative or ministerial authority. The Government considers that existing arrangements are effective.  

Recommendation 38: Clarify and reinforce APS leadership roles and responsibilities 

Not agreed. The Government accepts the Secretaries Board’s advice not to proceed with this recommendation. The Government considers that current roles and responsibilities of the Secretary of PM&C, the APS Commissioner and portfolio Secretaries work effectively in practice and there is no need to alter these or further clarify them in legislation. The APS Commissioner will establish an Advisory Board to help ensure the APSC best discharges its responsibilities. 

Recommendation 39a: Ensure confidence in the appointment of all agency heads 

Recommendation 39b: Ensure that performance management of Secretaries is robust and comprehensive 

Recommendation 39c: Ensure that robust processes govern the termination of secretaries’ appointments 

Agreed in part. As set out in the Public Service Act 1999, the Secretary of PM&C and the APS Commissioner are responsible for the performance management of Secretaries. These processes were recently strengthened, including through seeking 360 degree feedback to inform performance discussions. The Secretary of PM&C and the APS Commissioner will continue to support robust and comprehensive performance management and will publish the performance management framework for Secretaries. Consistent with the Secretaries Board’s advice, the Government does not agree with initiatives in recommendations 39a and 39c. The Government considers that the PM&C Secretary and the APS Commissioner already support effective Minister-Secretary working relationships. The Government considers that current processes and arrangements governing the appointment and termination of Secretaries and agency heads work effectively and there is no need to alter them. The Government reiterates its commitment to the apolitical nature of the APS, as set out in the Public Service Act 1999, and the expectation that all Secretaries and agency heads demonstrate the highest standards of public service professionalism and expertise in the discharge of their legislative responsibility on behalf of the Government, the Parliament and the Australian public. 

Recommendation 40: Reform and energise the APSC as a high-performing and accountable central enabling agency

Agreed. The Government and the Secretaries Board value the APSC and recognise the importance of its responsibilities, including its role as the central agency with responsibility for management of the APS workforce. The APSC is building its capability and capacity following a mid-2019 future-focused capability review, conducted by an independent panel. The Government also notes collaborative agreement by the Secretaries Board to adjust funding arrangements for the APSC to ensure financial sustainability into the future. 

Thodey's comments regarding FOI were

Some barriers to openness can be administrative as well as cultural. To accompany the new approach to engagement it is timely to examine the suite of privacy, FOI and record-keeping rules and regulations to ensure they are fit for purpose for the digital age, now and into the future, with an emphasis on openness. As a general principle, it should be as simple, fast and cheap as possible for interested parties to access information held and generated by the APS. 

A small amount of the material prepared by the APS informs deliberative processes of government. The review believes it critical that this material remain confidential, and be exempt from release under FOI legislation. This has been recommended before, and this review agrees that such an exemption is critically important to effective public administration in strengthening the APS’s partnership with the Government. 

In his 2015 report Learning from Failure, Professor Peter Shergold AC observed that:

the Commonwealth FOI laws now present a significant barrier to frank written advice. The Commonwealth laws have had the unintended consequence of constraining the content, form and mode of advice presented to ministers ... the consequences include a patchy record of decision-making and an increased likelihood of decisions being made based on incomplete or poorly argued information. This can ultimately only be detrimental to good governance and the public interest.

Similarly, members of the review’s reference group, including former ministers and senior public servants, highlighted their own experiences of FOI legislation inhibiting the provision of frank and fearless advice to government on deliberative matters, especially in writing. Ensuring that APS advice and opinion provided to support the deliberative processes of government policy formulation remain confidential will give public servants the confidence to provide frank and fearless advice, and ministers and the Cabinet the best advice to make fully informed decisions.

