Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

It is very difficult to take one’s mind off the events in Victoria after listening to the previous speakers, but I accept that the business of this House must go on. I rise to speak in support of the Federal Court of Australia Amendment (Criminal Jurisdiction) Bill 2008. I welcome the introduction of this bill, which I am sure will also be welcomed by most Australians. This bill is related to the Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008, which amends the Trade Practices Act 1974 and which introduces new offences for serious cartel conduct. These amendments in turn give the Federal Court jurisdiction to deal with those new offences and set up the necessary framework. Equally welcome is that, for the first time, serious cartel conduct will be criminalised and there will be uniform procedures across Australia, including a trial by jury. Serious breaches would carry a maximum penalty of 10 years imprisonment and a $220,000 fine. This is consistent with international penalties. Other provisions in the bill relate to the procedures of the court, which are matters that I will leave to my colleagues with legal expertise to pass comment on.

The bill is long overdue. It is long overdue that serious cartel conduct should be criminalised, and the Trade Practices Act amendment bill will do exactly that. However if the amendment is to be effective then the laws and processes relating to such prosecutions must also be in place. That is what this bill does. For years the difficulty of successfully prosecuting serious cartel conduct has been a cause of frustration for both the government and the wider community. Furthermore, the penalties relating to such conduct have been inadequate to act as a deterrent. Criminal cartel conduct is a matter which crosses state and national jurisdictions and is therefore quite rightly a matter over which the Federal Court should have jurisdiction. Furthermore, the ACCC, which has been empowered to conduct the necessary investigations and launch prosecutions, is also a national body.

The Federal Court of Australia, which began exercising its jurisdiction in 1977, already deals with a number of corporate matters, including the Australian Competition Tribunal. I note that the draft legislation has been the subject of widespread public consultation and that a number of submissions have been made, particularly by the legal fraternity. Given that any prosecutions under the legislation will undoubtedly be costly, drawn-out cases, every attempt should be made to close possible loopholes and minimise any ambiguity within the legislation. I note from the submission from the International Bar Association, a group which represents some 30,000 individual lawyers from across the world, that 15 jurisdictions worldwide already have criminal sanctions for cartel conduct. Of those, 11 jurisdictions may impose a term of imprisonment for cartel conduct, with the terms ranging from one to 10 years.

Under the legislation, if the Federal Court and a state or territory supreme court both have jurisdiction to hear a trial on indictment and a magistrate makes a committal order then the magistrate will have to determine which court should be named in the order. The magistrate will, however, be required to consult with the Director of Public Prosecutions and ultimately the Director of Public Prosecutions will make the final decision on which court an indictment should be filed in. The legislation creates criminal offences for making or giving effect to a contract, arrangement or understanding that contains a cartel provision with the intention of dishonestly obtaining a benefit.

Consistent with international best practice, the definition of a cartel provision applicable to both the criminal and civil regimes will reflect the OECD’s definition of hardcore cartel conduct. The OECD recommendation defines hardcore cartel conduct as an anticompetitive agreement, anticompetitive concerted practice or anticompetitive arrangement by competitors to fix prices, make rigged bids—which is otherwise known as collusive tenders—establish output restrictions or quotas, or share or divide markets by allocating customers, suppliers, territories or lines of commerce. This is a very broad range of activities that are generally very difficult to prove. In that respect I welcome the provisions in the related bill relating to the protection of witnesses and to telephone interception.

I note that this bill has been referred to the Senate Standing Committee on Legal and Constitutional Affairs for inquiry and report by 20 February 2009. I expect that the Senate committee will want to have a close look at the six submissions that were received as part of their inquiry, all of which came from the legal profession. Within those submissions, several matters were raised, including whether the Federal Court is the most appropriate jurisdiction to hear cartel conduct cases; whether the Federal Court is properly resourced to handle the workload; and matters relating to the presumption of bail, defence disclosure and jury selection. These are matters which I expect the minister is aware of and which the minister will respond to if specific recommendations arise from the Senate committee report. I note that the bill has the support of opposition members and I commend the bill to the House.

Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

Before I begin speaking on the Federal Court of Australia Amendment (Criminal Jurisdiction) Bill 2008 I would like to put on record very briefly the views of the mid-North Coast of New South Wales, following the very generous and passionate comments from others in relation to both the Victorian bushfires and the Queensland floods. I represent an area which is geographically between the two natural disasters that are currently going on. Whilst the mid-North Coast is not physically affected, many in the region are very touched emotionally and their thoughts are with family, friends and communities affected. The communities of the mid-North Coast are also helping through offering financial assistance, donating blood and contacting family and friends. We also have one of the major Centrelink call centres, which is dealing with many calls in relation to both natural disasters. At a local level our thoughts are also with those taking those calls. All support locally will be in place.

I turn to the bill before the House. After four months in this chamber, having seen $70 billion spent by government in relation to many financial affairs, I consider this to be of equal significance in finally dealing with the issue of cartels within Australia and their impacts on local communities throughout Australia. When I first spoke in this chamber three to four months ago, I said that I would advocate as much as possible not only on behalf of the 90,000 residents of the mid-North Coast of New South Wales—and in this particular legislation you can change the word ‘residents’ to ‘consumers’—but also on behalf of the business community of the mid-North Coast of New South Wales, which is one that is 95 per cent dominated by organisations of five employees or fewer. The two groups that are going to feel the full impacts of cartel behaviour are those in the micro small businesses in local communities and regions such as mine and consumers who are paying too much for the end product. We are finally seeing legislation that is dealing with cartel behaviour and treating it as what it is, which is essentially theft, fraud and criminal behaviour. That is certainly long overdue and it is welcomed. I thank the government for bringing it in and for making it fit into the federal jurisdiction.

For some reason, and it has always confused me, Australia seems to lag with regard to cartel behaviour. Whether it is because the concept is probably not cracking through to the common psyche as much as it could, whether it is because of our penal background, whether it is because of our larrikin nature in trying to beat the tax man—whatever the reason is—I would hope that there is an educational element in this legislation that is going to make very clear to the common man and woman on the street that cartel behaviour is probably the most significant offence in a market economy with regard to impacts on the consumer and the small business on the street in regional areas such as mine.

I support this legislation as it upholds a couple of fundamental principles of justice under the rule of law, one being consistency. It is crazy that we could have eight different players involved in the one cartel that may be based in eight different states and that they would be treated differently by eight different jurisdictions, with eight different outcomes. There would be a fundamental inconsistency in the way the message of the consequences of cartel behaviour would be sent to communities. There would be an inconsistency in the fundamental principles of the rule of law. This would lead to fundamentally inconsistent outcomes in dealing with cartel practice. So consistency is a critical and important aspect of these changes, which I certainly welcome. I know these issues have been highlighted by others far more eminent than me, such as Justice Weinberg and others, in promoting the argument that there is a problem that needs to be addressed to achieve greater consistency in dealing with cartel behaviour.

Fundamentally, there is the issue of relevance. All of us, if we are being good local members, respond to frustrated letters about price fixing in all its forms, whether at the petrol bowser or in the shopping centre. If this legislation can start to up the ante in putting pressure on those involved in illegal activity and in developing more transparent practices at the top end of the market economy of Australia then I think it will make some substantial changes that will be recognised in local communities such as mine and I am sure in the other 149 electorates throughout Australia.

The laws in respect of cartel practices need to be relevant. Consumers have been complaining about many issues that they feel aggrieved about. We can start to shoot some of them home with regard to cartel behaviour. There is the high profile example of last year in which small business operators in their many forms around Australia who were involved in the lower levels of the chain of that particular product were left out of pocket. Where is the deterrence for that future behaviour unless there is legislation such as this? This is an important reflection of those frustrations at a community level and, hopefully, it will achieve some good outcomes on behalf of small business and consumers, particularly, from my point of view, in regional areas.

The constitutional issues that are contained in this legislation are also fascinating, with the Federal Court sticking its nose into indictable offences for the first time. I wish the court luck. I hope that this is the start of an expanded role of the Federal Court and I wish it success in this particular field. I am one who shakes their head that it is 2009 and we are still having these jurisdictional issues. I certainly hope that this is a success and that the laws can be expanded into other areas with regard to criminal practices, again, based on the two previous points I raised on relevancy in local communities and on consistency in the delivery of law.

