Industry Advocate Bill

HANSARD LEGISLATIVE COUNCIL
TUESDAY 17TH OF OCTOBER 2017

Industry Advocate Bill

Committee Stage

In committee.

Clause 1.

The Hon. T.A. FRANKS: Since we last debated this bill, I have received a significant number of pieces of correspondence, and I simply want to draw the chamber's attention to that correspondence. The Greens will be opposing the proposed amendments currently filed by the Australian Conservatives and the opposition.

The first piece of correspondence is from Andrew Clarke of the Master Plumbers Association of South Australia, who notes in his email of 15 October to the Industry Advocate that the association would like to support the Industry Advocate Bill. The email goes on to state that they do not support the amendments that have been proposed. They feel the amendments would detract from the original intent of the bill and express their members' belief that they want this bill to pass and pass quickly. Certainly, Andrew Clarke, the executive officer of the Master Plumbers Association of South Australia, has made that clear.

I also note that Larry Moore, of the National Electrical and Communications Association (SA/NT chapter), indicates that they do not support the proposed amendments to the Industry Advocate Bill, which from their viewpoint would seriously impede the effectiveness and intent of the proposed legislation, and urges similar swift passage of this bill. This bill, the Greens believe, would be knobbled should the amendments filed by the opposition and the Australian Conservatives be upheld, and we will be vehemently opposing them.

The bill has strong support across the sector. For those members who are not aware, it has received quite widespread support. Indeed, it is supported by the Australian Industry Group, it is supported by Business SA, and it is supported by a joint select committee of the federal parliament, authored by one Nick Xenophon. It is supported by OneSteel Manufacturing and Integration. It is supported by Best Bricks and Pavers. It is supported by Bowhill Engineering, and it is supported by KW Wholesale Stationers, no stranger to this place for the effect that decisions to not employ local procurement practices had on that particular company. Indeed, I am happy to see that that company continues to thrive with a different attitude from government.

It is supported by the Civil Contractors Federation; it is supported by Zancott Knight Facilities Management; it is supported by Vintek; it is supported by Sage Automation; it is supported by the Australian Steel Institute; it is supported by Consult Australia; it is supported by the Australian Subcontractors Association; it is supported by the Air Conditioning and Mechanical Contractors' Association of South Australia; and, indeed, today it is strongly supported by the Greens. We welcome the reintroduction of debate into this place on this bill and wish its speedy passage.

The Hon. D.G.E. HOOD: I rise to indicate the Australian Conservatives will also be supporting the passage of the bill today and that I will be withdrawing the amendments in my name to clauses 13 and 16 following consultation with the groups that the Hon. Ms Franks has mentioned, and others. We are satisfied that the bill is broadly supported, and also, following consultation with the Industry Advocate himself, Ian Nightingale, I am satisfied that he is strongly supportive of the bill and that there is broad support for the bill to proceed. As such, we will be supporting it today.

Clause passed.

Clause 2 passed.

Clause 3.

The Hon. K.J. MAHER: I move:

Amendment No 1 [SusEnvCons–1]—

Page 3, after line 16 [clause 3, definition of procurement operations, (a)]—After subparagraph (ii) insert:

(iii) the delivery of a service by a third party on behalf of the authority; or

This amendment seeks to change the definition of 'procurement operations' in clause 3 of the Industry Advocate Bill to be consistent with the changes proposed for the State Procurement Act. The proposed change to the definition of procurement operations specifically includes the delivery of the service by third party on behalf of government and excludes funding classified as grants in accordance with the Treasurer's Instructions.

The scope of the Industry Advocate Bill includes as part of the scope of government contracts projects receiving state government funding or assistance separately from procurement operations, therefore the changes proposed to the State Procurement Act will not affect the scope and coverage of the Industry Advocate Bill.

Amendment carried.

The Hon. K.J. MAHER: I move:

Amendment No 2 [SusEnvCons–1]—

Page 3, line 22 [clause 3, definition of procurement operations]—Delete 'operations excluded from this definition by the regulations;' and substitute:

(e) the provision of funding to a third party by the authority that, in accordance with Treasurer's instructions, is classified as a grant; or

(f) operations excluded from this definition by the regulations;

Amendment No 3 [SusEnvCons–1]—

Page 3, after line 37—Insert:

Treasurer's instructions means instructions issued by the Treasurer under Part 4 of the Public Finance and Audit Act 1987.

These amendments go to the same topic that I spoke about before in terms of the definition of procurement operations.

Amendments carried; clause as amended passed.

Clauses 4 to 12 passed.

Clause 13.

