Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

ROYAL COMMISSIONS AMENDMENT BILL 2006

This is a bill to amend the Royal Commissions Act 1902 for the purpose of clarifying the operation of the Act in respect of claims of legal professional privilege. This is a technical matter but also one of some importance. The amendments have been requested by the Honourable Terence Cole AO RFD QC, the Commissioner of the current Inquiry into Certain Australian Companies in relation to the UN Oil-for-Food Programme, in light of the recent Federal Court decision in AWB Limited v Cole.

Before dealing with the impact of that decision on the Cole Inquiry and the amendments to be made by the bill to overcome that impact, I would like to first highlight the Australian Government’s commitment to properly investigate the findings of the Final Report of the Independent Inquiry Committee into the United Nations Oil-for-Food Programme, more commonly known as the Volcker Inquiry final report.

The Australian Government established the Cole Inquiry to investigate whether companies named in the Volcker Inquiry final report into the Oil-For-Food Programme may have breached Australian law and, if so, whether the question of criminal or other proceedings should be referred to the relevant agencies. The government moved quickly to establish a publicly transparent and extensive inquiry in response to the findings of the Volcker Inquiry final report, and has provided the Inquiry with the full powers of a Royal Commission, including the authority to compel witnesses and the production of documents.

As the Prime Minister has noted, the Cole Inquiry is arguably the most thorough and comprehensive investigation initiated in any of the 66 countries named in the Volcker Inquiry final report into the UN Oil-For-Food Programme. The Australian Government is committed to providing full cooperation with the Inquiry, including providing access to all relevant documents and officers. This policy extends to all levels of government, and I note that the Prime Minister, the Deputy Prime Minister and Minister for Trade, and the Minister for Foreign Affairs as well as current and former ministerial staff and public servants have appeared before the Inquiry. To date, at least fourteen Commonwealth departments and agencies have provided documents and more than 70 current and former Commonwealth officials have submitted statutory declarations to the inquiry.

Senior Counsel Assisting the Inquiry, Mr John Agius SC, noted on 14 March 2006 that the Inquiry had the power to investigate and make findings in relation to the knowledge of the Commonwealth of alleged misconduct by Australian companies participating in the Oil-For-Food Programme. The Commissioner has himself issued a statement about the scope of his Inquiry, making clear that if during the course of his Inquiry it appears to him that there might have been a breach of any Commonwealth, State or Territory law by the Commonwealth or any officer of the Commonwealth related to the terms of reference, he would approach the Attorney-General to seek a widening of the terms of reference to enable him to make such a finding. The Commissioner also said that this point had not been reached.

Since the Inquiry commenced its public hearings, the Australian Government has acted on a number of occasions to expand and clarify the Inquiry’s terms of reference, and to give the Inquiry an extra three months to deliver its report. In each case the Australian Government has acted quickly to respond to requests made by Mr Cole. The government’s actions have at all times been consistent with its ongoing commitment to ensure Mr Cole has all the powers, resources and time he needs to conduct a thorough inquiry.

During the course of the Inquiry’s hearings, the question of the treatment of claims for legal professional privilege under the Royal Commissions Act has arisen. Public attention has focused to an extent on a draft statement of contrition by Andrew Lindberg, former CEO of AWB, which was inadvertently produced to the Inquiry. As a result of Mr Cole’s decision to reject AWB’s claim for legal professional privilege over the draft statement of contrition, AWB applied to the Federal Court for review of Mr Cole’s decision, challenging not just Mr Cole’s decision on the document, but also his capacity to determine claims of legal professional privilege.

While the Federal Court decision in AWB Limited v Cole dismissed the application by AWB on the facts of the case, it also cast significant doubt on whether Mr Cole (or any other person appointed under the Royal Commissions Act) has the power to require the production of a document for inspection where a claim to legal professional privilege has been made.

Mr Cole has expressed his concerns with the decision to the Australian Government and has sought urgent amendments to the Royal Commissions Act, noting that legal professional privilege claims have been made in respect of many documents that have not been produced to his Inquiry.

The Australian Government has accepted that it is desirable to amend the Royal Commissions Act to enable Mr Cole to complete his Inquiry expeditiously, and that this should be done as soon as possible. We are therefore seeking passage of this bill in the current Winter sittings. Once passed, the amendments will have immediate effect in assisting Mr Cole with his Inquiry.

The amendments to be made by the bill will put beyond doubt that a Commissioner may require the production of a document in respect of which legal professional privilege is claimed, for the limited purpose of forming an opinion about that claim. The amendments will not preclude privilege claims or prevent an application for review by the Federal Court of a Commissioner’s decision on a privilege claim.

Essentially, the bill is intended to reflect the position that the Australian Government understood was the case prior to the decision in AWB Limited v Cole. While passage of the bill will, of course, be of immediate benefit to the Cole Inquiry, it will also clarify the law with respect to legal professional privilege under the Royal Commissions Act more generally.

The Australian Government has repeatedly shown its willingness to address any concern raised by Mr Cole and it will continue to do so. The amendments to be made by this bill provide another example of this willingness.

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

The Royal Commissions Amendment Bill 2006 can be summed up in the four words that were used to sum it up in the other place: too little, too late. It is too little because it does nothing to address the key obstacle to Commissioner Terence Cole uncovering the whole truth about the wheat for weapons scandal, and we all know what that is. It is the restrictive terms of reference that Commissioner Cole has to operate under. It is too late because the little it does do should have been done months ago. Labor recognised the problem back in March. If this issue had been addressed then, we would have avoided the expense and delay of the Federal Court case, which told the government what Labor told them for free—that we need action to stop the abuse of legal professional privilege to obstruct the inquiry.

