John Hogg (President) Share this | Link to this | Hansard source

On a matter of privilege, Senator Milne, by letter dated 28 August 2009, has raised a matter of privilege under standing order 81. The matter relates to evidence given by various corporations before the Senate Select Committee on Climate Policy and the Senate Select Committee on Fuel and Energy in relation to the government’s Carbon Pollution Reduction Scheme (CPRS) legislation and its effects on those corporations’ operations. Senator Milne suggests that the evidence given by the corporations may have been false or misleading because of discrepancies between that evidence and disclosures made by the corporations to shareholders, investors and the Australian Stock Exchange. The alleged discrepancies are set out in material provided by Senator Milne and were originally composed by the Australian Conservation Foundation as part of a case before the Australian Competition and Consumer Commission.

Resolution 6 of the Senate’s Privilege Resolutions, setting out acts that may constitute contempts of the Senate, provides in paragraph (12) that:

A witness before the Senate or a committee shall not:

(c) give any evidence which the witness knows to be false or misleading in a material particular, or which the witness does not believe on reasonable grounds to be true or substantially true in every material particular,

This formulation of one of the well-known contempts clearly indicates that the offence is constituted by a witness knowing that their evidence is false or misleading or not believing that their evidence is true. The offence is constituted by the state of mind of the witness. In its past reports on cases of alleged false or misleading evidence, the Privileges Committee has clearly indicated that this culpable state of mind on the part of the witness is necessary to constitute the offence, and that there must be an intention to give false or misleading evidence.

Resolution 4 of the Senate’s Privilege Resolutions requires that, in determining under standing order 81 whether a motion to refer a matter to the Privileges Committee should have precedence under that standing order, I am to have regard to the following criteria:

(a)

the principle that the Senate’s power to adjudge and deal with contempts should be used only where it is necessary to provide reasonable protection for the Senate and its committees and for senators against improper acts tending substantially to obstruct them in the performance of their functions, and should not be used in respect of matters which appear to be of a trivial nature or unworthy of the attention of the Senate; and

(b)

the existence of any remedy other than that power for any act which may be held to be a contempt.

Past presidential rulings have indicated that a matter will be held to meet criterion (a) if it is capable of being held by the Senate to meet that criterion. Criterion (b) is met if there is no readily available other remedy apart from the Senate’s contempt jurisdiction; there is no other remedy for the offence of giving false or misleading evidence.

The suggestion that false or misleading evidence may have been given by the corporations concerned rests upon alleged discrepancies between that evidence and the disclosures to the market made by the corporations. An examination of the comparison between the evidence and the disclosures, composed by the Australian Conservation Foundation, however, indicates that in relation to each listed statement made to the Senate committees there was no disclosure or limited disclosure, or there were differences in tone between the committee evidence and the disclosures. In other words, it is alleged that the corporations have not told their shareholders, investors and the Stock Exchange everything they have told the Senate committees. It is not a case of discrepancies between statements but the absence from one set of statements of material contained in the other.

The cases of alleged false or misleading evidence considered by the Privileges Committee in the past have involved apparent contradictions between evidence and other statements or between evidence and facts or circumstances at variance with that evidence, such a situation indicating that the evidence may have been false or misleading. There has been no case of statements made in evidence being contrasted with silence or partial silence about the same matters in other forums. It is obviously difficult to proceed from such a situation to a conclusion that the evidence may have been false or misleading, much less to a conclusion that the witnesses knew that the evidence was false or misleading and had the necessary culpable intention.

In this light, the matter appears to fall far short of meeting the criteria I am required to consider. On the material so far provided, it would not be capable of being held by the Senate to meet criterion (a). I have therefore decided not to give precedence to a motion to refer the matter to the Privileges Committee.

A decision not to give a matter precedence under standing order 81 does not prevent a senator raising the matter in the Senate under other procedures.

I table the letter from Senator Milne and the attachments.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

by leave—I move:

That the Senate take note of the statement.

Mr President, I thank you for the statement that you have provided to the Senate today and for the consideration that you have given the matter. It is an incredibly important matter. Coming to terms with it and thinking about it highlights a problem we have in Australian democracy and in our regulatory frameworks. This matter was referred to the Australian Competition and Consumer Commission and the commission said that they could not make a decision about it because the evidence provided to the Senate was under parliamentary privilege so they would not be able to deal with it that way. But when we come in here to the Senate what we have is a precedent whereby contempt has been through contradictory statements, rather than a statement being made as true and the absence of one that was not made at all—in other words, omission. And it is very clear that, under the legislation that we have, the Australian Securities and Investments Commission oversees the disclosure obligations that companies have in terms of their businesses. So we have got the ACCC, the Australian Securities and Investments Commission and the parliament, and the companies involved.

