Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

The question is that the bill stand as printed.

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

When we were debating the Crimes Legislation Amendment (Proceeds of Crime and Other Measures) Bill 2015 yesterday we had just had confirmation from the minister who yesterday had carriage of this legislation that in fact a court, even if it formed the view that it was in the interests of justice to stay Proceeds of Crime Act proceedings on one of the grounds that are proposed to be inserted into the legislation in proposed new section 319(2), it was not able to do that solely on those grounds. So let us be very clear about this. The Australian Greens absolutely share concerns raised by the Victorian Bar and Criminal Bar Association, by the Law Council of Australia and by the Australian Human Rights Commission about these provisions. We do not support this parliament seeking to intervene in judicial processes in this country to the extent that, even if a court believes that it is in the interests of justice to stay Proceeds of Crime Act proceedings, it will not be able to do that if the grounds on which it forms that belief are contained in the proposed new section 319(2) of the Proceeds of Crime Act. On that basis the Greens oppose schedule 1 in the following terms:

(1) Schedule 1, item 4, page 4 (lines 1 to 31), subsections 319(2), (3), (4) and (5) to be opposed.

In support of this proposition I will very briefly read into the record the view of various organisations about proposed new section 319. Before I do that I want to be clear that I have a further amendment. If it were taken together, proposed section 319 not forming part of this legislation—

Jacinta Collins (Victoria, Australian Labor Party, Shadow Cabinet Secretary) Share this | Link to this | Hansard source

Move them together.

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I will not move it now—thank you, Senator Collins—because amendment (2) is consequential on the first proposition being accepted by the chamber. I make the point that if this proposition is not supported then I will not move amendment (2). It is our very firm policy position that proposed section 319 be deleted from this bill. In support of that I will very briefly read into the Hansard the view of, firstly, the Victorian Bar and Criminal Bar Association. They said in a submission to a parliamentary committee dated 20 January this year in paragraph 43:

… the Criminal Bar Association opposes the introduction of s 319(2)-(6).

I will also read in the view of the Law Council of Australia. In a submission to a parliamentary committee dated 7 January this year they said:

The Proceeds of Crime Act 2002 (Cth) amendments in Schedule 1 should not be enacted.

Also the Australian Human Rights Commission made a submission to the Senate Legal and Constitutional Affairs Legislation Committee, the same committee to which the previous two submissions were made. Their submission dated 6 January 2016 has as recommendation 1:

The Commission recommends that Schedule 1 of the Bill not be passed.

Even though the three organisations have expressed their opinion in slightly and technically different ways, the effect of all of those submissions is to at the very least delete proposed new section 319(2), which establishes the grounds on which a court must not stay Proceeds of Crime Act proceedings.

In summary, we have concerns about this because we believe, as do various submitters to Senate committees, that passing these provisions is highly likely to prejudice the right to a fair trial in this country in certain circumstances. We think this is a step too far. We believe that, in its haste to get its hands on financial or other resources through Proceeds of Crime Act proceedings, the government is compromising the potential for a right to a fair trial in this country in certain circumstances, specifically where there are already criminal proceedings underway that deal with the same matters that are being dealt with in the Proceeds of Crime Act proceedings. We believe that, unfortunately, the passage of this legislation is highly likely to mean that Australians who are facing criminal charges but have not yet been found guilty and therefore, under our justice system, are innocent will have their right to a fair criminal trial prejudiced because a court hearing Proceeds of Crime Act matters is not able to stay Proceeds of Crime Act proceedings even if the court forms the view that it is in the interests of justice to do so.

We have seen time after time the erosion of fundamental principles in our community—human rights, civil rights and citizens' rights—that many Australians have fought and died to protect and enhance during the history of our country. They are being eroded now in the name of the fight against crime and terrorism, with no evidence being placed before the Australian people or the Commonwealth parliament that what we are doing will make us as citizens of this country any safer as a result. We have seen it around Citizenship Act amendments in recent times, we have seen it around legislation that gives increased powers to security agencies in this country over a number of years now, and we are now seeing it in relation to matters associated with the delivery of justice in this country.