I note the comments and concerns raised by the Law Council of Australia, the coalition and others on issues of the accused’s right to silence and bail. I also note that we can argue about that in this chamber until we are blue in the face until we have some test cases that start to define some of the terms in question. The government could try and be as prescriptive as possible on some of the definitions in question but let us have a look at the notes, practices and definitions that come from the court. I hope the Attorney-General has a watching brief so that, if it does not go in the direction that I hope we all want it to go, we can see further legislation or regulations come through this chamber.

Finally, whilst the Attorney-General is here, there are some issues relating to cartel practice that I would like to raise. This is an opportunity for cartel practices to take a greater role and significance in law enforcement, competition law and trade practices law in Australia. I would be very interested to hear responses from the Attorney-General with regard to the consideration of specialisation and, potentially, a cartel branch within law enforcement operations. It would marry up nicely with this legislation, and the Trade Practices Amendment that is coming up soon, to see greater resourcing for the specialisation of law enforcement and the fingering of cartel practices at the highest level. In addition, with regard to criminal jurisdiction and cartel practices, it is noted from various international jurisdictions that reached this point earlier than us that there are still some question marks about the use of those laws. It is one thing to have these laws but it is another thing to use them. From the various surveys that have gone on in the various jurisdictions, the actual use of the laws is still relatively low. Imprisonments from the sanctions that are being proposed today are relatively low. If we are going to take this step and put this legislation in place, I hope that what comes with that is the upping of the ante in respect of the concept of cartel practices throughout Australia, and with that comes the clear message to directors, shareholders and anyone involved that this is a no-go zone; it is something that is the complete antithesis of everything about a market economy that is operating in the people’s interests.

We are in the people’s chamber. I hope that vested interest can be put to one side by all the various players in this chamber and that we are advocates and lobbyists for people. If we are, we would then place great significance on this legislation today. I hope that it is used, used well and that we can have the market economy that we all want to see operate in the people’s best interests in Australia today.

Robert McClelland (Barton, Australian Labor Party, Attorney-General) Share this | Link to this | Hansard source

in reply—I thank all members for their contribution to the debate on the Federal Court of Australia Amendment (Criminal Jurisdiction) Bill 2008, with the member for Lyne just concluding. This bill is the product of extensive consultation with key stakeholders around Australia. The procedural provisions are based on the best features of existing state and territory law and will allow the Federal Court to apply consistent criminal trial procedures regardless of where the trial is held. With that in mind, I would like to respond to some of the matters raised in today’s debate. In particular, I would like to address a number of concerns raised by the opposition through, in particular, the member for Farrer—very sincerely raised, I acknowledge. The member for Farrer has suggested that the pretrial disclosure provisions abrogate the ancient right of silence of a defendant in our criminal system. These measures, contained in the current bill, are not unprecedented. The provision in question—proposed section 23CF—closely follows the Victorian provisions. Those provisions include the requirement that, if the accused takes issue with the prosecution’s case, the accused must state the basis for taking issue. The aim is to ensure that an accused person provides a meaningful response to the outline of the prosecution case. The clause will not require them to disclose their defence.

The Law Council of Australia has noted that the courts and the practitioners in Victoria have found ways of operating under the Victorian provisions which do not require the accused to disclose their defence, and that is what we are aiming at in this current legislation. We are aiming, with these provisions, to achieve those arrangements, and to formalise those arrangements, at the Commonwealth level. One person who is eminently qualified to comment on this legislation is Justice Mark Weinberg. Justice Weinberg is currently a judge of the Victorian Court of Appeal. He was formerly a judge of the Federal Court of Australia and, prior to that, he practised in criminal law, civil law and administrative law at the bar as well as serving for a period of time as the Commonwealth Director of Public Prosecutions. In addition, from the academic side of analysing the law, he was the Dean of the Faculty of Law at the University of Melbourne. As a result, we believe he is eminently qualified to comment on the development of the criminal law and in particular the Federal Court’s role in that development.