Having recognised that problem in the first place, Labor supports this bill to remedy the problem. However, it should be clear to all senators that this bill is no solution to the real problem affecting Commissioner Cole, and that is, as I have said, his restrictive terms of reference—and I will come to that later—which this government has to take responsibility for.

This bill, in particular, will make amendments to the Royal Commissions Act 1902. The amendments will have an effect for the current inquiry into the involvement of Australian companies in the UN oil for food program and that is why we are dealing with the legislation here today not only promptly but urgently. However, the bill will also have a more lasting effect for all future commissions exercising powers under the act. The bill will provide a special procedure for commissions to determine the validity of claims for legal professional privilege over documents a commission seeks. Of course, legal professional privilege is a common law rule of evidence that prevents courts from requiring the production of evidence that would disclose confidential communications between a lawyer and their client. It is an important principle of justice, as clients should feel free to be able to provide full instructions to their lawyers so that lawyers can provide complete and accurate advice. This freedom is compromised if clients fear that their instructions could subsequently be used against them in a court.

However, legal professional privilege does not apply to all communications between a lawyer and their client. In order to attract the privilege the communication must have been made with the dominant purpose of either obtaining legal advice or in relation to actual, pending or reasonably anticipated litigation. As a result, not every claim of legal professional privilege is a valid one. It does concern Labor that we may be seeing an increasing trend for some companies to make exaggerated claims of privilege or to conduct certain business affairs in the presence of lawyers simply to form the basis for a later claim of privilege. We have seen examples of this in the current AWB, that is, the Australian Wheat Board, case, and to some extent in the James Hardie case before that. Parliament does have the opportunity to send, and should send, a strong message that this simply is not on. To properly protect the privilege we cannot allow it to be misused. Legal professional privilege is intended to be a safeguard in our system of justice, which relies on openness between lawyers and their clients. It is not meant to be a cloak for hiding unlawful conduct.

The bill does go some way to sending that message to businesses and others that might want to hide under that cloak by streamlining the process for assessing claims of privilege in the context of royal commissions. This should be a disincentive against making trumped-up claims by ensuring that the onus to pursue privilege claims lies with the claimant, not with the commission. It would provide that legal professional privilege remains a reasonable excuse for failing to provide requested documents to a commission only if either a court or a member of the commission has accepted that the document is in fact privileged.

However, under this bill a member of a commission would be empowered to demand by written notice the document for at least inspection in the first instance. Inspection could be made by either the member or a person authorised by the member—for example, an adviser. If the claim is accepted, the commission would be required to disregard the document for the purpose of any report or decision the commission makes.

The first question of course is: why is this bill necessary? It has clearly, in the context of this debate, been brought forward by the government to solve a problem. It is necessary because of a Federal Court case involving the Cole commission—that is, AWB Ltd against Cole. This case involved precisely the sort of exaggerated claim I am talking about today. AWB claimed privilege over the now infamous draft statement of contrition—not everyone will recall it, but I know many here in this chamber and certainly many in the gallery will—which had been produced in December 2005. Commissioner Cole determined that privilege was not attached to the document and there was no reasonable excuse for it to be withheld. AWB then applied to the Federal Court to order Commissioner Cole not to use the document. The Federal Court found that the document was not subject to privilege on the rudimentary ground that it had not been produced and circulated for the dominant purpose of obtaining legal advice. In short, it was produced for the purposes of public relations, not legal advice—and AWB’s public affairs department went into overdrive on that.

However, the court cast serious doubt over whether the commissioner also had the power to demand to inspect the document in order to make a determination on the claim of privilege. Ultimately, the court did not make a binding determination on the issue, but it did point out that, in principle, privilege would prevent the commission from inspecting a document over which privilege is claimed and that any abrogation of legal professional privilege to allow such an inspection could only be made by clear and unmistakeable language in the RCA, not merely by implication.

So that is the vital change that this bill makes. In providing a special process it makes it crystal clear that a commissioner can demand to see a document in order to make his or her determination over the matter of whether it can be admitted into evidence. The fact is that determining whether a document meets the dominant purpose test of legal professional privilege often requires the decision maker to see the document. In the House of Representatives, the shadow minister referred to concerns that were raised by the Law Council about the possibility that commissioners could be prejudiced by seeing documents that are later held to be privileged. It is a point that to make a determination you need to see the document. The Law Council raised the issue of whether that would prejudice the proceedings. As the shadow Attorney-General indicated, we are satisfied that adequate safeguards are in fact in place to prevent this problem.

Labor is convinced that this bill merely streamlines the process by putting the onus of commencing litigation on the claimant, not the commission. This should deter false and exaggerated claims as well as reducing the incidence of litigation—and the expense and delays that go with it—during the life of the commission. But let me make it clear that this bill does not in any way affect the substance of legal professional privilege or the protection it affords to lawyers and their client communications.

Having described what the bill does, I want to make it absolutely clear to the Senate what this bill does not do. The bill does not remove the obstacles to a full investigation by Commissioner Cole into the wheat for weapons scandal. The bill does not address the restrictive terms of reference with which the government has restricted the inquiry. The bill does not demonstrate any serious commitment to a full, open and transparent inquiry into what really happened behind the Iraq kickbacks scandal and how deeply this government is embroiled within it. Whether this bill passes or not, Australians can have no faith that the Cole commission will get to the whole truth of this shameful episode while it has the restricted terms of reference that have been provided to it by this government.