When the ACCC made its decision on this matter it said that political statements to the media or to the parliament were comments not made in the course of trade and commerce. But I would argue that by coming to the Senate and giving evidence in relation to the Carbon Pollution Reduction Scheme, particularly as it pertains to the level of compensation that those companies are getting, that does materially go to the issue of trade and commerce because it is going to impact on the trade and commerce of those companies—that is pretty obvious—and that the statements made in relation to jobs and investment in the industry in the future also go to trade and commerce. So the issue I have here is that, whilst the precedent is there of giving one lot of evidence to the Senate and maybe making a contradictory statement somewhat else, not disclosing to one’s shareholders the dire circumstances that one gives to the Senate is in fact providing two separate views of the world in two separate fora. One of the tests here is: were the companies telling the truth when they came to the Senate?

I respect your reiteration, Mr President, of the Senate resolution providing that witnesses shall not:

… give any evidence which the witness knows to be false or misleading in a material particular, or which the witness does not believe on reasonable grounds to be true or substantially true in every material particular.

I refer in particular to Xtrata Coal, for example, who made the claim that, if the Carbon Pollution Reduction Scheme is introduced, Xtrata could sack hundreds of Queensland workers and bin a $5 billion project. It claimed that if the CPRS is implemented it will close four mines in New South Wales and scrap plans to invest $7 billion in new coalmining operations in New South Wales and Queensland that would create 4,000 jobs.

Now you would think if the impact of this legislation was going to lead to the closure of mines, to the sacking of that many people and to the binning of a $5 billion investment project and a $7 billion investment in New South Wales and Queensland that the company ought, under the ASIC rules, to disclose that to their shareholders as being a potential risk for the company going forward. The point is that while that claim was made to the Senate Select Committee on Climate Policy, there was no disclosure from Xtrata to its shareholders or to the Stock Exchange that those multibillion-dollar investment projects would be binned if the Carbon Pollution Reduction Scheme went forward.

So we have a difficulty here that the current rules as they apply to the ACCC, to ASIC and to the parliamentary Privileges Committee seem to be in contradiction. When people come before Senate committees it is expected that they will tell the truth, and the whole truth, to those committees. What we have here is a situation where by omission they have not told their shareholders under the obligation they have under the disclosure provisions under ASIC’s jurisdiction. So the question is: to whom are they telling the truth? Are they telling the truth to the people of Australia or are they telling the truth to their shareholders and their investors?

We are also aware that many of these corporations hold private briefings for their institutional shareholders. So at one level they will tell this Senate something; at another level they will have a private briefing with their institutional shareholders, and nobody knows what they tell them; and then they have their disclosure obligations through their company reports, annual general meetings and the like where they tell the whole of their shareholders and the media and the Stock Exchange what is going on. As a result of having examined this matter, I think we have an issue to deal with in this parliament, and that is: how are we going to go forward in the future in holding corporations and witnesses to account in the Senate processes and making sure that the contempt of lying to the Senate or misleading the Senate or misleading the Senate by omission is dealt with? Evidence to parliamentary committees goes to the committees’ reports, which go to the nature of legislation which ultimately appears before this chamber. Members of this parliament actually take seriously and believe what people tell them in the Senate committees because they believe it is a contempt if they do not and so they reasonably expect people to tell them the truth. So whilst I respect the ruling you have made in this context, Mr President, I note that you have said this ruling does not preclude taking action under other Senate processes and I will consider how I might do that.

I do think that it raises a very important issue about contempt for the Senate and the role of corporations. I think the ACCC has taken a very narrow view of what constitutes comments made in the course of trade and commerce as opposed to political statements. These were not political statements in the sense of ‘the government or the opposition is better or different’. These were comments that particularly pertained to trade and commerce, the operations of those particular companies. The fact that this has even been raised has certainly started to have an impact. As was noted recently, BlueScope Steel provided new, more detailed information about the likely impact of the government’s emissions trading scheme in their end of the year results. That had not happened until then. Now we are putting some pressure on them to put into writing to their shareholders, under the disclosure provisions, exactly what they are saying. We will certainly be monitoring these companies to look at what they actually do. We will be looking very closely at their profits and investments that they claim will be ‘jeopardised’.

I will also be going to ASIC to have a look at the disclosure provisions and to see whether these companies have been in breach of those disclosure provisions because of their failure to disclose to their shareholders the information that they disclosed to the Senate through the parliamentary system. You could now assume, under this ruling, that when they made those statements to the Senate they were telling the truth. Therefore, if they were truthfully outlining the likely impact on their companies, I feel sure they will have been required, under the ASIC rules, to disclose to their shareholders that truthful statement or impact on the company’s bottom line.