It is fundamental in this country that, in the interests of justice, there should be a separation of powers. Make no mistake: this is the parliament seeking to reach its hands into judicial matters that ought to be left to the courts in the context of deciding what the interests of justice are in particular circumstances and, in fact, how the courts should act to deliver justice. So this offends the separation of powers principle, it potentially falls foul of our constitutionally guaranteed right to a fair trial in this country, and it potentially interferes with the constitutional right of courts to determine how best to deliver justice in our country.

So we have strong concerns. These concerns are mirrored by the stakeholders that I have just referred to, and on that basis we commend our amendment to the Senate.

Jacinta Collins (Victoria, Australian Labor Party, Shadow Cabinet Secretary) Share this | Link to this | Hansard source

I will deal at this stage—given the discussion that we had last night on these matters—specifically with Labor's position on these amendments. By that I mean amendments (1) and (2) on sheet 7839. But firstly I would like to welcome Senator Canavan to his new position. He was not here last night when we were having this discussion, but it might assist the committee stage consideration if the government's position is outlined now that the amendment has actually been moved.

Let me say that from the Labor Party's position, sadly, if we wait for a commission to be secured in a court, the experience of our law enforcement agencies is that the proceeds of crime have been long transferred into new structures and asset classes and the task of confiscating them has become more difficult, if not impossible altogether. This is the mischief that these provisions seek to remedy. The point of seizing the proceeds of crime at the juncture supported by this bill is precisely so as to seize them before a criminal, or an alleged criminal, has the time and opportunity to hide them. As the Attorney-General's Department stated during the committee inquiry into this bill:

Non-conviction based forfeiture is a vital tool in the fight against serious and organised crime, countering the techniques that senior members of organised crime syndicates use to insulate themselves from criminal prosecution, and disrupting and dismantling serious and organised crime groups.

While we take the concerns raised regarding the fundamental rights and constitutional principles that may be impacted by the proposed amendments in the bill seriously, we are cognisant of the importance of an effective proceeds of crime regime in combating serious crime and those who profit from that crime. We note that the government and the Attorney-General's Department developed the proposed amendments in consultation with key stakeholders and with a view to striking an appropriate balance between effectively combating crime and respecting the fundamental rights and principles underlying Australia's criminal justice system.

Let me go briefly to the committee report. Senator McKim was quite right last night when he indicated that the fact that the Greens did not contribute any additional remarks or a dissenting report to this committee does not bind them in their position in the committee stage. However, during this discussion I would like to go to the areas that deal with this issue and some of the concerns that Senator McKim has raised. In particular, I take the committee to paragraph 1.16, which is on page 3 of the report, where the committee indicates that the explanatory memorandum:

… states that the grounds set out in subsection 319(2) are 'designed to prevent a respondent from claiming merely a generalised "risk" of prejudice to support a stay of proceedings', which would 'have flow-on effects on the availability of evidence, would impede the operation of the non-conviction based scheme and would frustrate the objects of the PoC Act'.

But let me go further, given some of Senator McKim's comments and some of the assurances that came out of the committee's consideration. For instance, at paragraph 1.19, the report indicates that the explanatory memorandum:

… states that the list of matters in subsection 319(6) 'is not a closed list …

as we discussed last night. It goes on to say:

… and does not prevent the court from considering other issues in its determination of the interests of justice'.

It might assist Senator McKim if a minister were prepared to highlight this issue in the second reading contribution, because that would have an interpretive effect in relation to how this is subsequently read in court.

Let me go on further to paragraph 1.20, which says:

A note is inserted after new subsection 319(6) to give examples of orders the court could make to address any potential prejudice resulting from not staying PoC Act proceedings ...