Dignity and Quackery

'The Social Ontology Of Human Dignity' by Nicholas Aroney comments

 The Universal Declaration on Human Rights (1948) begins with the striking claim that the ‘recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world’. Rather than use words that individualise and universalise in abstract terms, the Declaration describes humanity as an extended family, knit together by ties that are personal, natural and communal. Despite this, the rights enshrined within the Declaration and other international human rights instruments have generally been understood in a way that prioritises the rights of individuals, and the concept of human dignity is often cited in a way that connects it with individual autonomy. However, a close examination of these instruments shows them to presuppose a social ontology in which human beings are not merely isolated individuals, but constituted as members of communities at familial, local, regional, national and global scales. An exploration of this communal embedding of the dignity of all members of the human family has implications for how international human rights are understood, particularly in controversial cases where the rights of human beings conceived as individuals have to be harmonised with the rights of human beings living in community with others. A better understanding of the social ontology presupposed by international human rights law is therefore a prerequisite for addressing problems of harmonisation of this kind. 

Noting that the individualistic aspects of human rights law is often said to reflect Western influence, this paper traces the historical development of the idea of human dignity in classical, medieval, reformed and modern Western thought. It is argued that while the older classical conception of dignity understood it to be an attribute that set some classes or groups of human beings apart from others, the idea was transformed under the influence Stoic philosophy and especially Christian theology into an attribute possessed by all human beings by virtue of their created nature. In the early and later medieval and reformed perspectives, human dignity was understood to be an attribute of all human persons, conceived not as autonomous and atomised individuals, but as embedded in a great variety of associations and communities. Moreover, in the classical, medieval and reformed conceptions alike, dignity was considered to be something that can never be separated from one’s moral responsibilities as a human being called upon to perform the duties associated with one’s particular callings and stations in life. It is only in certain modern conceptions that human dignity has become disassociated from the qualities of one’s character and from the associations and communities in which human beings are naturally embedded. 

It follows that international human rights law, insofar as it recognises a social ontology which is simultaneously individualistic, associational and communal, is not entirely oriented to modern Western atomising conceptions of human dignity, but embraces older Western and possibly wider non-Western conceptions as well.

'Dignity Transacted' by Lu-In Wang and Zachary W Brewster in (2019) 53 University of Michigan Journal of Law Reform comments

In interactive customer service encounters, the dignity of the parties becomes the currency of a commercial transaction. Service firms that profit from customer satisfaction place great emphasis on emotional labor, the work that service providers do to make customers feel cared for and esteemed. But performing emotional labor can deny dignity to workers, by highlighting their subservience and requiring them to suppress their own emotions in an effort to elevate the status and experiences of their customers. Paradoxically, the burden of performing emotional labor may also impose transactional costs on some customers by facilitating discrimination in service delivery. Drawing on the extant scholarship on emotional labor and ongoing research on full-service restaurants, we argue that the strain and indignities of performing emotional labor, often for precarious compensation, lead servers to adopt various coping strategies, including some that open the door to their delivery of inferior and inhospitable service. When these strains and indignities are coupled with culturally entrenched racial stereotypes and racialized discourse in the workplace, the result is that people of color—a legally protected category of customers—are systematically denied dignity and equality by being excluded from the benefits of welcoming and caring customer service. Discriminatory customer service often is so subtle and ambiguous that it escapes legal accountability. It nevertheless warrants our attention, because it contributes to the social and economic marginalization of people of color. Far from being a mundane or trivial concern, the dynamics described in this article underscore the various ways in which particular groups come to be designated as suitable targets for a wide range of disregard and mistreatment. These dynamics also illuminate how structural conditions facilitate and promote economic discrimination, as well as the connections between workers’ rights and civil rights.

South Australia has followed Victoria in issuing prohibition orders regarding Kambô, of interest for scholars regarding the regulation of new age medicine. The orders are based on Health and Community Services Complaints Act 2004 (SA) s 56C.

The South Australian Health & Community Services Complaints Commissioner (HCSCC) media release refers to prohibition orders against Ms Carlie J Angel and Mr Brad T Williams (trading as Two Wolves – One Body - noted elsewhere on this blog). 

The orders prohibit Ms Carlie Angel, Mr Brad Williams and the entity Two Wolves – One Body, either personally or through or in connection with another person or entity, from:

• providing health services that involves, or is any way related to, Kambô or Sananga services of any description on an indefinite basis; and 

• offering, advertising or otherwise promoting health services that involves, or is any way related to, Kambô or Sananga services of any description on an indefinite basis.

The prohibition orders follow an investigation by the HCSCC, during which expert evidence was obtained concluding that there are no clinical data which indicates any medical benefits arising from the application of Kambô treatments. 