Mr President, I appreciate the consideration that you have given to the matter. I will take your advice and look at what other Senate processes may be employed to take this matter further. But I would also urge the Senate to really start thinking about contempt of Senate processes. While I am on my feet with regard to that, I think the number of times we now see reported in the media the recommendations of Senate committees before they report to the Senate is disturbing. Only yesterday there was a report, yet again, in relation to managed investment schemes, which said what the joint house committee is going to find. That is a contempt of the Senate. The people of Australia have got a right to expect that Senate processes will be respected by the senators in here who participate in those processes, but when we invite witnesses we expect those witnesses to respect the Senate and its processes, to tell the whole truth, not to omit or to exaggerate and not to give the same disclosure to their shareholders that they try to use to influence the Senate.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Mr President, in speaking to the motion briefly, can I indicate the coalition’s full support for your ruling and your determination. It is based on sound reasoning. The decision is based on precedent. As you quite rightly pointed out, the statements that are complained of are in fact not inconsistent; they may be different. But it is a very long bow to draw indeed—as is the wont of the Australian Greens of course—to suggest that there has been a contempt of the Senate. I would have thought that any reading of the documentation provided by the Australian Conservation Foundation to the ACCC would have disclosed that. That it was brought before you for a ruling or a determination as to whether this was a matter that was deserving of precedence was in fact nothing but a stunt by the Australian Greens. They must have known that from the outset. Clearly, there were no contradictory statements.

Furthermore, there may have been some skerrick of support for the assertion made by the Greens if the submissions, written and oral, had been provided in camera to the Senate. But the submissions were made publicly. As I understand it, they were put up on the Senate committee’s website. The witnesses spoke to the committee in public. A huge degree of reporting was undertaken on the various companies’ submissions et cetera to the inquiry into the CPRS. So there was no suggestion that any of this was done in secret or in an underhand manner. Indeed, everything was quite consistent. There are different requirements in relation to company reporting. If there is a difficulty with company reporting then that is a matter the Greens or the Australian Conservation Foundation, or the two of them in lock step, ought to refer to ASIC or some other organisation. They should not use the forms of the Senate. So, Mr President, the coalition, on whose behalf I speak in relation to this, fully support your determination in this matter.

This has just been an exercise in convoluted self-justification by the Greens. They are trying to justify their stunt. I note with some interest Senator Milne’s concern that certain statements not be exaggerated. She said that things were exaggerated. Those of us who had the opportunity of reading the weekend media would have seen Laurie Oakes’s expose of the Australian Greens quite mischievous exaggeration of an unfortunate oil spill. The Australian Greens senators described an oil slick which later became algae. What was alleged to be 20 kilometres from the coast is now 198 kilometres from the coast. That is an exaggeration of about a factor of 10.

The Australian Greens should come to this debate with clean hands. They said: ‘We never exaggerate. We never do things of that nature.’ Of course, the Australian Greens are well known for their stunts, albeit I do note that Senator Siewert quite properly did admit that what she thought was oil could be algae. Our friends in the media never report those things on the Australian Greens, do they? That is a very interesting observation. Whereas, if somebody like me gets into a spot of bother, I apologise and withdraw—I do all of those things—and the media run with it for ages. That is fine; that is part of the game. But there does seem to be a separate rule for the Australian Greens. They would have to be the most protected species in Australia.

I find it interesting that the media does that for the Australian Greens when they are caught out time and time again with their gross exaggerations. They came into this place and said, ‘A company may have exaggerated or slightly nuanced something,’ when in fact the evidence does not support that. I find that interesting, to use a neutral term. In brief, the opposition fully support the statement you have just made, Mr President. I commend you for it.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

The government does support the ruling that you have made, Mr President. The debate does seem to have wandered a little bit away from the substance of the matter that was raised. Irrespective of the arguments that have been put, it is entirely appropriate for a senator to raise a matter of privilege and to ask for it to be declared a matter of precedent. In this instance you have ruled on that matter—unfavourably to Senator Milne—after what appears to be quite an in-depth look at the issue.

From what you have outlined there does not appear to be a problem with privileges issues themselves being raised; there seems to be a problem in relation to the way this is being ventilated in relation to a privilege matter. As has been correctly pointed out, there are a range of opportunities through the Senate, other than the use of privilege, for Senator Milne to deal with this or other matters that she may wish to raise. In short, the government supports the ruling made.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Mr President, your ruling is wrong. The outcome of that ruling being wrong is that it will encourage entities which have a particular interest to protect to come before a Senate committee and give compelling evidence—and in this case we are talking about $2.9 billion, which is the cost of the CPRS as put forward by the government, and, as Senator Milne said, the loss of hundreds of jobs—but not do that when it comes to reporting to their shareholders and to the Stock Exchange. That is because there they face the potential of having to justify the statements.

Mr President, what you are doing here is saying that we have a lesser test in the Senate and its committee system than what is required for these companies in other arenas where they very likely have to justify the statements they made. You said:

It is obviously difficult to proceed from such a situation to a conclusion that the evidence may have been false or misleading, much less to a conclusion that the witnesses knew that the evidence was false or misleading and had the necessary … intention.