Again, this is highlighting alternative remedies to the issues that Senator McKim is raising. It goes on to say:

These include appropriate orders for the non-disclosure of evidence, or hearing the proceedings in closed court under new section 319A proposed in the bill, which provides that a court may order PoC Act proceedings to be heard in whole or part in closed court, if the court considers that necessary to prevent interference with the administration of criminal justice.

My response to Senator McKim is that some of the issues he has quite rightly raised were, as he mentioned, also raised by the Law Council and the Human Rights Commission. Labor have weighed them up, and we have determined that, from our point of view, the balance is appropriate to deal with the need of our law enforcement agencies to challenge this mischief. On that basis, Labor will be supporting the bill as drafted and do not support the amendments proposed in sheet 7839 as circulated by the Greens.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I have reservations about Senator McKim's amendment. I think that the position by Senator Collins fairly sets out the position in terms of the appropriate safeguards. I understand why Senator McKim has put this amendment up, but this is a very difficult policy area to deal with. When you are dealing with organised criminal groups, how do you best deal with it? I respect Senator McKim's motivations and the reasons he has put this up. Obviously, the bill needs to be monitored as to whether it has unintended consequences.

I want to spend one or two minutes talking about the confiscation of assets, which is an important tool to fight organised crime. In my home state of South Australia, my state colleague the Hon. John Darley MLC has been grappling with the state Labor government's legislation on confiscating all of the assets of an organised criminal group or, in particular, a drug dealer, where a conviction has been recorded. The stumbling block, sadly, in the case of the South Australian Labor government, is that my colleague Mr Darley put up a very reasonable amendment to hypothecate a percentage of that additional revenue for drug rehabilitation purposes.

I know the federal government has done some very good work with the National Ice Taskforce and put additional funds into these issues, but—and I say this not to make a political point; not at all—I simply ask respectfully of the minister to take on notice whether the government will consider hypothecating or at least allocating a percentage of this additional revenue to drug rehabilitation services.

I speak to too many constituents who have family members with a serious drug problem, especially with crystal meth. It causes such damage and devastation to those individuals and their families. Family members tell me that they have to cash in their super, take out loans and borrow money from friends in order to have their loved one go to a rehabilitation clinic, whether here or overseas, that could cost many thousands of dollars. The comment that has been made in relation to drug rehabilitation services is that it is piecemeal. Funding is on an annual basis, not on a three-, four -or five-year basis, which is what you need in order to get appropriate staff. That is something that the Australasian Therapeutic Communities Association has said. Garth Popple, the executive director of We Help Ourselves, which runs residential treatment services in New South Wales and Queensland, has said that these one-year extensions are not adequate.

I urge the government that money be set aside from the proceeds of crime, which is what this bill is about, to go to additional revenue—not just swallowed up in general revenue—to actually help those in need, to help those individuals who are victims of a terrible addiction and their families. It causes such destruction. I think that, whatever side of the fence you are on with the drugs debate, we all agree that, if somebody has a serious substance-abuse problem, particularly with, for instance, crystal methamphetamine and heroin, they need help.

I raise this, and I would be grateful if the minister could acknowledge the comments I have made. Also, could the government take on board: what additional revenues are expected from this legislation, broadly; will there be a commitment to at least consider funding additional rehabilitation programs; and, also, in the context of this proceeds of crime bill, will you give those agencies that do terrific work out in the community more than this hand-to-mouth funding on a year-by-year basis? They cannot recruit staff, they cannot plan ahead and they cannot provide those long-term services that are needed to help people in the grip of these terrible addictions.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

Before I respond to Senator Xenophon's comments, Senator Collins has asked for the government to clarify its position on Senator McKim's amendments. Because she so generously welcomed me to this chair, I am happy to do so. My understanding is that the government made it clear last night that it would not be supporting these amendments. I was not here at the time, but, without going through all the detail, we made the point that section 319 of the Proceeds of Crime Act already provides that a court may not stay confiscation proceedings on the sole ground that criminal proceedings have been instituted or have commenced. We made the point that the additional sections we are proposing to add to section 319 would limit, but not remove, the overarching discretion of the court under that provision, and, therefore, we will not support Senator McKim's amendments.