Significantly, the expert opinion is that the application of Kambô and Sananga treatments have a range of adverse physiological effects. In the case of Kambô, these may include vomiting, diarrhoea, dehydration, electrolyte loss, and hypotension and tachycardia in individuals with underlying cardiovascular issues. 

Deaths, whilst rare, have been reported. 

In the case of Sananga, reports of pain, ranging from mild to severe, have been documented. 

Associate Professor Davies explained that this evidence was reason behind issuing the prohibition orders. 

“After receiving the expert advice, it was clear to me that Kambô and Sananga could be very dangerous for some individuals,” Associate Professor Davies said. 

“From the expert evidence, I have formed the view they are unsafe, and that the effectiveness of such treatments cannot be guaranteed. “I have decided to issue the indefinite prohibition orders to protect South Australians from potential harm from these practices. ;

Behemoths

The ACCC has released a Statement of Issues regarding the proposed merger of Cengage and McGraw-Hill.

 The ACCC states

 1. Educational publishing businesses Cengage Learning Holdings II, Inc (Cengage) and McGraw Hill Education, Inc (McGraw-Hill) propose to merge their global businesses (the proposed merger). Cengage and McGraw-Hill both operate educational publishing businesses in Australia through various subsidiaries. 

2. This Statement of Issues:

• gives the preliminary views of the Australian Competition and Consumer Commission (ACCC) on competition issues arising from the proposed merger; 

• identifies areas of further inquiry; and 

• invites interested parties to submit comments and information to assist our assessment of the issues. 

3. Statements of Issues do not refer to confidential information provided by the parties or other market participants and therefore may not necessarily represent a full articulation of the ACCC’s preliminary position. 

Overview of ACCC’s preliminary views 

4. The legal test which the ACCC applies in considering the proposed acquisition is set out in section 50 of the Competition and Consumer Act 2010. In general terms, section 50 prohibits acquisitions that would have the effect, or be likely to have the effect, of substantially lessening competition in any market. 

5. The ACCC divides its preliminary views into three categories, 'issues of concern', 'issues that may raise concerns' and ‘issues unlikely to raise concerns’. In this Statement of Issues there is one “issue of concern”, one “issue that may raise concerns” and two “issues that are unlikely to raise concerns”. 

Issue of concern – reduction in the number of major publishers in higher education publishing in Australia 

6. The ACCC is concerned that the proposed merger would substantially lessen competition in the supply of higher education publishing in Australia. 

7. Higher education publishing in Australia is highly concentrated, and there are very few firms that operate on a scale comparable to Cengage and McGraw-Hill. Most other competitors are much smaller and are only active in a narrow range of disciplines. Further, the barriers associated with new entry or expansion appear to be high. 

Issue that may raise concern – loss of competition for the acquisition of authors’ rights for higher education content 

8. The ACCC is concerned that the proposed merger may substantially lessen competition in the acquisition of authors’ rights for higher education content in Australia.  

9. The ACCC’s preliminary view is that the proposed merger will further reduce the already limited number of major publishers with whom higher education authors can publish their works. This will likely enhance the merged entity’s bargaining power with authors and increase the merged entity’s ability and incentives to impose onerous terms in contracts with authors. 

Issues unlikely to raise concerns – supply of primary education publishing and secondary education publishing 

10. The ACCC’s preliminary view is that it is not likely that the proposed merger will raise significant competition issues in respect of the supply of primary education publishing. 

11. The ACCC’s preliminary view is that it is not likely that the proposed merger will raise significant competition issues in respect of the supply of secondary education publishing.