The Hon. R.I. LUCAS: I move:

Amendment No 1 [Lucas–1]—

Page 7, after line 32—Insert:

(3a) A participant cannot be compelled to give information or a document under this section if—

(a) the participant is a party to a dispute or complaint (however described) in respect of a government contract; and

(b) the information or document is relevant to the dispute or complaint; and

(c) disclosure of the information or document would materially affect the participant's position in the dispute or complaint.

(3b) A participant cannot be compelled to give information or a document under this section if the information or document—

(a) has commercial value to, or relates to the commercial or financial affairs of, the participant; and

(b) disclosure of the information or document—

(i) may cause damage to the participant or the interests of the participant; or

(ii) may confer an unfair commercial or financial advantage on a person.

This amendment, and the amendments being moved by the Liberal Party, came as a result of discussions the Law Society raised with the shadow attorney-general in a range of discussions. The Law Society expressed some concerns about aspects of the legislation and the Liberal Party accepted the position that was argued by the Law Society and the shadow attorney-general that there was substance to the arguments that have been raised about the extent of the powers in relation to the operation of the bill.

As I indicated in the second reading, the Liberal Party's position is to support the legislation, but nevertheless is proposing these three amendments. This is the first of those. The shadow attorney-general and the Law Society have pointed out that what this particular aspect of the legislation—that is, clause 13—does is allow the government via the Industry Advocate to demand, under the threat of penalty or a major fine, documents for information when that party may already be in litigation with the government.

The argument from the Law Society is, essentially, that there may well be a dispute between a party and the Industry Advocate, which may well be going through the courts in terms of litigation, and that in some way this particular power would allow the Industry Advocate to demand, under the threat of penalty, various documents which might be the subject of that litigation with the government. As the shadow attorney-general summarised in her contribution in the House of Assembly, 'It is a backdoor disclosure of discovery processes that is completely unacceptable.'

That is the essential problem that the Law Society has highlighted to the shadow attorney and the Liberal Party, and this particular amendment seeks to correct that particular issue.

The Hon. K.J. MAHER: I rise to indicate that the government will be opposing the amendment. One of the main statutory mechanisms in the bill to assist the Industry Advocate to perform his functions is the power to require information. The proposed amendment will prevent the Industry Advocate from exercising his power to compel information required to investigate and resolve a complaint under clause 6 of the bill, as well as the Industry Advocate's ability to perform functions as an advocate more broadly under the bill.

Industry seems to be as stunned as we are about why these amendments are being proposed. Phil Sutherland from the Civil Contractors Federation says, in relation to this, 'What is being proposed will seriously hamper the efforts of the Industry Advocate and in some cases make the role almost unworkable.' Christopher Rankin from the Air Conditioning and Mechanical Contractors' Association sets out the impact of these amendments when saying:

In the building and construction industry the government is a large client of all industry participants, and as such must be accountable like any other participant. Practically, such an amendment would leave the way open for government and businesses to use this proposed amendment to 'frustrate' the work of the [Industry Advocate].

Grant Eckert from KW Wholesale Stationers sums up what is the widespread industry view:

The amendments seem odd, and we fully understand the negative influence this would have.

The way in which the Industry Advocate can use and disclose information disclosed to him is already limited by:

the functions set out in clause 6 of the bill;

the confidentiality requirements under clause 16 of the bill; and

the general principles of administrative decision-making.

The proposed amendments refer to disputes or complaints, however described. This is very broad and would likely encompass a complaint made by a participant in a government contract to the Industry Advocate under clause 6. Accordingly, this would create an anomalous result whereby the information required to resolve the complaint becomes exempt under clause 13(3a).

Essentially, the real world impact of this amendment is that companies that know they are failing to meet their obligations under the industry participation plan could simply claim that they were having a dispute with the Industry Advocate, thus locking the Industry Advocate out of obtaining that information and performing the essential roles of ensuring contractors meet their original binding commitments. This amendment would leave the Industry Advocate's position in an even weaker place than it is currently as a non-statutory role.

Steve Jones from the Bedford Group sums up industry sentiment about this amendment when he says:

It weakens the role of the Industry Advocate to the point that these changes will make it ineffective and undo the gains made by the office, changes that have helped SA business immensely. The original proposal really supports SA businesses at a time when we have a high level of unemployment…and it needs to be addressed, this is one vehicle to assist that.

The Hon. J.A. DARLEY: For the record, I indicate that I will oppose all three of the opposition's amendments.

The Hon. D.G.E. HOOD: I must confess that I was originally somewhat attracted to these amendments, going back when they were initially filed and touted. However, during the course of consultation, again as the Hon. Ms Franks indicated, there has been a great deal of industry support for the bill to remain as is. It is very broad support, quite to my surprise originally, right from the industry groups to some of the companies involved and some of the umbrella organisations. So, having consulted very broadly on this, we have come to the position of not supporting the amendments.