Certainly, Senator Xenophon, I and the government share your concerns about the need to properly fund and adequately resource those requiring treatment for substance abuse—in particular, those who are facing the scourge that has emerged to do with crystal methamphetamine and ice. You mentioned that the government has already committed significant resources here through the nationalised task force. We have announced a funding package of around $285 million. As part of that, $241.5 million is included for additional funding for treatment services. They will commence from 1 July this year. The funds will be allocated to Primary Health Networks to commission new services based on what is necessary for and appropriate to the needs of their local communities. I am hopeful that that will overcome some of the concerns you have raised, Senator Xenophon, about the hand-to-mouth existence of some of these organisations.

A key priority will be ensuring that Indigenous-specific treatment services and culturally appropriate mainstream treatment services are available to Indigenous Australians. The PHNs will work with states and territories to support improved planning and capacity building across the alcohol and other drug treatment sector. This funding is in addition to the $310 million that the government already provides for specialist alcohol and other drug treatment services.

The senator raised a number of other points about hypothecation of funds and what have you. I am advised that because these changes only modify or partly modify the existing arrangements we have not been able to quantify or estimate how much will potentially be raised. It obviously will depend on how much crime occurs. But I will make the point that under subsection 298(2) of the Proceeds of Crime Act there is already a provision that sets out areas in relation to which the Minister for Justice may approve a program of expenditure, including measures relating to the treatment of drug addiction and diversionary measures relating to illegal use of drugs.

The government announced this week a new $1 million partnership with Crime Stoppers Australia through the 'Dob in a dealer' campaign which will encourage concerned members of the community to contact Crime Stoppers to help tackle the issue of the manufacture and distribution of ice in their local area. This shows the government's commitment to working on both the supply and the demand side of the ice trade.

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I want to respond briefly to a few points made by previous speakers. Firstly, the right to a fair trial in this country is an absolutely fundamental cornerstone of our judicial system. The Greens have concerns here that we have articulated at length already that this goes too far. If you want to talk about balance, as a few previous speakers have both yesterday and today in this context, we do not think the balance is right. We believe that, in the rush to seize assets from people who may or may not, by the way, have committed a crime, we are unfortunately making it more likely that in some circumstances Australians will be denied the right to a fair trial, which is a fundamental cornerstone of our judicial system.

It is worth adding that Proceeds of Crime Act proceedings are civil proceedings, not criminal proceedings. So of course the burden of proof is lower in Proceeds of Crime Act proceedings than in criminal proceedings. Proceeds of Crime Act determinations are made on the balance of probabilities, which is a far lower burden of proof than for criminal proceedings, which of course need to be established beyond reasonable doubt for guilt to be found.

In relation to the points made by Senator Collins, I thank her for her contribution and acknowledge that there are other remedies available to courts hearing Proceeds of Crime Act proceedings and that one of those is to hear part or all of those proceedings in closed court. But I would make the point that another fundamental principle of our judicial system is that not only does justice need to be done but justice needs to be seen to be done. In fact, the New South Wales Council for Civil Liberties submission in relation to these matters states that:

… the rationale of the open court principle is that court proceedings should be subjected to public and professional scrutiny …

That is the rationale for an open court proceeding. So it is really important that, where possible, court proceedings in this country are open so that they can be subjected to public and professional scrutiny and we can meet the axiom that justice not only needs to be done in this country but needs to be seen to be done.

With those comments, we strongly reiterate our view that the proposed new section 319 which this bill seeks to insert into the Proceeds of Crime Act 2002 is grossly inappropriate and we maintain our opposition to it.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

The question is that subsections 319(2), (3), (4) and (5) stand as printed.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Senator McKim, do you intend to proceed with amendment (2)?

