Arch Bevis (Brisbane, Australian Labor Party, Shadow Minister for Homeland Security) Share this | Hansard source

I rise to speak on the Customs Legislation Amendment (Augmenting Offshore Powers and Other Measures) Bill 2006. I would firstly like to note that Labor support the bulk of the bill and the general thrust contained within it. However, we are, at the same time, concerned about a number of aspects of the bill and we are hopeful that the government will take up the recommendations of the Senate Standing Committee on Legal and Constitutional Affairs, which has given this matter careful consideration.

Before I outline the problems Labor has with the bill, I will give a brief overview of the four schedules. This is an omnibus bill. Schedule 1 contains the meat of the bill: the new search and seizure provisions for Customs. These new powers essentially allow Customs officers, upon boarding a ship, to immediately conduct a search for weapons, for items that may assist a person to escape detection and for evidence of the commission of a particular offence. The search and seizure power will be automatic—that is, there will be no need for Customs officers to form a reasonable suspicion in order to access it. The types of searches that will be allowed include those up to a frisk search.

The new powers allow Customs officers to take and retain possession of goods and documents that have been uncovered during the search. In certain circumstances, items and documents confiscated during these searches may be used as evidence at a subsequent trial. These items and documents may be used as evidence in a range of circumstances. Where the ship or aircraft is boarded in Australia, the seized materials may be used as evidence of the commission of an offence, either inside or outside of Australia, against the Customs Act, division 307 of the Criminal Code—that is, import-export offences—or an act prescribed consistently with the United Nations Convention on the Law of the Sea. Similar provisions apply to cases where the boarding occurs outside Australia, with the exception that the seized materials may only be used as evidence for the commission of an offence inside Australia. In addition, it may be used as evidence of the commission of an offence inside Australia’s exclusive economic zone against an act prescribed consistently with the UN Convention on the Law of the Sea.

I turn now to schedule 2. For the purposes of the Customs Act and in relation to the regime that governs customs brokers, a nominee is a person who, under the application process, is required to be nominated by an applicant. The nominee is then endorsed on the licence. Section 183CD provides a list of conditions which must be satisfied for a person to be eligible to be a nominee. Significantly, under the current section, a person can only be the nominee of one customs broker and the nominee must be a customs broker at the same place as the nominated customs broker. The amendments significantly simplify the requirements. They remove the requirement that a person can only be the nominee of one customs broker and the requirement that the person not be a customs broker at another place. The explanatory memorandum notes that this is due to the changing nature of the corporate customs brokerage field, which is moving towards freelance customs brokers as its nominees. The amendments would remove the requirement that freelance brokers may only act as a nominee for one brokerage.

Schedule 3 acts to formalise a four-year time limit on duty recovery actions and also to update the way the act deals with payments under protest. Under the Customs Act as it stands, there is a time limit of four years for the recovery of duty where the short payment of duty was the result of a Customs error. However, there is no time limit for the recovery of duty where the short payment of duty was the fault of the importer. The explanatory memorandum indicates that Customs currently maintains an unofficial policy of not pursuing the repayment of short duty where there has been a lapse in time of more than four years except in cases of fraud. This schedule will essentially formalise that arrangement and place it in legislation. Where the underpayment of duty has been as a result of fraud, however, the time limit will not apply.

With regard to payments under protest, the act as it stands does not allow payments under protest—that is, payment of duty where the amount of duty is disputed and may be subject to a review—for duty paid after the goods have been entered for home consumption. The committee report gives an example of how this may work. An importer pays the duty on goods. Customs later conducts an audit and finds that the duty has been underpaid. Currently, there is no legislative provision allowing for the payment of that duty to be made under protest. This schedule amends that. Finally, this schedule introduces amendments to provide for the obsolescence of the old COMPILE import declaration system and allows for more general issuing of payments under protest.

The amendments to the Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 allow Labor to highlight another promise broken by the Howard government. The trade modernisation acts contained a system for Australian business that would have allowed full duty deferral by effectively setting up a 30-day trading account for businesses dealing with Customs. However, the passage of the Customs Legislation Amendment (Border Compliance and Other Measures) Bill 2006 this very week allows the government to renege on its promise to industry by setting up a ridiculous scheme instead of a 30-day trading account.

In this scheme, the industry must, on the 15th day of the month, pay the actual duty incurred, estimate in advance the amount of duty that will be incurred in the remaining 15 days, pay that amount, reconcile the estimate with the actuals the next month and then finally pay the difference. What a ludicrous scheme for a government that pretends to be a friend of small business. Instead of cutting red tape, the Howard government is forcing Australian business to adopt an administrative nightmare. This highlights the Howard government’s love of red tape and its shabby treatment of business. I believe that my colleague Senator Ludwig will move amendments in the Senate relating to that very practice. Schedule 4 is the final schedule in this bill. This schedule amends the act to make it clear that it is unlawful to provide misleading information to Customs through a SmartGate terminal.