The ACCC is seeking submissions, particularly on the following key issues:

• whether there is a market for publishing in higher education (incorporating university and Vocational Education and Training (VET)) or whether there are separate markets for publishing in university and vocational education, or separate markets for publishing in individual higher education disciplines (for example, psychology or accounting) or courses (for example, introductory psychology, management accounting or financial accounting), 
• whether there is a market for the acquisition of authors’ rights in higher education (incorporating university and VET) or whether there are separate markets for the acquisition of authors’ rights in university and vocational education or separate markets for the acquisition of authors’ rights for individual higher education disciplines or courses, 
• the extent to which a merged Cengage-McGraw-Hill would be constrained from reducing the quality of its products, eliminating titles or increasing its actual or effective prices by remaining publishers of higher education materials,  
• the height of barriers to entry in higher education publishing, 
• the height of barriers to expansion into higher education publishing in particular disciplines, 
• the ease with which authors can switch publishers, or may be able to do so post-merger, and 
• the extent to which a merged Cengage-McGraw-Hill would be constrained from lowering royalties or otherwise adversely changing terms of its contracts with authors

Digital Platforms

The Commonwealth Government's response to the ACCC Digital Platforms inquiry recommendations states

Our response outlines a roadmap for a program of work and series of reforms to promote competition, enhance consumer protection and support a sustainable Australian media landscape in the digital age. We’ve identified areas for immediate reform as well as those requiring longer term work and further consultation. The implementation roadmap will provide clarity and certainty for business and consumers on our commitments and the timeframe for implementing our response. 

We are pleased to announce our immediate commitment to: • establish a special unit in the ACCC to monitor and report on the state of competition and consumer protection in digital platform markets, take enforcement action as necessary, and undertake inquiries as directed by the Treasurer, starting with the supply of online advertising and ad tech services • address bargaining power concerns between digital platforms and media businesses by tasking the ACCC to facilitate the development of a voluntary code of conduct • commence a staged process to reform media regulation towards an end state of a platform-neutral regulatory framework covering both online and offline delivery of media content to Australian consumers • ensure privacy settings empower consumers, protect their data and best serve the Australian economy by building on our commitment to increase penalties and introduce a binding online privacy code announced in the 2019–20 Budget, through further strengthening of Privacy Act protections, subject to consultation and design of specific measures as well as conducting a review of the Privacy Act.

Through our response, the Government will deliver a regulatory framework that is fit for purpose and better protects and informs Australian consumers, addresses bargaining power imbalances between digital platforms and media companies, and ensures privacy settings remains appropriate in the digital age.

 The document centres on a roadmap for action—responding to the Digital Platforms Inquiry

Digital platforms have changed how people and businesses connect

Australians rely on digital platforms in their everyday lives: to communicate, for entertainment, to learn, to undertake research, to buy goods and services and run their business. In a given month, around 19.2 million people in Australia use Google Search, 17.3 million use Facebook, 17.6 million use YouTube, and 11.2 million use Instagram. Many Australians access these services daily for long periods of time, spending an average of 23 minutes a day on Google (excluding YouTube) and half an hour a day on Facebook.

Digital platforms are an essential input to modern business, helping to improve performance and lift productivity through lower costs, access to new markets and the ability to tailor goods and services. More than half of all small businesses in Australia have a Facebook page and many use Google to promote their services.

Data is the resource that powers much of this activity, and it is being created and collated at an unprecedented scale. The capacity to process this data is also improving, providing us with greater insights and information than ever before. While the benefits of digital services and technology are vast and will continue to grow, we must also be aware of, and respond appropriately to, the risks that are presented so that consumers and businesses have the confidence and capacity to engage in the digital world.

These changing dynamics require new approaches to regulation

The business models of digital platforms, their global nature and the pace that digital technologies and services evolve and iterate challenge our existing regulatory frameworks.

The ACCC’s Digital Platforms Inquiry (DPI) was a ground-breaking study into the competitive impacts of global digital platforms on the news media and advertising sectors in Australia. The ACCC found digital platforms to be an important innovation that has fundamentally changed the way media content is produced, distributed and consumed, and that Facebook and Google have grown rapidly to become the dominant players in important online markets in Australia. This dominance is underpinned by the volume of data these companies gather and control.

The ACCC also found that Google and Facebook have become unavoidable business partners for media companies to both access an audience for their content and secure advertising revenue.

The Government accepted the overriding conclusion was that there is a need for reform—to better protect consumers, improve transparency, recognise power imbalances and ensure that substantial market power is not used to lessen competition in media and advertising services markets.

The final report contained 23 wide-ranging recommendations that relate to competition, consumer protection, privacy and media regulatory reform. Several of the recommendations are proposed to be economy-wide or require significant structural changes to existing regulatory frameworks.