The Hon. T.A. FRANKS: The Greens will be opposing these amendments.

Amendment negatived; clause passed.

Clause 14 passed.

New Clause 14A.

The Hon. R.I. LUCAS: I move:

Amendment No 2 [Lucas–1]—

Page 8, after line 14—Insert:

14A—Review of certain decisions by South Australian Civil and Administrative Tribunal

(1) The South Australian Civil and Administrative Tribunal is, by force of this section, conferred with jurisdiction to deal with matters consisting of the review of a decision of the Industry Advocate under section 13 to require a participant to give the Industry Advocate information or documents (a reviewable decision).

(2) An application for review of a reviewable decision may be made to the South Australian Civil and Administrative Tribunal by the participant to whom the requirement relates.

(3) An application for review of a reviewable decision must be made within 14 days after the participant is notified of the requirement under section 13 (or such longer period as the Tribunal may allow).

(4) However, the South Australian Civil and Administrative Tribunal may only allow an extension of time under subsection (3) if satisfied that—

(a) special circumstances exist; and

(b) another party will not be unreasonably disadvantaged because of the delay in commencing the proceedings.

I move the amendment on behalf of the Liberal Party. Again, as I indicated earlier, this was as a result of discussions between the Law Society and the shadow attorney-general. This is, as described in the debate in the House of Assembly, an administrative law function—as the shadow attorney-general described it. It essentially applies an appeal mechanism to review an Industry Advocate’s notice.

Ultimately, if SACAT decided that it agreed with the Industry Advocate, then the impact of the Industry Advocate’s notice would sustain. However, if it was an unreasonable notice, SACAT obviously would have the power to not agree with the Industry Advocate’s position. So, essentially, all it is seeking to do is to provide an appeal mechanism against what might have been an unreasonable decision of the Industry Advocate.

I think it is fair to say that there is no perfect operation of a perfect public sector position such as the Industry Advocate. All of us are capable of making errors of judgement, at the very least, and all this is essentially seeking to do is that if an error of judgement or something worse has occurred in relation to a decision, there is an appeal mechanism available to somebody for an aggrieved party.

The Hon. K.J. MAHER: The government opposes the amendment. As clause 13 is currently drafted there would be very limited circumstances in which a person seeking a review by SACAT would be entitled to relief from a request to provide information or documents; for example, if the Industry Advocate sought privileged information, information that tends to incriminate a person, or information that was clearly not connected with the performance of the Industry Advocate’s functions.

In practice, informal communication between a participant and the Industry Advocate is likely to be a more effective and convenient means for a person to seek the same relief as SACAT, with less cost to participants in government contracts and the Industry Advocate. As it currently operates, a failure to comply with the direction would be prosecuted as a summary offence in the South Australian Magistrates Court, a low cost and open legal forum with significant experience and expertise. A balance between the benefit that will arise from the use by the Industry Advocate of the information versus the perceived detriment to the participant from disclosure to the Industry Advocate is struck by the interaction between clause 13 and clause 16’s confidentiality provisions.

Again, many businesses have indicated that they find it difficult to understand the need for review powers by SACAT when the Industry Advocate Bill is simply establishing the need for contractors to prove that they are meeting the commitments they have made. Christopher Rankin, of the Air Conditioning and Mechanical Contractors’ Association, notes:

…conferring jurisdiction on the South Australian Civil and Administrative Tribunal (‘SACAT’) to review a decision of the Industry Advocate, to require a participant to give the Industry Advocate information or documents. AMCA consider that this amendment will increase costs to all participants in the industry and the OIA.

Keith Gillard from Business Aspect says:

Having looked at the SACAT role and question what practical difference there is between them and the Magistrates Court?...I feel the latter will likely drive greater compliance by small to medium business than the tribunal. Larger organisations will play hardball regardless.

New clause negatived.

Clauses 15 and 16 passed.

Clause 17.

The Hon. R.I. LUCAS: I move:

Amendment No 3 [Lucas–1]—

Page 9, lines 7 to 12—Delete clause 17

I must admit that, again, this was as a result of discussions between the Law Society and the shadow attorney-general, but I am intrigued by the extent of the desire of the government to prevent from scrutiny access to information under freedom of information about the operations of the Industry Advocate.

Can we hasten to say that under the proposed amendment, but clearly even under the existing arrangements, commercially confidential information in relation to a business is perpetually being refused to freedom of information applicants on a daily basis. Any of us in this chamber who have used the current freedom of information laws know that we are told regularly that we cannot get access to information because it is a private interest, a personal interest, or it is commercially confidential to an individual operator, individual or an individual company. So, there are clearly existing powers under the legislation, as it exists, and it is often used to refuse information.