In evidence to the Senate Standing Committee on Legal and Constitutional Affairs last week he indicated his support for the legislation and he rejected any notion that the pretrial disclosure regime was in any way unfair to the accused. His Honour said:

I have no difficulty with the proposition that the defence, in a case of this kind, should be expected to indicate in broad terms—

and I underline that—

the areas that are not in dispute and the areas that are in dispute, and, if they are in dispute, the general basis of why that is so. I do not regard that, in this day and age, as being in any way antithetical to the conduct of a fair trial or in violation of any notion of the right to silence or any of the more traditional reasons why it is thought that the accused should simply be entitled to put the Crown to its proof.

His Honour’s reference to ‘this day and age’ refers to the incredible complexity of running criminal cases involving corporations and the demand on the public purse and court’s time if frivolous, vexatious or unreasonable points are taken by a litigant in any proceedings and I think, with respect to His Honour, that that is what he was having regard to in commenting about the contemporary context of proceeding in a case such as this. And again, as His Honour indicated in his submission, the Crown will, under these provisions, still bear the onus of proving its case against an accused.

In relation to the comments of the member for Farrer about the absence of a presumption for bail, I note the bail provisions of the bill will apply only to the serious cartel offences heard in the Federal Court. It should be left to the Federal Court to balance competing factors and to make a decision that takes into account all the circumstances of the case when considering a bail application. Having made these points, and in fairness to the argument of the member for Farrer, I note that both these matters are currently being considered by the Senate Standing Committee on Legal and Constitutional Affairs, which is reviewing the bill; I will certainly carefully consider the committee’s recommendations in terms of any final amendments that may be considered.

The bill sets up the procedural framework to ensure that the Federal Court can exercise its new criminal cartel jurisdiction to be given under the Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008—the bill that actually establishes the criminal offence. This will be the first time that the Federal Court of Australia will have jurisdiction in respect to indictable Commonwealth offences. It is the government’s belief that these matters are too serious to be left to a summary jurisdiction and certainly too serious to be left to a regime that applies only a civil penalty, and that is why we are establishing this indictable criminal jurisdiction to deal with what we believe are very serious offences. The jurisdiction in the Federal Court will be concurrent with the state and territory Supreme Courts. This will ensure a high degree of flexibility to ensure that cartel cases can be prosecuted in the most appropriate court, but it will ensure a central role for the Federal Court in developing a nationally consistent set of principles in these areas—a matter mentioned by the member for Lyne, who mentioned the risk of developing eight different outcomes around this central cartel offences law.

The Federal Court has developed extensive experience with respect to cartel conduct in the civil jurisdiction as a result of dealing with cartel cases. It makes sense for the Federal Court to be able to apply its existing expertise in that area to criminal cartel conduct as well. The Federal Court has extensive experience in dealing with complicated economic concepts in the field of competition law, and the Federal Court has been responsible for developing jurisprudence in the field—and it has been a jurisprudence that has developed a real specialty both from the point of view of practitioners and from the point of view of the court. State Supreme Courts, we believe, simply do not have that same level of experience. I note a recent media report which raised questions about why this jurisdiction is not being given exclusively to state and territory courts, which have traditionally dealt with criminal matters, including, it must be acknowledged, federal criminal matters. In response, I would say that it should be pointed out that a number of the judges of the Federal Court presided over many criminal trials and criminal appeals when they were judges of the state Supreme Courts, and other federal judges routinely preside over criminal cases in their capacities as additional judges of the Supreme Court of the Australian Capital Territory and the Northern Territory. The court itself has experience in dealing with state and territory corrective service organisations and agencies as a result of conducting its general jurisdiction.

In summary, this bill will give the court the full range of powers needed to run a criminal trial, from pretrial proceedings through to bail, empanelling juries, conducting trials and hearing appeals. The government is equally determined to be tough on crime, whether that crime occurs on the streets of our suburbs or in the boardrooms of our corporations. I note the member for Lyne described this cartel conduct as amounting to theft, fraud and criminal behaviour. He is absolutely right, and these two bills are intended to deal with those measures. We believe this is a major initiative in law enforcement against corporate crime and I commend this bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.