The Government is already taking action

Several of the ACCC’s recommendations align with existing commitments.

The Government announced in March 2019 that it will consult on draft legislation to amend the Privacy Act to increase maximum civil penalties to match penalties under the Australian Consumer Law, and to require the development of a binding privacy code that will apply to social media platforms and other online platforms that trade in personal information. Under the legislation, the binding privacy code, which will be developed by the Office of the Australian Information Commissioner (OAIC), will require these entities to be more transparent about data sharing; to meet best practice consent requirements when collecting, using and disclosing personal information; to stop using or disclosing personal information upon request; and include specific rules to protect personal information of children and vulnerable groups. The Government will release the draft legislation for consultation, and subsequent to consultation, introduction of legislation and the development of the code is to occur in 2020.

The ACCC’s report acknowledges the work already underway to strengthen protections in the Australian Consumer Law as a positive step to deter questionable data practices by businesses and protect individuals’ personal information. In March 2019, the Government committed to further strengthen unfair contract term protections for small business and will shortly consult on a Regulation Impact Statement, which will cover a range of policy options. These include making unfair contract terms illegal and attaching civil penalties to breaches; revising the definition of a small business; broadening the coverage of small business contracts; and clarifying the definition for a standard form contract.

The Review of the Australian Consumer Law finalised in 2017 recommended further work to explore how an unfair trading prohibition could be adopted in the Australian context to address potentially unfair business practices. Following agreement of consumer affairs ministers, this work commenced in 2019 through Consumer Affairs Australia and New Zealand (CAANZ).

These commitments build on other Government initiatives designed to promote news and journalism and keep Australians safe online.

More than $60 million over three years is being invested in quality regional journalism through the Regional and Small Publishers Jobs and Innovation Package (the Package). The Package is designed to help small metropolitan and regional publishers adapt to the challenges facing the contemporary media environment, create employment opportunities for cadet journalists and support regional students to study journalism.

The Government is implementing the recommendations of the Taskforce to Combat Terrorist and Extreme Violent Material Online through which digital platforms and internet service providers agreed to undertake substantive actions. Consistent with the Christchurch Call to Action, the Government is also working internationally and through the actions agreed to drive concrete initiatives on preventing terrorist and violent extremist exploitation of the internet.

Getting the settings right—the forward work program

In response to the ACCC’s inquiry, the Government has developed a reform roadmap to ensure competition, consumer protection and a sustainable Australian media landscape. The Government’s role is not to protect domestic businesses from digital competition, but rather to ensure the proper functioning of markets and a fair approach to regulation that ensures the rules of the physical world apply equally to the digital world.

Some of the recommendations can be addressed rapidly, while others will need further consideration and engagement given the complexity of the issues and the potential to have whole-of-economy effects.

Ensuring appropriate consumer protections

It is important that Australians have the confidence and capacity to engage with the opportunities that digital platforms can offer. This confidence comes from the ability to determine the trustworthiness and source of information they access online, trust in how their data is collected and used, and clear and transparent processes for having their complaints about digital platforms heard.

Consultation on the Privacy Act reforms announced in March 2019 will also seek input on amending the definition of ‘personal information’ in the Privacy Act to capture technical data and other online identifiers; strengthening existing notice and consent requirements to ensure entities meet best practice standards; and introducing a direct right of action for individuals to bring actions in court to seek compensation for an interference with their privacy under the Privacy Act.

While consultation confirmed there is general satisfaction with the Privacy Act’s principles-based, technology neutral approach, it is also appropriate to consider how the scope of the Privacy Act applies and fits in the digital age and the adequacy of enforcement arrangements. The Government will commence a review of the Privacy Act to ensure it empowers consumers, protects their data and best serves the Australian economy.

A review will identify any areas where consumer privacy protection can be improved, how to ensure our privacy regime operates effectively for all elements of the community and allows for innovation and growth of the digital economy. The review will also allow for further consultation on the ACCC’s reform proposals to enable consumers to request the erasure of their personal information.

There is growing global recognition of the need for citizens to be equipped to engage critically with online news and information sources in light of the increased prevalence of ‘fake news’ and disinformation. Online services, including digital platforms, play a key role in aggregating and disseminating this content.