If, for example, at some stage in the future the Industry Advocate were to correspond with his or her minister and say, 'I think that a government procurement operation or a new policy that the government has announced is unfairly impacting on business operations in South Australia or is having this deleterious effect and I urge the minister and the government to do something about it,' in essence, that sort of correspondence, information and view of the Industry Advocate would be prevented from being accessed by freedom of information. For the life of me, I cannot work out why any member would want to keep information along those lines from being accessed by freedom of information.

I understand the need to keep commercially confidential information commercially confidential, although I think that particular provision has been abused, I suspect, by governments of all persuasions over the years; nevertheless, it is there and it is an available protection. There are also other protections within the legislation that would prevent the release of information.

What is proposed here is that the Industry Advocate can release statistical information and aggregate information and that sort of general stuff, which is fine. We see the same thing in the Small Business Commissioner's reports and the Industry Advocate reports in terms of the overall level of work and undertaking, etc. However, there is a variety of other examples, only one of which I have highlighted, where I cannot see why that sort of information should be hidden by a government that wants to keep that information hidden.

It does not impact on the access of individual companies to procurement contracts. It does not prevent the Industry Advocate from doing his or her work in terms of assisting small business, but if the Industry Advocate were to express a negative view about a government policy or a range of government policies in relation to the operation of the office or, for example, the staffing of the Office of the Industry Advocate, if at some stage the government of the day decided to apply an efficiency dividend or reduce the funding or apply a particular public sector policy to the Industry Advocate which he or she might think would impact negatively on the operations of the Industry Advocate, and the Industry Advocate corresponds with the minister expressing that particular view, why would members in this chamber want to keep that information secret?

The government clearly would. They do not want it out. The Industry Advocate wants to keep his or her position so they are not going to release the information publicly; or they may take the view, not inappropriately I might say, that, as a senior executive, that is the sort of view they would express to the minister of the day and the government of the day and that it is not their role to put that into the public arena. That is what we have freedom of information laws for, so that sort of uncomfortable and embarrassing information that might be available within an agency such as the Industry Advocate statutory authority should be available.

We exempt agencies like the courts and others for obvious reasons, but the Industry Advocate is nothing like that in relation to its operations. Many other statutory authorities—SA Water, for example, and there is a long list of statutory authorities in the back of Budget Paper 3—do not have this particular exemption. A small number do, but the majority of them do not. I, for the life of me, do not understand why members would want to keep that sort of information secret and unable to be accessed under freedom of information.

The Hon. K.J. MAHER: The government opposes this amendment. Very simply, clause 17 is drafted as an exemption so that the advocate can treat sensitive commercial information as just that: sensitive information. Again, I will refer to a number of the industry participants. Christopher Rankin, from the Air Conditioning and Mechanical Contractors' Association, says:

Such an amendment is not required, the partial exception is to keep confidential information provided by businesses exempt from FOI applications – the normal administrative and financial operations of the Industry Advocate would be subject to FOI applications.

It is important to note that the Small Business Commissioner has an almost identical partial exemption from FOI requests. The wording in the Small Business Commissioner's freedom of information exemption came out of negotiation at the time with Liberal Party members of the Legislative Review Committee when they were dealing with the establishment of the Small Business Commissioner exemption regulation. As part of the negotiation for that position, it was agreed that the Small Business Commissioner's administrative and financial operational information and statistical information that does not identify any business should not be protected from an FOI request.

The same arrangements are proposed under this scheme. Again, a large number of businesses have voiced their complete opposition to this amendment on the basis that it would deter businesses from tendering for government projects due to concerns that their commercially sensitive information would be put out into the open. One concern often raised with the Industry Advocate is that general FOI provisions, although exempting some information, still leave enough information intact to allow the reader to fill in the blanks. Neil Howells, from Hudson Howells, notes:

The deletion of the partial exemption for the Industry Advocate from the operation of the Freedom of Information Act…from the Bill has the potential to be a significant disincentive for businesses tendering for government contracts. The outcome of this would be that government fails to get access to optimum suppliers. Again the risk is that it places government at a financial disadvantage and the state at an economic disadvantage.

Clause 13 of the Industry Advocate Bill gives the Industry Advocate the power to request highly confidential and commercially sensitive information from businesses participating in government contracts. It is not appropriate to expect businesses to rely on the government's ability to exclude a document from an FOI request on the basis of the exemption for documents affecting business affairs under the Freedom of Information Act itself.