It is not, with respect, your job to come to that conclusion. It is your job to assess whether there is sufficient doubt about the matter to have it referred to the Privileges Committee for it to come to that conclusion or to dismiss that outcome. If we move to the position where the President in this place makes the judgment before allowing the matter to proceed to the Privileges Committee then we can abolish the Privileges Committee.

I am very alarmed. This is the fulcrum of our democracy. It is very important that the committee system which informs the Senate is not misled by omission or commission. The statements coming from these corporations warranted testing. Where they ought to have been tested—that is, by then proceeding to inform their shareholders directly—they demurred. That prima facie says that in their minds they felt it could not be justified. On that basis alone this matter ought to have gone to the Privileges Committee for assessment.

I am very concerned by the precedent being set here, which is that if the President decides that there is not enough evidence contrary to matters brought before Senate committees then it should not go to the Privileges Committee. We ought to have standards of evidence at least as high as those required by the Stock Exchange or the laws governing companies to be fully open in their disclosure to their shareholders.

Senator Milne’s proposal ought to have been adopted by you, Mr President. We are not going to proceed with challenging this ruling, because it is quite obvious that the government and the opposition will not accommodate that. However, I think it needs very serious contemplation because what is being established here today is that the Senate does not have the strength of determination on whether matters are true or not that pertains under the law in the commercial sector. Is that what we want to see established? I certainly do not. If wild or exaggerated claims or claims that cannot be substantiated are made before a Senate committee, they should be questioned.

I fear your ruling, Mr President, will simply encourage the corporate sector to fox Senate committees, the Senate itself or the parliament in future. Neither Senator Milne nor I want to see that at all encouraged. In fact, if you find the standing orders wanting then we ought to be looking at tightening them to make sure that committees are not subject to foxing by powerful entities with wild and exaggerated claims, including claims of future doom and gloom which cannot be substantiated.

There the matter stands. Senator Milne has indicated that she will look at the options available. But the Greens are making a stand here for everybody who is brought before Senate committees, not least so that the big and powerful corporations, which have a huge impact and lobbying power in this parliament, cannot through thunder and exaggerated claims alter the outcome of committee or Senate deliberations. That should not be entertained. I doubt, Mr President, that this ruling would have been made in the US congress, where there are much fewer rules to prevent Senate committees finding out the whole truth, all the truth—and that includes things that companies might like to omit.

Surely, something that is put to Senate committees with the strength and vigour that these corporations did ought to be something that is put to their shareholders through the proper legal channels. They failed to do that; they did not do that. They clearly did not want to or plan to do it. They must have had reason to fear proceeding down that path. Yet here we are in the Senate today saying, ‘But it’s okay to do to the Senate what can’t be done to the Stock Exchange or to shareholders.’ We demur. We think the ruling is wrong and we will be looking at how the Senate processes can be strengthened to protect the interests of the Senate as the watchdog of the people. That is what is at stake here.

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Firstly, Mr President, Senator Bob Brown is quite wrong and your determination is quite right. Senator Brown has said that, because of your determination, this matter will not be allowed to proceed to the Standing Committee of Privileges. That is totally wrong, Senator Brown, and you have been in this place long enough to know that that is wrong. All that the President did in his determination was not give precedence to Senator Milne’s motion. He did not give it precedence. There is nothing to stop Senator Milne, if she wants to, moving her motion through the normal, democratic processes of this chamber. There is absolutely nothing to stop her doing that. And then we will see whether the democratic processes of the chamber work.

You will find, Senator Brown—Senator Abetz having put the coalition’s position—that in fact you are a very small minority in your views about those processes. There are people in this place that believe that the current committee system and the processes of the Senate do work, have worked and will work as they have done for the last 108 or 109 years. Senator Brown comes in here and makes his political statements about democracy, saying, ‘This wouldn’t happen in the US Senate.’ We make our own rules, Senator Brown; we work by those rules.

All the President was asked to do was to give precedence to Senator Milne’s motion. In no way did the President make a ruling that the matter should not be discussed by the Privileges Committee. That is for the Senate to determine, Senator Brown, as you well know, not the President. So the President, after looking at all the evidence that was put before him by Senator Milne in her letter to him, determined that the matter should not take precedence in the Senate—but that is the only ruling and determination that he has made.

Having read the statement that the President has made to the Senate, I can say that I concur wholeheartedly with his decision. If Senator Milne wishes to take this matter further and try and get the Senate to refer the matter to the Privileges Committee, that is her responsibility—if she chooses to do that. But in no way was the President’s determination wrong. What is wrong is you, Senator Brown, saying that his determination was wrong, because I and, I am sure, all members on this side of the chamber agree that the President’s determination was indeed correct.

Question agreed to.