The risks posed by disinformation and an erosion of news quality highlight the importance of collective and coordinated action by industry, civil society and governments. This includes the creation of a strong and sustainable news media ecosystem alongside educational initiatives for citizens to improve their ability to engage critically with online news and information sources.

The Government recognises the need to balance any interventions that might target media literacy and disinformation with rights to freedom of expression and speech. It is important that Australia’s approach aligns with and supports global initiatives.

The Government will ask the major digital platforms to develop a voluntary code (or codes) of conduct for disinformation and news quality. The Australian Communications and Media Authority (ACMA) will have oversight of the codes and report to Government on the adequacy of platforms’ measures and the broader impacts of disinformation.

The codes will address concerns regarding disinformation and credibility signalling for news content and outline what the platforms will do to tackle disinformation on their services and support the ability of Australians to discern the quality of news and information. The codes will be informed by learnings of international examples, such as the European Union Code of Practice on Disinformation. The Government will assess the success of the codes and consider the need for any further reform in 2021.

The Government is committed to protecting Australians online – this includes protecting businesses and consumers in the digital economy. While complaints handling frameworks are well established in other essential service areas, it is clear from the ACCC report that digital platform users appear to have limited options to resolve complaints.

The Government will develop a pilot external dispute resolution scheme, the outcomes of which will inform whether to establish a Digital Platforms Ombudsman to resolve complaints and disputes between digital platforms and individual consumers and small businesses using their services.

There is also merit in requiring digital platforms operating in the Australian market to demonstrate that they have internal dispute resolution processes which provide a clear, transparent avenue for people to pursue concerns with service providers before needing to escalate concerns to an external dispute resolution mechanism. This means that internal and external dispute resolution processes need to be complementary and tightly integrated.

The Government will assess the development and rollout of the pilot scheme over the course of 2020, along with any parallel improvements in associated internal dispute resolutions processes. This will inform the Government’s consideration of the need for a broader external dispute resolution process, including a Digital Platforms Ombudsman, in 2021.

Promoting competition and improving market transparency

Effective competition is essential for a strong business sector, better consumer outcomes and a strong economy. While digital platforms such as Google and Facebook are key pioneers in developing and popularising the online services they provide, their dominance of markets for the supply of these services creates competition risks.

The DPI was established in response to concerns about an imbalance of bargaining power between digital platforms and Australian media companies. The final report examines the competitive impacts and implications of their existing commercial relationships, in particular the role of online advertising in the dissemination and monetisation of news content and the long term impacts on the sustainability of the news media sector. It is clear from the ACCC’s report that the commercial relationships between these businesses are highly complex and there is a two-way value exchange at play, with news media providers and digital platforms both benefiting from the distribution of news content.

The Government agrees that the digital platforms need to do more to improve the transparency of their operations for news media providers as they have a significant impact on the capacity of news media organisations to build and maintain an audience and derive resources from the media content they produce.

The Government will address bargaining imbalances between digital platforms and news media businesses by asking the ACCC to work with the relevant parties to develop and implement a voluntary code to address these concerns.

The ACCC will provide a progress report to Government on code negotiations in May 2020, with codes to be finalised no later than November 2020. Any code will be considered binding on the parties who elect to sign up to it. If an agreement is not forthcoming, the Government will develop alternative options to address the concerns raised in the report and this may include the creation of a mandatory code.

Digital services, like those offered by digital platforms, operate in complex, technical markets based on rapidly evolving technology. There is a widely recognised need for competition regulators to develop and maintain expertise to keep up with these changes.

The Government will ensure that there is continued vigilance in digital platforms markets by funding the ACCC to continue to examine competition and consumer protection issues involving digital platforms.

In the 2019–20 Mid-Year Economic and Fiscal Outlook we are committing $27 million over four years for a Digital Platforms Branch within the ACCC. The Branch will monitor and biannually report on digital platforms, take enforcement action as necessary, and conduct inquiries as directed by the Treasurer, starting with an inquiry into competition for the supply of ad tech services and the supply of online advertising by advertising and media agencies.