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

That amendment would be consequential to the first amendment succeeding, which, obviously, did not happen. On that basis, it will not be proceeded with.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

) ( ): by leave—I move Greens amendments (1) and (2) on sheet 7845 together:

(1) Page 2, clause 2 (table item 2), omit the table item, substitute:

(2) Page 12 (after line 22), after Schedule 2, insert:

Schedule 2A—Amendments relating to the Corporations Act 2001

Corporations Act 2001

1 Section 9 (after paragraph (a) of the definition of financial records )

  Insert:

  (ab) books, records or accounts needed to explain details of transactions that deal with assets; and

2 After section 190B

  Insert:

190C Internal accounting controls

(1) A director of a corporation must ensure that the corporation has a system of internal accounting controls.

(2) To comply with subsection (1), the system must ensure that:

  (a) transactions are executed in accordance with appropriate authorisation; and

  (b) transactions are recorded; and

(c) assets of the corporation are regularly accounted for and reconciled; and

  (d) appropriate authorisations are in place in relation to dealing with assets of the corporation.

3 Paragraph 286(1)(a)

  Repeal the paragraph, substitute:

  (a) correctly record and explain its financial position and performance; and

  (ab) correctly record and explain its transactions in sufficient detail so that the record accurately reflects the transactions; and

4 Application provisions

  The amendments made by items 1 and 3 of this Schedule apply to transactions that occur on or after the commencement of this Schedule.

I will not take very long, but I want to spend a few minutes going through why we have put up some amendments to schedule 2, which deals with false-accounting offences. The Greens are supportive of the intention of schedule 2 as it exists. Schedule 2 purports to strengthen the law in relation to the falsification of accounts so as to better enable regulators to prosecute those involved in bribery and corruption. It responds to the evaluation of Australia's compliance with the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, which recommended that sanctions for false accounting be strengthened.

Bribery and corruption are obviously threats to the foundation of our society wherever they occur. They erode confidence in the operation of our economy, they undermine trust in the institutions that support our economy and they pick away at the foundations of society. Corporations involved in bribery and corruption are a threat to the rule of law, pure and simple. I do not think anybody in here would disagree with that. Governments have an obligation to stamp out bribery and corruption wherever they take place. Failing to do so sends the wrong message about what is acceptable conduct. With supply chains being increasingly globalised, it is important that Australia do all that it can to encourage higher standards of conduct.

Unfortunately, as it stands, the Greens do not believe that schedule 2 spells out clearly enough the duties of a corporation that would enable this law to be effective. The concern that arose during the inquiry of the Legal and Constitutional Affairs Legislation Committee is that the Corporations Act does not actually require enough detail to be recorded that would enable regulators to detect and prosecute fraudulent accounts. The Greens amendments would simply require a corporation to record the buying and selling of assets. This is a statement of the obvious. Any legitimate business will already have such a system in place; otherwise, how else would it stay afloat? It is essential to the profitability of an enterprise to know what you are buying and what you are selling and that you have a system for employers to do this on behalf of the enterprise. The only businesses that do not keep a record of these transactions—at least not an official record—are those engaged in corrupt activities. But, for regulators to be able to detect bribery and to detect corruption, they need to be able to look at these records to see if the books add up.

The shortcoming of the bill as it stands, in our opinion, is that it assumes that the existing provisions of the Corporations Act require these records to be kept. Section 286 requires a corporation to keep financial records. However, the definition of financial records does not expressly state that the transaction of assets should be recorded. The Greens amendments would clear this up by prescribing that the transaction of assets be recorded. The Greens amendments would also make it explicit that directors of a corporation must institute and maintain a system to record these transactions. The Greens amendments sit entirely within the existing framework of the Corporations Act. They do not seek to extend the coverage of the act or the time period for the keeping of records, and we have received legal advice that this is the case.

The Greens amendments actually seek to mimic the approach taken in the United States, which, on this occasion, is leading Australia in taking steps to stamp out bribery and corruption. No law-abiding business has anything to fear from these amendments. As I mentioned earlier, most businesses do record these transactions, but you would have to ask yourself, if a business is not recording these simple transactions, what actual business is it conducting?

