Nicola Roxon (Gellibrand, Australian Labor Party, Shadow Attorney-General) Share this | Hansard source

The Royal Commissions Amendment Bill 2006 can be summed up in four short words: too little too late. It is too little because it does nothing to address the key obstacle to Commissioner Terence Cole uncovering the whole truth about the ‘wheat for weapons’ scandal—that is, his restrictive terms of reference. It is too late because the little it does do really should have been done months ago. Labor recognised the problem in March, only to be scoffed at by the Attorney-General. If the Attorney had been doing his job he could have acted to deal with this issue three months ago, avoiding the expense and delay of the Federal Court case which told the government what Labor had told them for free—that we need action to stop the abuse of legal professional privilege to obstruct the inquiry.

Having recognised the problem in the first place, Labor of course supports the bill to remedy the problem. However, it should be clear to all members of this House that this bill is no solution to the real problem affecting Commissioner Cole—that is, his restricted terms of reference. This bill will make amendments to the Royal Commissions Act 1902 and the amendments will have effect for the current inquiry into the involvement of Australian companies in the UN oil for food program. That is why we are dealing with this legislation urgently.

But the bill will also have a more lasting effect for all commissions exercising powers under the act, and I want to use this opportunity to consider some of the implications of that. First, let me explain what this bill does and why it has the opposition’s support. It is a relatively straightforward bill that will provide a special procedure for commissions to determine the validity of claims for legal professional privilege over documents that a commission seeks. Legal professional privilege, as many in this House would know, is a common law rule of evidence that prevents courts from requiring the production of evidence that would disclose confidential communications between a lawyer and a client.

This is an important principle of justice, as clients should feel free to provide full instructions to their lawyer so that the lawyer can provide complete and accurate advice. This freedom is compromised if clients fear that their instructions could subsequently be used against them in court. However, legal professional privilege does not apply to all communications between a lawyer and their client. In order to attract the privilege, the communication must have been made either with the dominant purpose of obtaining legal advice or in relation to actual, pending or reasonably anticipated litigation. As a result, not every claim for legal professional privilege is a valid one. It concerns me that we may be seeing an increasing trend for some companies and some lawyers to make exaggerated claims for privilege or to conduct certain business affairs in the presence of lawyers simply to form the basis for a later claim for privilege. We have seen examples of this in the current AWB case and, to some extent, in the James Hardie case before that and in a number of other cases that have been in the media over the past few years.

The parliament needs to send a strong message that this is not on. To protect the privilege, we cannot allow it to be misused. Legal professional privilege is intended to be a safeguard in our system of justice, which relies on candour between lawyers and clients. But it is not meant to be a cloak to hide unlawful conduct. So this bill goes some way to sending the message that, by streamlining the process for assessing claims of privilege in the context of royal commissions, this can be achieved. This should be a disincentive to trumped up claims by ensuring that the onus to pursue privilege claims lies with the claimant, not with the commission.

The bill will provide that legal professional privilege remains a reasonable excuse for failing to provide a requested document to a commission only if either a court or a member of the commission has accepted that the document is privileged. However, under this bill a member of the commission would be empowered to demand by written notice the document for inspection. Inspection could be made either by the member or by a person authorised by the member—for example, some type of adviser. If the claim is accepted, the commission would be required to disregard the document for the purposes of any report or decision that the commission makes.

The bill also creates new penalties for failing to produce a document once a commissioner has rejected a claim for privilege or for failing to produce a document required for determination of a privilege claim. In both cases the penalty would be $1,000 or six months imprisonment, which is consistent with existing penalties for failures to produce documents. It would be a reasonable excuse for not providing the documents if a court had previously found that they were subject to legal professional privilege.

Why is this bill necessary? It is necessary because of issues that have already been discussed widely in the AWB case, and it is necessary expressly because of the Federal Court case involving the Cole commission—that of AWB Ltd and Cole. This case involves precisely the sort of exaggerated claim for privilege I have been talking about. AWB claimed privilege over the now infamous ‘draft statement of contrition’, which had been produced in December 2005. Commissioner Cole determined that privilege did not attach to the document and that there was no reasonable excuse for it to be withheld. AWB then applied to the Federal Court to order Commissioner Cole not to use the document. The Federal Court found that the document was not subject to privilege, on the rudimentary ground that it had not been produced and circulated for the dominant purpose of obtaining legal advice. In short, it was produced for the purposes of public relations advice, not legal advice.

The court also agreed with Commissioner Cole that the Royal Commissions Act empowers the commission to determine whether or not a document is subject to privilege. However, the court cast serious doubt over whether the commissioner also has the power to demand to inspect a document in order to make a determination on the claim of privilege. Ultimately, the court did not make a binding determination on this issue. But it did point out that, in principle, the privilege would prevent the commission from inspecting a document over which the privilege is claimed and that any abrogation of legal professional privilege to allow such inspection could only be made by ‘clear and unmistakable language’ in the Royal Commissions Act, not merely by implication.

So that is the vital change this bill makes, using the clear and unmistakable language referred to by the court. In providing a special process, it makes it crystal clear that a commissioner can demand to see a document in order to make his determination over whether it can be admitted into evidence. The fact is that determining whether or not a document meets the ‘dominant purpose’ test of legal professional privilege often requires the decision maker to see the document itself. This is not an uncommon process in the courts.