As I said, the reason for that is that this government has imposed terms of reference that restrict the inquiry. These terms are like blinkers, designed to deprive the inquiry of its peripheral vision, where if it focused its attention it might find a whole lot more. The Minister for Foreign Affairs, the Minister for Trade and even the Prime Minister himself might be examined a little closely because, when you look at their responsibilities, questions remain about whether they have failed in their responsibilities to protect the good name of Australia, questions remain about whether they have maintained an openness of government and questions remain about whether officers or ministers may have breached administrative law, international law or criminal law in Australia. We will perhaps for some time question whether the Cole commission might, with wider terms of reference, have found the answers.

It is very important to look at those sorts of issues, because in such an issue as this there should be no doubt that the Cole commission should have full and open powers to investigate all of the issues so that in the end, whatever the result might be, we can come away with the confidence that all of those stones that should have been turned over have been turned over and that everything that should have been brought to light has been brought to light and examined in the cold, hard light of day. But when you have a government that has imposed terms of reference which seek to constrict the ability of the commission to look under all of those rocks then you do have a problem—a manifest problem within government. You have to ask: did this government turn a blind eye, or was it involved in a systemic operation to undermine the Iraq sanctions regime? These questions will preoccupy us for some time, I suspect. It is an issue that goes to the heart of the integrity and competence of this tired government.

Let us not forget what happened here. An Australian company, not just any company we sometimes like to talk about but an Australian company that was Commonwealth owned for some time and to this day retains a Commonwealth sanctioned monopoly on the export of wheat, paid over $300 million in kickbacks to the regime of Saddam Hussein. At the same time Australia was a party to the United Nations sanctions against Iraq and the Australian government was preparing for war against Iraq to remove Saddam as a dictator. The bottom line is that, while the Australian government was asking our men and women in the Navy to participate in a blockade against Iraq, AWB was paying out $300 million. You have got to ask yourself: was the AWB undermining those efforts being made by paying kickbacks to prop up that very same regime? When you look at that scenario you do have to ask: how do the people who put that effort and energy in on behalf of our Defence Force in serving our country feel? How do they feel about this government who may have turned a blind eye and who may have not done the right thing by them? I cannot speak for them but you would have to put a question mark about how they feel about their operation. They would want to be proud to be serving this country and representing us internationally and they would want to be proud to hold their heads up and say, ‘We are doing the right thing internationally.’ They would not want to have that feeling in the back of their minds that there was a company, AWB, paying kickbacks to Saddam Hussein and they would wonder what kind of involvement the Australian government may have had.

We need to know what role the government played in the scandal. It could have been sheer incompetence. It would not be surprising; they seem to have demonstrated it everywhere else. They could claim sheer incompetence. They could put their hand up and say, ‘It was just absolute incompetence on our behalf.’ That is probably their best defence. Was it a failure to read cables, pick up the 29 warnings or take the necessary action? In the foreign minister’s case was it failure to follow up his own requests for more information, scribbled in the margin of one of the cables he did not apparently bother to read? It is all of that. That is the government’s best argument in all of this, I have to say: that they were incompetent, or maybe we will even accept lazy. Or perhaps, more plainly, they were just stupid. These are ministers with front-line responsibilities for our national security and economic wellbeing, but it seems that they do not read cables.

Should we accept incompetence as a defence or was it more than that? Was it wilful blindness? I do not know. Was it a sideways glance, a nod and a wink and ‘It’s okay’? We might not know. But the public should know. The government should ensure that if there is a suggestion that those matters are out there they can wipe them off by saying that they will ensure that the Cole commission has a clean, wide, open reference to make sure that we can then take those off the table. Otherwise we are left with all those unanswered questions.

We cannot make the accusation, though we can raise it: was it a deliberate action? We do not know. With all of the scenarios it is no exaggeration to say that this is one of the most appalling scandals I have seen in the history of this Commonwealth government. Yet we have an inquiry that is prevented from examining the most pressing and serious questions in respect of the whole matter. How did the Australian government betray the Australian people and the Defence Force and those people who are serving their country by letting money flow past their blockade into the treasury of one of the world’s most ruthless tyrants? One thing we do know is, whatever happens, the Howard government has continued to ensure that we will not be able to examine it completely, that there will continue to be a cover-up.

That has not changed one jot with this bill. It is a sensible bill, though, that makes a necessary, albeit modest, procedural change. But it does not go to the core mechanism: the restrictive terms of reference, as I have said. Even this little change has not been something the government has done willingly. It took the expense and delay of a Federal Court case to show them what action was needed. Of course, they do not have to take our advice. It would have been helpful if they had. They could have looked at the issue in more detail but they chose not to. Labor had raised the issue of legal professional privilege stymieing the commission’s operation in March. But, notwithstanding all that, we are pleased that the government are finally addressing the concerns that Labor raised months ago.

But as the tenor of my speech today highlights, we are disappointed with the delay. We are disappointed that the government had an opportunity with this bill to provide a better course of action by saying in their second reading speech that they had also examined the issue of the terms of reference and they agreed that they should be broadened. But they have not gone there. We do want the commission to complete its job as quickly as possible. We would have preferred to be debating a bill addressing the privileges issue weeks ago but we are pleased to support it today and facilitate its urgent passage through this parliament so that Commissioner Cole can continue his work with minimal further interruptions. But the government cannot be allowed to continue their ruse that the bill demonstrates their commitment to helping Commissioner Cole to find the truth. That is just simply baseless.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

We have heard from the opposition that the bill before us amends the Royal Commissions Act 1902 to clarify the operation of the act in respect of claims of legal professional privilege. The Royal Commissions Amendment Bill 2006 is a result of a request by the Hon. Terence Cole, commissioner of the current inquiry into certain Australian companies in relation to the UN oil for food program, better known to most Australians as the Cole inquiry into the AWB. While the bill may assist the commission to get to the bottom of the AWB’s involvement in the kickbacks to the Saddam Hussein regime via the oil for food program, it will not in fact help to uncover the extent of the Australian government’s knowledge of the scandal or why the Australian government failed to act on no fewer than 29 warnings that it received on AWB’s possible involvement in those kickbacks.