The ACCC has proposed amendments to merger law to signal the importance of considering whether proposed mergers would remove a potential competitor and the nature and significance of the assets being acquired. The Government will commence a broad consultation process on the proposed amendments in 2020, noting that courts may already consider these matters in merger cases and that the proposed changes would affect businesses across the Australian economy and not just digital platforms. 

The ACCC has noted that Google is rolling out options in Europe to enable Android users to choose their default internet browser and search engine. The ACCC, through its Digital Platforms Branch, will monitor the impact of the changes in Europe and provide further advice to the Government. 

Safeguarding the media landscape 

The ACCC provided a detailed analysis of existing media regulatory frameworks and the differing requirements on traditional media businesses, such as free-to-air television, and on businesses which compete with them, such as internet-based content platforms.

The Government will commence a staged process to reform media regulation towards an end state of a platform-neutral regulatory framework covering both online and offline delivery of media content to Australian consumers. This is a large and complex reform, so we will work through the detail carefully, dividing the work into a number of stages, as the ACCC recommends, and consulting with affected stakeholders at each stage.

Commencing in 2020 our immediate focus will be on: • developing a uniform classification framework across all media platforms; • the extent of Australian content obligations on free-to-air television broadcasters (including drama and children’s content), and whether there should be Australian content obligations on subscription video-on-demand services; and • other aspects of the policy framework to support Australian film and television content.

In early 2020, the Government will release an options paper co-authored by Screen Australia and the Australian Communications and Media Authority that will look at how to best support Australian stories on our screens in a modern, multi-platform environment.

The second phase of reform, to commence later in 2020, will include a review of the advertising rules and restrictions across all delivery platforms, consideration of mechanisms to monitor and enforce the regulatory framework across all platforms, and other measures to remove redundant legislation and implement a coherent legal framework for consumers and for industry participants. The Government will make announcements about the details and process for the second phase measures once the process for phase one has concluded.

The Government recognises that public interest journalism is important to Australia’s democracy, and local and regional journalism is essential in informing and strengthening local communities. A sustainable and adaptable media sector is necessary to support the provision of such journalism.

The Government will enhance the Regional and Small Publishers Jobs and Innovation Package to better support the production of high quality news, particularly in regional and remote areas of Australia, with a particular focus on the production of public interest journalism that is at greatest risk of being under-provided.

The Government is committed to maintaining the health and vibrancy of the Australian Broadcasting Corporation (ABC) and the Special Broadcasting Service (SBS). The provision of nearly $3.2 billion and $887 million respectively, over the next three years, represents a substantial investment of public funds in our national broadcasters and will enable the ABC and SBS to provide television, radio and digital media services that fulfil their respective Charters.

Australia’s copyright system is critically important to our economy and our creative industries. An effective copyright framework underpins the work of Australian artists, musicians and creators, and balances the rights of these groups to generate a return on their investments with reasonable access to copyright works.

Enforcing copyright against digital platforms can be challenging. The Government does not support pursuing a mandatory take-down code managed by the ACMA, noting the concerns of both major copyright owners and users, and the potential unintended effects of a code across a diverse copyright market. To get the settings right, more data and further consultation with a broader range of copyright stakeholders, digital platforms and consumer groups is needed to determine appropriate options for reducing the availability of infringing material on digital platforms.

The Government committed to reviewing copyright enforcement reforms made in 2018 and this review will occur in late 2020. In the meantime, there are opportunities for copyright owners to continue to enhance their relationships with digital platforms and work to identify where and how improvements could be made to reduce infringing copyright material and promote access to quality Australian content.

The Government will not be making further changes to the tax settings to support public interest journalism at this time. There are a number of existing ways in which organisations that produce public interest journalism can seek deductible gift recipient (DGR) status and the Government’s current focus is on implementing the DGR reforms announced in December 2017 before considering further changes.

The Roadmap highlights -

Work in progress 

Recommendations 16(f) and 18: Developing legislation for public consultation to increase penalties under the Privacy Act to match Australian Consumer Law and require development of a binding online privacy code. The draft legislation will be released for consultation and subsequent to consultation introduced to Parliament in 2020. 

Recommendation 20: Consultation on a range of policy options to strengthen unfair contract term protections for small businesses from late 2019. 

Recommendation 21: Further work underway through Consumer Affairs Australia and New Zealand on how an unfair trading prohibition could be adopted in the Australian context to address potentially unfair business practices. 