I note that the Law Council has raised some concerns about this process. It is worried that inspection of a document that is later held to be privileged could nonetheless ‘pollute the mind’ of the commissioner when he comes to write his report. This is a valid concern, and so some caution is sensible. It is also sensible to be concerned about the potential removal of this protection, when you consider the conduct of the Howard government in using very politicised commissions of inquiry on other matters. When forced to establish a commission into an area that could expose wrongdoing or incompetence by coalition members, the government have restricted the terms of reference to keep the inquiry away from sensitive areas. But they were quite open to using commissions of inquiry as witch-hunts to harass the labour movement, such as in the building industry royal commission or in the Centenary House inquiry. When the executive uses commissions of inquiry as partisan tools, I am very wary about granting them too many powers.

On the other hand, I am convinced that the bill comes with enough safeguards to protect against the particular problem the Law Council refers to. I want to touch on those protections. Firstly, the bill makes it clear that the commissioner must disregard the contents of a document for later decisions once it has decided that it is actually a privileged document. As I said, this is similar to the process used by judges in other courts. Secondly, the bill allows the commissioner to authorise a third party to inspect the document in order to advise the commission on whether or not a document is privileged. This option could be exercised where it is a sensitive issue and the commissioner is concerned about the live possibility that inspection of the document could compromise the inquiry. Again, that can be referred to an adviser or someone else—similar to the common process in which judges may refer claims of privilege to other judges for determination when matters are in their courts.

Finally, and most importantly, the bill makes no attempt to limit the claimant’s right to have the privilege determined once and for all by a court. The bill provides very clearly that privilege determined by a court is definitive on the issue and is a reasonable excuse for refusing to provide a document to a commission. Accordingly, if a party genuinely believes that a document is privileged and would compromise the inquiry, they may seek a court order to protect them. This erects a hurdle that exaggerated claims will rarely overcome, but it does not undermine those genuine claims that might be made.

So, on balance, I am convinced that the bill merely streamlines the process by putting the onus for commencing litigation on the claimant, not the commission. This should deter false and exaggerated claims as well as reduce the incidence of litigation during the life of the commission and the expense and delays that go with it. I want to emphasise that the bill does not in any way affect the substance of legal professional privilege or the protection it affords lawyer-client communications if it is properly claimed.

According to the government, Commissioner Cole has said he expects to need more documents that are subject to privilege claims, so the passage of this bill will have an immediate streamlining effect for the remainder of the commission’s life. If that is so, Labor is prepared to offer its support for the urgent passage of the bill—and that is why we are debating it tonight after it was introduced only last week. The bill is correct in policy so, if it is helpful to Commissioner Cole for it to be passed quickly, it ought to be passed quickly.

Having described what the bill does, I want to make it absolutely clear to the House what the bill does not do. The bill does not remove the obstacles to a full investigation by Commissioner Cole into the ‘wheat for weapons’ scandal. The bill does not address the restrictive terms of reference through which the government has restricted the inquiry. The bill does not demonstrate any serious commitment to a full, open and transparent inquiry into what really happened behind the Iraq kickbacks scandal and how deeply the government was embroiled. So, at this point, I move:

That all words after “That” be omitted with a view to substituting the following words: “whilst not declining to give the bill a second reading, the House notes:

(1)

that the Opposition demanded action to prevent the abuse of legal professional privilege in the Inquiry into certain Australian companies in relation to the UN Oil-For-Food Program (the Cole Commission) in March;

(2)

that the Attorney-General arrogantly rejected that demand at the time and incompetently waited almost three months, after a Federal Court case, before taking action with this bill;

(3)

that, while this bill proposes a sensible, albeit late, change to the law, it will not solve the broader problem that the Cole Commission’s Terms of Reference are limited;

(4)

that the current Terms of Reference do not allow the Cole Commission to make findings on whether or not Ministers, their offices and departments have discharged their duties under Australian administrative law and under international law (in particular UN Security Council Resolution 661);

(5)

that the Cole Commission has provided written advice that a change to the current Terms of Reference which would allow the Cole Commission to make such determinations is a matter that would be ‘significantly different to the existing Terms of Reference’ and is therefore a matter for the executive; and

(6)

that if the Howard Government had nothing to hide in the $300 million ‘wheat for weapons’ scandal, it would expand the Cole Commission’s Terms of Reference to allow Commissioner Cole to make such determinations”.

Whether this bill passes or not, Australians can have no faith that the Cole royal commission will get to the whole truth of this shameful episode. The reason for that is that the government has imposed terms of reference that restrict the inquiry. These terms are blinkers designed to deprive the inquiry of its peripheral vision, where, if it focused its attention, it would discover coalition ministers everywhere—the Minister for Foreign Affairs, the Minister for Trade and even the Prime Minister himself—failing in their responsibility to protect the good name of Australia. The commission cannot inquire into whether the Australian government or its officers or ministers breached administrative law or international law. In other words, Commissioner Cole is not looking into whether government ministers turned a blind eye to, or were involved in, a systematic operation to undermine the Iraq sanctions regime. That is the question which should preoccupy this House. It is an issue which goes to the heart of the integrity and competence of this tired, old government.

Let us not forget what happened. An Australian company—not just any old company, but a company which was for some of the time Commonwealth owned and which to this day retains a Commonwealth-sanctioned monopoly on the export of wheat—paid over $300 million in kickbacks to the regime of Saddam Hussein. At the same time, Australia was party to the United Nations sanctions against Iraq and the Australian government was preparing for war against Iraq to remove its dictator. The bottom line is that, while the Australian government was asking our young men and women in the Navy to participate in a blockade against Iraq, AWB was undermining the efforts of those sailors by paying kickbacks to prop up the very same regime. What an insult to the sacrifices those sailors made! They were serving our country—many thousands of kilometres from home, many thousands of kilometres from loved ones—and trying to enforce sanctions.

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