I urge senators to support these amendments so that we can be sure that the intention of schedule 2 of the bill can be fulfilled. I commend these amendments to the chamber.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

I note the Australian Greens have proposed a number of amendments to the Corporations Act 2001 relating to the proposed offences for false dealing with accounting documents. The government does not support Senator Whish-Wilson's amendments. The government considers its offences are broad enough to cover false accounting in a range of different contexts. The bill proposes an appropriately broad definition of accounting documents, namely: any account, any record or document made or required for any accounting purpose, or any register under the Corporations Act, or any financial report or financial records within the meaning of the act.

The suggested amendments from Senator Whish-Wilson would seek to amend an existing comprehensive piece of legislation—the Corporations Act—and that act relies on a referral of powers from the states and territories. To adopt amendments to this legislation in haste and without due consideration and consultation with the states and territories, relevant entities and the financial reporting profession could have far-reaching and unintended effects. The suggested Greens amendments also have the potential to add a significant compliance burden on large numbers of small companies without corresponding benefits to their shareholders or other stakeholders.

The government's new offences have been developed following a lengthy period of consultation with Commonwealth agencies as well as certain non-government stakeholders. If Senator Whish-Wilson's amendments were pursued, we would need to consider a similar process for them. We note the proposal to have the Greens amendments commence five months after royal assent of the bill. The government nonetheless believes it is necessary to give more consideration to any such amendments before they are made to ensure they are appropriate, they fit within the current framework of corporate regulation and they do not have costly, unintended consequences.

Jacinta Collins (Victoria, Australian Labor Party, Shadow Cabinet Secretary) Share this | Link to this | Hansard source

Labor will not be supporting the amendments moved by Senator Whish-Wilson—I will address all the amendments at this point—as we too believe the bill as drafted is fit for purpose and satisfies the intent to create two new offences of false dealing with accounting documents to implement Australia's obligation as part of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Article 8 of the convention requires parties to create offences of false accounting for the purposes of concealing or enabling bribes to a foreign public official.

We believe the amendments from Senator Whish-Wilson are not necessary to achieve the aim of schedule 2 and, while the concerns he raises are laudable, I take on board the comments of Senator Canavan for the government in terms of the referrals involved and the need to deal with appropriate processes to further these issues. Senator Whish-Wilson, we do not put aside the concerns you raise here, but unfortunately them being raised at this stage, and here and now being the first opportunity that we have had any detailed canvassing of the nature of these amendments, leaves us in the position where we think it is appropriate that more time be taken to look at those issues. As has been pointed out, any changes to the Corporations Act would require consultation.

We note that the Senate inquiry into the bill found that the provisions would not only support Australia's compliance with its international obligations but actually go further in helping to combat a range of financial crimes. Labor agrees that the breadth of the proposed offences and the potentially serious penalties for those who commit them are appropriate in the current circumstances. That said, in the longer term and after due consultation, the issues that you raise may merit further consideration.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I will just add that there have been numerous occasions when I have been in the Senate and heard the excuse that we need to go away to consult with the states and go through this process of hand-passing the football somewhere else. The role of the Senate as a house of review is to suggest amendments—amendments that are sensible and that improve the legislation. What we are asking for here is eminently sensible, and I cannot see any unintended consequences of asking corporations to keep a record of their transactions. Most companies do so; if they do not, then you would have to wonder what their transactions are. Senator Collins, further down today's Senate schedule we will be looking at the Tax Laws Amendment (Implementation of the Common Reporting Standard) Bill 2015, and I hope that you will not be moving any amendments this afternoon to that bill on the same grounds that you have just given—that it is late in the process and this kind of thing should not be done as a matter of process. I will be very surprised if you do that, following what you have just told us.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

The question is that amendments (1) and (2) moved by Senator Whish-Wilson on sheet 7845 be agreed to.

Bill agreed to.

Bill reported without amendments; report adopted.