The government’s fingerprints may not be all over the AWB’s feather-nesting of Saddam Hussein, but its failure to investigate warnings, to cooperate with UN investigations, to expand the Cole inquiry terms of reference or to take any responsibility and its blocking of Senate attempts to ask questions, we say, make it culpable nonetheless. This government has become arrogant and reckless and is abusing its parliamentary power to avoid responsibility, and this is one example of that.

The request to amend the Royal Commissions Act 1902, as this bill does, was made after Commissioner Cole rejected a legal professional privilege claim over the document referred to as the ‘draft statement of contrition’, which was inadvertently submitted to the inquiry by AWB Ltd. AWB subsequently applied to the Federal Court for review of Commissioner Cole’s decision, challenging not just the decision on the particular document but also his capacity to determine claims of legal professional privilege.

The Bills Digest notes that the litigation was in the context of long-running disputes over the production of documents by AWB Ltd. In February this year, Commissioner Cole said that the situation with AWB’s claim for legal professional privilege had almost reached the point of absurdity. Commissioner Cole further revealed, on 30 May, that he was not satisfied that the company had fully responded to 14 formal requests for documents over the last five months. It has also been reported that a further 1,200 documents or categories of documents, with a further long list of hundreds of documents, may also have been the subject of legal professional privilege claims by AWB.

The Federal Court held that the application by AWB should be dismissed, that the document in question was not subject to legal professional privilege and that Cole had the power in the circumstances of the case, as the document had been inadvertently provided to the inquiry, to form an opinion on whether the document was subject to legal professional privilege. However, the decision did cast some doubt on whether Commissioner Cole or any future person appointed under the Royal Commissions Act has the power to require the production of a document for inspection where a claim to legal professional privilege has been made. The court did not make a binding determination on this issue. Federal Court judge Justice Young did point out that in principle the privilege would prevent the commission from inspecting a document over which the privilege is claimed and that any abrogation of legal professional privilege to allow such inspection could be made only by clear and unmistakable language in the Royal Commissions Act, not merely by implication.

While legal professional privilege is an important principle of justice, concerns have been raised that some companies and some lawyers are making exaggerated claims for privilege or, in some cases, conduct certain business before a lawyer in order to claim legal professional privilege. Commissioner Cole was understandably concerned about the judgment, given the sheer number of documents that AWB have reportedly claimed legal professional privilege over. The explanatory memorandum to the bill says:

Mr Cole has expressed his concerns with the decision to the Australian Government and has sought urgent amendments to the RCA, noting that LPP claims have been made in respect of many documents that have not been produced to his Inquiry.

The bill therefore intends to put beyond doubt that any current or future commissioner appointed under the act may require the production of a document in respect of which legal professional privilege is claimed for the specific purpose of making a finding about whether to accept or reject it. The bill will still require the final decision to be reviewable by the courts. The Democrats believe that, given concerns that some companies and lawyers are increasingly taking advantage of legal professional privilege laws, it is appropriate that it is made clear that the commission has the right to determine whether in fact a document is subject to legal professional privilege. Because of this, we support the intent of the bill.

However, the Law Council questioned whether the commissioner would be influenced by the content of such documents when writing the report. The concern is that this may in turn lead to allegations of actual or apprehended bias by affected parties, which may be especially important in cases such as the Cole inquiry, where the commissioner is making findings of liability for individuals and corporations. Where legal professional privilege has been claimed before the commission, new subsection 6AA(3) makes it clear that the commission may require production of the document for inspection by the commissioner and/or an authorised person or persons for the purpose of deciding whether to accept or reject the claim. The Bills Digest notes:

... in practice under the Rules of Court in Australian jurisdictions, if it is undesirable for the judge who will hear the case to see the document in relation to which the claim of privilege is made, a discretion is allowed for the court to decide that the question of privilege should be decided by a different judge ... Issues of bias are completely avoided by this process.

Although this is an option under new subsection 6AA(3) of this Bill, it is not a specific requirement.

Unlike Labor, the Democrats do not think that there are appropriate safety nets in this bill to prevent bias. Therefore, I will be moving an amendment that will give the commissioner a specific discretion to have another authorised person related to the inquiry decide questions of privilege so that the final report is not influenced in any way by the material contained in documents, if found to properly attract legal professional privilege.

I will now return to the question of the government’s failure in its responsibilities to the international community and the Australian public. Whatever Mr Howard might say, politicians are not here just to score political points. This is not, after all, a game of football that we are conducting. In our view, government ministers have a very serious duty and obligation to serve the interests of the country and to do all they can to uphold their legal responsibilities.

The obligations of members of the United Nations, including Australia, to enforce sanctions against Saddam Hussein’s government were very clear. United Nations Security Council resolution 611 makes it clear that the government of Australia was bound to prevent any Australian company or individual making payments to the Saddam Hussein government or to anyone acting on behalf of that regime. In acknowledgment of the UN Security Council resolution, the Australian government in fact amended the Customs (Prohibited Exports) Regulations to say that goods could be exported to Iraq only if the Minister for Foreign Affairs granted an export permit.

The simple fact is that, whatever AWB has done, the federal government had the legal responsibility to know and to ensure that Australian companies were not breaching international sanctions. Clearly, they failed in this responsibility—and they failed despite receiving 29 different warnings that AWB may be involved in kickbacks to Saddam Hussein’s regime. You would think that one or two warnings would be enough, but to ignore 29 warnings suggests that they did not want to know.