The need for the partial exemption that is proposed in section 17 of the bill is strongly supported by industry on the basis that businesses need to be assured that commercially sensitive information will be exempted from FOI requests. That is probably best summed up by Grant Eckert, from KW Wholesale Stationers, who has indicated that:

We would be uneasy providing the Industry Advocate with commercially confidential information that could surface at a later date and subsequently be accessed by our competitors.

The Hon. T.A. FRANKS: The Greens will be opposing this amendment. I appreciate the Hon. Rob Lucas's ability to create an enormous straw man and his brilliant sophistry. I am not in any way convinced by his need to find what he has termed 'embarrassing information'. We are here to protect local jobs and local procurement, and that is more important than the ability for accessing potential political pointscoring exercises.

The Hon. D.G.E. HOOD: I am attracted to this amendment on a number of levels, but when consulting with industry on this particular amendment—as we have, quite extensively—I have not found any support amongst any of the industry bodies or companies themselves for this amendment, to my initial surprise. When one thinks through their reasons for wanting to oppose an amendment like this, I guess you can see from their perspective why it might be significant. It is a very difficult one, because in almost 12 years in this place I do not think I have ever voted to in any way curtail freedom of information access, but I believe there may be significant enough circumstances in this particular instance to do that. So, we will be opposing the amendment, I must say with some discomfort about it, but that is our position.

The Hon. R.I. LUCAS: I just rise to respond to a couple of the comments. I am, firstly, very disappointed at the position the Greens have adopted in relation to this—that they are supporting a position which restricts access to documents under freedom of information. Certainly, on behalf of the Liberal Party, I reject strongly the notion that using freedom of information is only for political pointscoring. I am sure the Greens, as does the Liberal Party, use freedom of information to try to get to the truth and the facts of a situation. I am sure the Hon. Mr Parnell and the Hon. Ms Franks are users of freedom of information laws, and their purpose for using freedom of information is not political pointscoring, I am sure; it is to try to get to the truth and the facts of a situation.

As I said, if an industry advocate was strongly opposed to particular government policy, what is the dilemma or the problem in actually being able to access that sort of information, and how wouldn't it assist a public debate, if some future government was adopting a policy which was going to be anti the operations of the Industry Advocate, anti-jobs, anti-small business—even though they had established this particularly body they were nevertheless adopting a policy which was going to circumvent the role of the Industry Advocate in some way?

So, I am disappointed in the position of the Australian Greens and in particular the assertion that this is only being done to get information for political pointscoring. I certainly reject that. We use freedom of information to try to get facts and the truth and put it in the public arena and then let people make their own judgements in relation to what the facts are. We think this government for too long—for 16 years too long—has used freedom of information laws to suppress the release of information, and we think this is just one further step down that path.

On the second point I would like to make, I accept the position that industry groups have put to the government and to other members of this chamber, but can I say that that has been as a result—and I have had a discussion with a couple of them—of their having been told that the impact of these particular amendments would mean that their commercial-in-confidence information would be released. I just said to them, 'Well, that's a nonsense,' but I accept that that is what the government and those who support the bill have said to them and put to them, that this particular amendment would stymie the operations of the Industry Advocate and that their confidential commercial information would be made public.

As I have indicated before, and as any of us who have used the freedom of information laws know, there are very significant barriers within the existing laws in the commercial confidentiality area, where every day of the week we get refusals from the government on the basis that it is commercial and confidential. We do not get copies of contracts, we do not get copies of tender documents, we do not get copies of commercially confidential information on a whole range of issues. I am sure the Australian Greens and the Australian Conservatives in this chamber would have any number of examples where information has been refused.

The existing laws make it clear that commercially confidential information is not to be released unless there is some overwhelming public interest, and the only way you are ever going to establish that generally is an 18-month battle with the Ombudsman—after an internal appeal, to then get to the Ombudsman, and the Ombudsman might then force the release, and then the government might still take you to court in terms of not wanting to release that particular information.

I accept that the numbers are not with the Liberal Party on this issue, but I wanted to correct the record—from our viewpoint, anyway—that this is certainly not a political point-scoring exercise at all. In relation to any commercially confidential information being released, we do not believe the impact of this would have been any different than the current operations of the freedom of information legislation.

Amendment negatived; clause passed.

Remaining clause (18) and title passed.

Bill reported with amendment.

Third Reading

The Hon. K.J. MAHER (Minister for Employment, Minister for Aboriginal Affairs and Reconciliation, Minister for Manufacturing and Innovation, Minister for Automotive Transformation, Minister for Science and Information Economy) (16:21): I move:

That this bill be now read a third time.

Bill read a third time and passed.

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