Now that I have outlined the scheme of the bill, I will once again indicate that Labor broadly agree with the legislation and that we will be supporting it—although moving amendments in the Senate. However, there are a number of concerns which we have with both the proposed legislation and the manner in which the legislation was put together. Firstly, I would like to bring up the issue of lack of consultation on the legislation—as has been the case with other legislation in this portfolio. The issue of consultation was raised at the Senate Standing Committee on Legal and Constitutional Affairs inquiry into this bill by the Customs Brokers and Forwarders Council of Australia—a peak representative group of that industry. Their concerns specified that there had been a lack of consultation with them on a key part of the legislation—the alterations to the brokerage nominee eligibility rules that I outlined earlier. This is despite the fact that Customs apparently indicated to the CBFCA late last year that they would be consulted on the changes.

The response of Customs to this charge was that the consultations had not been necessary as the amendments proposed in this bill in that regard were uncontroversial, in their view. I can accept this, up to a point. I acknowledge that Customs and the responsible minister have been better in consulting on other schedules in this bill than their appalling record on consultation with stakeholders on previous legislation would suggest. But the problem is not the specific lack of consultation here; the problem is the continued lack of consultation on the part of Customs in terms of the legislation that it puts before parliament. It was only on Tuesday this week that we saw another Customs bill, the Customs Legislation Amendment (Border Compliance and Other Measures) Bill 2007, pass through the Senate, where we had serious concerns with a lack of consultation. The concerns were so great that the report of the Senate committee examining the bill stated that it was ‘not satisfied’ that the consultation process had ‘encompassed all interested parties’ and that ‘in more recent times, the process appears to have become fractured’.

As I have already said, serious problems have manifested themselves due to a lack of consultation on other pieces of legislation and other projects—including the infamous container management re-engineering project, which, I have to remind the House, saw a situation in which the government’s lack of consultation and incompetent management very nearly brought Australia’s international trade to a grinding halt. That product of the lack of consultation is a reminder to us all in this parliament, but particularly government and Customs, of the need to consult broadly before legislation of this kind is pursued. But the point remains that there is something in Customs—and with their current minister—where it appears that, despite repeated lessons and warnings in parliament and by industry, they still fundamentally do not value consultations and still do not see them as an integral part of developing legislation and programs.

I will now turn to the matter of the new powers of search which will be granted to Customs officers under the proposed bill. As I have already indicated, these powers will give Customs officers the ability to search persons on ships that have been boarded. The agency provided a number of examples to the Senate committee examining the bill, of real world scenarios where these powers could have been used to help protect Customs officers from threats and to preserve evidence. However, Labor was concerned about the extension of the law because of the further potential application of a regime that did not require an officer to form a reasonable suspicion but would instead allow officers to search a person as a matter of course. This, in our view, could be a major problem for tourist-friendly industries like cruise ships and regular scheduled flights while not in Customs controlled areas.

The new powers set out in this bill have been provided to Customs, but the government is still keeping Customs beyond the reach of the Australian Commission for Law Enforcement Integrity. This is troubling in the light of the range of new powers that are being handed over to Customs in this bill and a range of other bills, some of which I have mentioned already. In each case, you have Customs being given more and more law enforcement style powers. In this bill, you essentially are giving Customs the right to search boarded ships for evidence that may, in limited circumstances, be used to prosecute persons for certain crimes. The continued expansion of these powers underscores the strong need for Labor’s policy to subject Customs to the scrutiny of the Australian Commission for Law Enforcement Integrity.

Arising out of the Senate committee’s considerations were two sensible recommendations for amendments to the bill which I hope will be taken up by the government. If not, I foreshadow that Labor will be looking to move amendments in the Senate to bring the bill into line with the recommendations. The recommendations which were advanced by the committee were, firstly, that schedule 1 of the bill—the schedule relating to the new search and seizure powers—be amended to ‘include provisions dealing with the maintenance of legal professional privilege and other privileges identified as requiring protection when those augmented search and seizure powers are exercised’. Secondly, the committee recommended that the bill be amended to require that, within three years of proclamation, a review of the new search and seizure powers be undertaken by the Commonwealth Ombudsman.

In my opinion, these are sensible, reasonable and proportioned recommendations that should be adopted and agreed to by the government. The first recommendation came in response to the submission by the Director of Public Prosecutions of the Australian Capital Territory that the seizure powers failed unnecessarily to accommodate claims of legal professional privilege. The DPP also outlined a simple scheme which could be put in place in order to accommodate the privilege. The second recommendation is another sensible and appropriate recommendation. It is a recognition of the fact that these powers are quite broad and quite strong and that, as such, they should be subject to a review. Three years is an appropriate length of time for such a review. Labor hope that the government will take up these recommendations. In any case I repeat that if the government does not take them up we will be pursuing them by way of amendment in the Senate.

With the exceptions I have referred to just previously, I commend the bill to the House, and look forward to its speedy passage through this place. I also look forward to its fair consideration in the Senate, hopefully with the amendments to which I have referred.

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