From 1998 to 2003, Australian intelligence gave something like six warnings that the Iraq government were using transport companies, including the Jordan based Alia Corporation, to circumvent United Nations sanctions by charging commissions. From about January 2000, the Australian government received several warnings from the United Nations that AWB may be involved in giving illegal commissions to Saddam Hussein’s government. It is reported that in one cable the United Nations asked if Australia would make discreet high-level inquiries to ensure that AWB were not in breach of sanctions. To the best of our knowledge, no discreet high-level investigation was made and, instead, DFAT responded without first contacting AWB, saying: ‘We think it unlikely that AWB would be involved in a breach of the sanctions regime.’ There were 29 warnings that we know of, and they failed in that responsibility.

The government’s refusal to accept any responsibility risks causing major harm to Australia’s future agricultural, trading and diplomatic activities and, domestically, it further destroys public trust in governments. Even if they did not care about Saddam Hussein’s sanctions—although Mr Howard obviously cared enough about Saddam Hussein to attack his country, helping the United States to kill possibly 100,000 Iraqis in that event; but of course they do not want to know exactly how many there were, and there are still no confirmed figures—the failure to ask about Abu Ghraib torture, weapons of mass destruction, depleted uranium or Iraqi civilian deaths points to selective intelligence gathering and gross hypocrisy on the part of a government that has again damaged our standing in the international community.

Similarly, domestic scandals such as ‘children overboard’, Cornelia Rau and Vivian Solon demonstrate a government that refuses to take accountability seriously. It is an absolute disgrace that the Minister for Trade can state on 41 separate occasions and the Minister for Foreign Affairs can state on 27 separate occasions that they ‘could not recall’, ‘could not remember’ or ‘had no recollection’ whether they had read warnings about AWB’s possible involvement in providing kickbacks to Saddam Hussein’s regime. That is either sheer incompetence, which the ministers in question should be sacked for, or it is a wilfully arrogant government whose ministers, to avoid any responsibility or liability, purposely avoid formal damning communications.

These are ministers with front-line responsibility, including for the nation’s security, and they claim that they, or presumably their staff, cannot possibly read everything that comes across their desk. I would say it is lucky that AWB was not plotting a terrorist attack! As we know, a very different standard is applied to a person ASIO suspects of knowing another person who may be plotting an attack or may be just thinking about plotting an attack. They will be detained for days without legal representation—and their memory will have to be a lot better than that of the Minister for Foreign Affairs.

The experience of a number of Senate inquiries—most notoriously the ‘children overboard’ inquiry—has shown that ministers from this government deliberately and frequently use their personal staff as a firewall to excuse themselves from responsibility and full scrutiny about what occurs. Sometimes ministerial staff are used as scapegoats, are sacked or are promoted out of the office, and the minister simply wipes his or her hands clean of the messy, bothersome affair. Past inquiries in the Senate have identified this problem and proposed solutions—but of course these, too, have been ignored by this government. Again and again, members of the government have been able to get away with the lines ‘to the best of my knowledge’ or ‘I do not recall’, without facing proper, open and transparent scrutiny.

The prevailing culture of government deception and cover-up is made much worse with the government having control of the numbers in the Senate. The government may be reluctantly agreeing to fix the barrier to Commissioner Cole getting access to documents, but when are they going to fix the problem for the Senate? All sorts of excuses have been given for not supplying documents ordered by the Senate. We have had everything from ‘commercial in confidence’, to a document which is ‘provided to cabinet’ or is ‘legal advice’—the list goes on—and it remains as inconsistent as it has been over the last few years.

Unfortunately, Commissioner Cole has no powers to make determinations about whether ministers have done their jobs under Australian domestic law or have refused to hand over documents that might put them in a bad light. The Prime Minister refused to amend the terms of reference to allow Commissioner Cole to make findings as to whether ministers, their offices and departments have discharged their duties under Australian administrative law and under international law. But he has argued that Commissioner Cole is wrong in his claim that a change to the terms of reference is needed to make such determinations. We can only hope that Commissioner Cole puts that claim to the test. The Prime Minister obviously has something to hide.

In the February estimates, the government declared a blanket ban on public servants responding in any way to any questions about AWB and the Saddam Hussein kickback scandal. This gag was even extended to ASIO and to CrimTrac. There is simply no way that the government would have tried this on without control of the Senate. Surely this is a clear case of contempt of the parliament. The Clerk of the Senate, Mr Harry Evans, provided advice on this unprecedented move, stating:

... my colleagues and I have been unable to find any precedents for this direction.

He also pointed out:

On various occasions, questions have been asked and answered in estimates hearings about the conduct of commissions of inquiry, for example, the HIH royal commission in 2003 and the building industry royal commission in 2002.

Mr Evans, that fierce defender of the Senate’s role in holding the executive of government to account, will not be with us in three years time. His forced 10-year contract expires in 2009 because of laws that were passed in this place and supported by the ALP. His term cannot be renewed, as we all know.

We agree with the sentiments that are reflected in the ALP’s second reading amendment that was put in the House of Representatives—that is that, if the Howard government has nothing to hide in the wheat for weapons scandal, it would expand the Cole Commission’s terms of reference to allow Commissioner Cole to make such determinations. But the most galling aspect of the government’s behaviour is its refusal to ask precisely how this failure occurred so that it can ensure that such an economically and diplomatically damaging scandal does not happen again. The insistence by government members and officers that they could not or should not have done anything differently beggars belief. Apparently, we must all sit and wait and see if something like this happens again, because nothing is going to be done to stop it happening. Once again, we are seeing the consequence of a government having total control of the Senate—an attitude which displays serial contempt for the electorate.