Immediate actions 

Recommendations 4 and 5: Establish a new unit within the ACCC to monitor and biannually report on competition and consumer protection in digital platform markets, take enforcement action as necessary, and undertake an inquiry into the supply of ad tech services and online advertising. 

Recommendation 6: Stage 1 – work closely with affected stakeholders, and the ACMA, in addressing the priority reform areas • developing a uniform classification framework across all media platforms; • the extent of Australian content obligations on free-to-air television broadcasters (including drama and children’s content), and whether there should be Australian content obligations on subscription video-on-demand services; and • other aspects of the policy framework to support Australian film and television content. 

Recommendation 7: The ACCC to work with digital platforms and news media businesses to facilitate the development of a voluntary code to address bargaining power imbalances between these parties. 

Recommendations 16(a), (b), (c) and (e): The Government will consult on these recommendations during consultation on the Government’s Privacy Act amendments announced in March 2019 to increase penalties under the Privacy Act to match Australian Consumer Law penalties and require development of a binding online privacy code. 

Recommendation 17: Commitment to a review of the Privacy Act to ensure it empowers consumers, protects their data, and best serves the Australian economy. 

Work over 2020 

Recommendation 1: Undertake public consultation on the proposed amendments to mergers law. 

Recommendation 5: ACCC to deliver preliminary report on the ad tech inquiry. 

Recommendation 6: Stage 2: • A review of advertising rules and restrictions across all delivery platforms • Consideration of mechanisms to monitor and enforce the regulatory framework across all platforms; and • Other measures to remove redundant legislation and implement a coherent legal framework for consumers and industry participants. 

Recommendation 7: The ACCC to provide a report to Government on the progress of negotiations on a voluntary code between digital platforms and news media businesses by May 2020. The code is to be finalised by November 2020. 

Recommendation 8: Review of Government’s 2018 copyright enforcement reforms , including evaluating opportunities for facilitating online copyright enforcement. 

Recommendation 10: The Government will enhance the Regional and Small Publishers Jobs and Innovation Package to better support the production of high quality news, particularly in regional and remote areas of Australia, with a particular focus on the production of public interest journalism that is at greatest risk of being under-provided. 

Recommendation 12: The Government will develop a proposal to establish a network of experts and organisations to develop media literacy materials around a common framework prioritising students, older adults and other vulnerable people 

Recommendation 13: The Government will seek to have news and media literacy included within the scheduled review of the Australian curriculum. 

Recommendations 14 and 15: The Government will ask the major platforms to develop a code (or codes) of conduct for disinformation and news quality. The ACMA will oversee the development of the codes and assess the adequacy of each platform’s measures. 

Recommendation 17: Review of the Privacy Act commences. 

Recommendation 20: Decision on policy options to strengthen unfair contract terms. 

Recommendation 21: Decision on policy options on an unfair trading prohibition.

Recommendations 22 and 23: Government to work with major digital platforms to scope and implement a pilot external dispute resolution mechanism for complaints between consumers, businesses and digital platforms. 

Work over 2021 

Recommendation 3: Monitor and report back on Google’s rollout of options in Europe to allow consumers to choose their default internet browser and search engine. 

Recommendation 5: ACCC to deliver final report on the ad tech inquiry 

Recommendation 7: ACCC to report on whether the major digital platforms and news media businesses are likely to reach agreement on a suitable code. If sufficient progress has not been made, the Government will develop a proposal to address the outstanding concerns. 

Recommendations 14 and 15: The Government will evaluate the effectiveness of the voluntary code (or codes) of conduct. If the voluntary measures are failing to adequately mitigate the problems of disinformation or news quality online, the Government will consider the need for further actions. 

Recommendation 17: Review of the Privacy Act completed. 

Recommendations 22 and 23: The Government will evaluate the effectiveness of the pilot scheme, subsequent industry-led developments and the outcomes of the ACCC’s inquiry into ad tech services and online advertising agencies to the extent that they relate to the impact of advertising on small business. Taking these matters into account, the Government will consider the merit of establishing a Digital Platforms Ombudsman on an ongoing basis, and the case for further regulatory intervention.