If Mr Howard continues to refuse to extend the royal commission’s terms of reference, as Commissioner Cole indicated is necessary, then, at the very least, Mr Howard should have the gumption to admit that the government failed in its responsibilities and outline how he and his ministers will ensure it does not happen again. We say that it is time that this government started acting like a government: in a responsible, accountable and transparent manner. The arrogance of this government is a disgrace to this country.

The Democrats will be moving amendments that will overcome the problem identified by the Law Council and encourage the commissioner to consider allowing another member of the commission to make a judgment about legal and professional privilege, removing any real or perceived bias that might arise from sighting a document which it is subsequently determined should not be admitted on the basis of legal professional privilege.

Chris Evans (WA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I also want to address some remarks to the Royal Commissions Amendment Bill 2006. I note that Senator Ludwig presented the detailed case on behalf of the Labor opposition, but I want to add what I think are some important remarks regarding this matter. The bill is a response to issues of legal professional privilege that have arisen at the Cole royal commission into the AWB wheat for weapons scandal. The bill provides a procedure whereby royal commissions will be able to determine whether or not claims of legal professional privilege over documents sought by an inquiry are valid. It is a straightforward change and one that Labor supports.

However, the context of this bill, the wheat for weapons scandal, is characterised by the Howard government’s incompetence in discharging its responsibilities and its culpability in these matters, and its more recent attempts to avoid scrutiny, both at the inquiry and in the parliament. The need for this bill arises out of a dispute between the Cole commission and AWB over that company’s claims of legal professional privilege over the documents sought by the inquiry. The bill provides clarification of an issue arising out of the Federal Court’s findings in the case between the commission and AWB. The court determined that the commissioner has powers under the Royal Commissions Act to determine whether a document is covered by legal professional privilege, but it did cast doubt over a commission’s power to demand inspection of a document to make such a determination. This bill explicitly provides that power to a royal commission.

The fact that we are debating this bill today reflects adversely on the competence of the Attorney-General. Back in March this year, the shadow minister for foreign affairs and the shadow Attorney-General jointly alerted the government to the need for action to address AWB’s exaggerated claims of legal professional privilege and the hindrance that this was proving to the Cole inquiry. At the time, the Howard government’s Attorney-General dismissed Labor’s call as misconceived. It took the delay of an expensive case in the Federal Court to prompt this legislation—legislation which we have been calling for for months and which was arrogantly and wrongly dismissed by the Howard government’s Attorney-General.

What this bill does not provide is the extended terms of reference that the Cole inquiry needs in order to get to the bottom of the wheat for weapons scandal and to report on the much broader issues of the government’s culpability in this shameful episode. The Howard government has deliberately designed the terms of reference for the inquiry to preclude it from making findings in regard to the government’s behaviour—clearly one of the key areas of interest and clearly one of the areas upon which a royal commission finding would be required. This is a government political strategy to protect itself from any assessment of its incompetence or culpability in these most serious matters.

The wheat for weapons affair is the largest corruption scandal in the Commonwealth’s history. Australia’s monopoly wheat exporter has systematically rorted the oil for food program to provide nearly $300 million of kickbacks to Saddam Hussein. The $300 million that went to the Saddam Hussein government should have gone to buying food, medicine and humanitarian supplies for the Iraqi people. The Howard government was well aware that the Saddam government was rorting the program in cooperation with its suppliers, and it used that fact to support its case for war against Iraq. The fact that an Australian company was the biggest single rorter of the scheme shames this country, immeasurably damages our reputation as a trading nation and undermines our legitimacy in Iraq.

We saw the perverse situation where Australian troops were deployed to fight in Iraq against an enemy funded in part with money rorted by Australia’s monopoly wheat exporter. We had the situation where Australian troops were at risk of death and injury from weapons funded by the rorting of wheat sales to Iraq. That is an incredible position, one that I think shocked the nation and one that deserves the fullest of examinations by the royal commission. While the Australian government has denied all responsibility for ensuring that Australian companies complied with the obligations of the oil for food program, that clearly is not good enough. It flies in the face of the specific regulations stating that Australian companies can export to Iraq only under an export permit issued by the Minister for Foreign Affairs where ‘the minister is satisfied that permitting the exportation will not infringe the international obligations of Australia’.

As we know, the Howard government has had 29 separate warnings over many years in regard to AWB’s engagement with Saddam Hussein’s regime. It beggars belief that none of those warnings set off an alarm bell at senior levels of government. I do not know whether it was the cosy nature of the National Party wheat club, where the pressure to ensure that nothing interfered with wheat sales to Iraq was insurmountable, but clearly the government was engaged at a very senior level with the players in these matters. Clearly it was warned by people of very senior rank about all of these matters.

Of course, we know that, in the lead-up to the Iraq invasion, we spent a great deal of effort monitoring the intelligence issues surrounding Iraq at the time. While we clearly got a lot of the intelligence wrong or misread the intelligence, I do not for one minute believe that our intelligence did not show up the involvement of AWB in the kickback scheme that was funding Saddam Hussein’s regime. Despite all of these warnings, the government says it knew nothing.

The Cole commission report will hopefully add to our knowledge of all these matters, as have the hearings. But the key problem for us is that the extent of the government’s involvement and its culpability will not be tested because of the government’s refusal to widen its terms of reference. All of this is on the public record and I do not pretend that I add anything to it—although, as I say, I think it is probably worth repeating in one sense because of the enormity of what has occurred here. I think there should be continuing outrage amongst Australians about what has occurred. But I know that the news cycle moves on and the government is relying on that in terms of its defence in these matters.

What I wanted to comment on today—and I think Senator Allison touched on it—is the government’s unprecedented step of directing officials at Senate estimates hearings not to answer questions on any matter that may be considered before the Cole inquiry. They gave a very broad direction to officers not to answer questions on any matters pertaining to issues that may come before the royal commission. It is completely opposite to the approach they took to the terms of reference of the Cole inquiry. The Cole inquiry’s terms of reference are limited and they prevent the inquiry from going beyond set boundaries. But their interpretation of what officials of departments could answer at estimates was very broad indeed. Anything that mentioned wheat, Iraq, government departments, ministerial roles et cetera was immediately ruled out of order as being potentially a matter that could arise before the Cole royal commission. In other words, the defence against the Senate estimates inquiry into the matters was as broad as it possibly could be.

We know that there is no precedent for this. There is no support by past practice for the government’s position. In fact, the Clerk of the Senate pointed out in his advice that there is no precedent for the position that the government has taken. It has taken its position in relation to preventing Senate inquiry into its behaviour out of pure self-interest. It has taken it to protect itself. Commissioner Cole has indicated that he is more than capable of conducting his inquiry and coming to his findings, despite what goes on outside of his hearing rooms. He is unperturbed by any other inquiry into or investigation of these matters.

We saw last month the government again refusing at the second round of estimates to allow any questioning of officials about their capacity in this regard. What little questioning we did get to do on matters tangentially related to these matters revealed that the government’s responses to the Cole commission’s requests for information were less than comprehensive. Commissioner Cole had to persist in his efforts. A lot of information initially requested was not provided and was only provided after further requests by Commissioner Cole.

My main point is that the Senate has been denied its ability to hold the government to account. The areas that the Cole commission is not covering will remain untouched at this stage. Investigations by the Senate into the actions of the government have been prevented. So you have the Cole commission prevented from looking at the government’s behaviour and you have the key parliamentary accountability mechanism—the Senate inquiry and estimates systems—prevented from looking at these matters.

The government even prevents the Senate from looking at those matters that stand outside Commissioner Cole’s terms of reference. The senators would have been sensitive to the issues before the Cole commission. They would have been sensitive to the issues of the rights of individual witnesses et cetera. But there are a whole range of matters which have not been properly considered or investigated that could have been investigated properly by the questioning of officials in Senate estimates. But, because of the government’s direction, that scrutiny was not able to take place. As a result, a whole lot of issues remain to be investigated. The gaps that existed in the terms of reference of the Cole commission have been left unfilled. The gaps in the areas of investigation have not been able to be pursued by senators because of the government’s blanket ban on questions before Senate estimates. Of course, we all know that any attempt to get a wider inquiry beyond the Senate estimates process will be prevented by the government’s use of its majority in the Senate.

I can only assume that the government think that, by delaying any Senate estimates scrutiny of these matters, they gain time, public interest will wane in the meantime and, in a sense, the trail will go cold. They hope that, by allowing the effluxion of time, our capacity to hold people to account will diminish. I think they are right that the passage of time will make it harder for the Senate estimates committees to do their job, because the fact that information revealed will be revealed so late in the piece will make it less politically potent for the government. So, as I said, I think their political strategy is likely to be successful. Of course, it reflects the arrogance that the government have developed in their use of their Senate majority. It reflects the arrogance that has come about over 10 years of government. I think it is of concern to all Australians that such actions have been perpetrated by the government.

In terms of the debate about whether or not Senate estimates committees should have been allowed to investigate these matters, I will just put on the record that, despite the government spending millions of taxpayers’ dollars on two unsuccessful inquiries into the Centenary House matter—inquiries which came to nothing—it did not prevent them from talking about those matters, making comment on those matters, and raising those issues in estimates hearings and in parliament during the whole period of those inquiries. So it is one rule for them and one rule for the rest, and, when they think they are under any political threat, the rules are different.

Of course, that was also true during the inquiry that Commissioner Cole ran into the building industry. There was no shortage of dorothy dixers in the parliament and no shortage of commentary by government ministers and backbenchers as they aired their views on those matters, because they thought the target was trade unions. They thought the target in the Centenary House inquiry was the Labor Party, so a different set of rules applied. There was no attempt to bar questioning, public debate or public inquiry on those occasions. However, when their political life is at risk, when there is a threat to them or their culpability is to be examined, then a whole new set of rules applies because they have to protect their own self-interest. There is nothing about principle or proper process in that; it is all about the protection of base political self-interest. Senate processes have been abused in order to pursue those objectives.

As I know all too well, our capacity to deal with the government’s power in this regard is limited. There is no question that the government’s approach to this is based on the fact that they do because they can. They have the numbers. The change in the balance of power in the Senate has allowed the government to take those actions. No-one should be surprised and no-one should misunderstand the basis of that: it is because the government can. They have the power and they will use it; they have the power and they have used it. What we have seen again in this matter is their capacity to limit the scrutiny of their actions. They did it in two ways on this occasion: one was by limiting the terms of reference. The executive draws up the terms of reference. The government drew up the terms of reference for the Cole commission that prevented any inquiry into their culpability and their actions. They had the power to do that and they exercised it. In having an investigation into AWB’s rorting of the oil for food scandal, their defence was that they had a Cole royal commission, but they ensured that their role in it could not be properly examined.

So what was left for Australians in hoping that proper accountability of government could occur? There was the traditional mechanism of the Senate and its estimates committee process, the Senate and its references committee process—the sort of function that we played in the ‘children overboard’ matter; the function that we have traditionally played in holding governments to account for actions taken, by inquiring into, investigating and ensuring that officials and ministers answered for their actions. As a result of the government’s order to its officials, the Senate was not able to play that role. The reason the government could do that is that they knew they could get away with it, and they got away with it because they knew the Senate had no capacity to overturn that direction. There was no capacity to have an inquiry that the government did not approve of and no capacity to direct officials to answer questions directed at them at estimates hearings. They have the numbers, they have the power and they will abuse it. This is just another example of the government’s capacity and willingness to abuse their Senate majority.

I know this does not interest a lot of people and I know it is a difficult argument, but people do need to understand that the government’s ability to protect themselves from proper investigation of their actions in this matter is a direct result of their Senate majority. They did not need any parliamentary input into the terms of reference for the Cole inquiry, but they did need to have the power in the Senate to prevent proper examination of their behaviour, their actions and their culpability in relation to the oil for food program. The fact that they have been able to abuse their Senate power to prevent Senate estimates committees from getting to the bottom of what really occurred is testament to their ability to exercise that power and prevent the Senate from performing its traditional functions.

A very important secondary point in this debate is that not only are we not able to ensure that there are full terms of reference for any royal commission called by government but also, with the loss of the balance of power in the Senate, with the government majority in the Senate, the main accountability mechanism that the parliament has to hold a government to account—to hold a government’s actions up to the light and to see whether or not they have been proper, moral and in accordance with the law—is denied us. I think that is a very serious state of affairs.

Labor will persist; the story will come out. That is the one thing you know about all of these things: eventually the story will come out. The truth of these matters will out. But the government’s hope is that, by delaying and by trying to allow the trail to go cold, they will defend themselves in the short term. When the truth does out, of course the ministers responsible will have retired and been promoted overseas to ambassadorial posts, and the personal accountability that is called for in these matters will not be there. That is the government’s plan; that is their political tactic—but it is based on pure political self-interest. There is no basis in principle, there is no basis in procedure, there is no basis in precedent.

While we support this bill, I urge senators and others in the Australian community to take very seriously what this government has done in undermining the Senate’s capacity to hold government to account. This is a classic case where the government majority prevents us, the other senators and the Senate from holding the government to account and properly examining its culpability in probably the most amazing Commonwealth scandal that I have ever seen. It is important that the government is held to account. It will not be held to account currently, but Labor will do all in its power to pursue that accountability. As I say, our efforts will be seriously undermined by the government’s use of its majority in this place.

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

in reply—I think a number of points need to be made in relation to today’s debate on the Royal Commissions Amendment Bill 2006. It may assist us if we look at this in a historical context—that is, that the United Nations tasked the Volcker committee to inquire into corruption of the UN oil for food program in relation to Iraq. The Volcker committee handed down its report last year and an inquiry with the full powers of a royal commission was established by this government on 16 November 2005. Of course, terms of reference were provided.

Senator Allison mentioned in passing that we have to look to our international obligations as a country. The Cole inquiry fulfils that obligation in relation to the report handed down by Volcker and his committee. In fact, it is interesting to note that it is the most comprehensive and transparent investigation initiated by any of the 66 UN member states with entities named in the Volcker report. That is indeed a telling statistic. It clearly demonstrates that Australia lives up to its responsibilities and has responded in an appropriate fashion.

The government has provided Commissioner Cole with terms of reference that will allow him to investigate and make findings in relation to Commonwealth knowledge of alleged misconduct by Australian companies participating in the UN oil for food program. That is indeed a wide reference. Commissioner Cole stated on 3 February this year that, if there were any suggestion that there had been a breach of Australian law by the Commonwealth or its officers in relation to the terms of reference, he would seek a widening of these terms of reference to permit him to make a finding to that effect. He also noted that this point had not been reached.

The government—and particularly the Prime Minister—has made it very clear that it would take seriously any request by Commissioner Cole for an extension of the inquiry’s terms of reference. The government’s commitment to enabling the inquiry to do its job is reflected in the fact that it has implemented all extensions and variations to the letters patent that the commissioner has requested. This bill demonstrates a further commitment to the government’s cooperation with the Cole inquiry.

We have heard debate of how this came about. The Federal Court’s decision in AWB v Cole cast significant doubt on whether a commissioner has the power to require the production of a document for inspection where a claim to legal professional privilege has been made. Indeed, when the commission was set up, it was thought that the position on that was rather straightforward. Of course the Federal Court decision now throws that into doubt, and a legislative response is required. I might add that Commissioner Cole endeavoured to resolve this with the parties when this surfaced in March this year. For Senator Ludwig to say that we have done too little too late really is disingenuous because Commissioner Cole requested an amendment on 19 May and we introduced these amendments on 25 May—only a few days after that request was received. Such has been the response of this government to requests made by Commissioner Cole.

Let us return to the decision in the Federal Court. That decision would have forced a commissioner to apply to the Federal Court to determine legal professional privilege claims when the commissioner would know no more about the document than that a privilege claim had been made. These amendments are doing nothing more than clarifying the law as it was understood when this commission was set up. These amendments put beyond doubt that where a person makes a claim of legal professional privilege in respect of a document a commissioner has the power to test that claim. If the commissioner accepts that the privilege claim is properly made, then the document will be returned to that person and disregarded for the purposes of the inquiry. If that claim is rejected, the commissioner’s decision may be reviewed by the court. While passage of the bill will of course be of immediate benefit to the Cole inquiry, it will also clarify the law with respect to legal professional privilege under the Royal Commissions Act more generally. I think that we should look at this in a wider context at this point. This will assist royal commissions set up in the future. While being of immediate benefit to the Cole inquiry, it will have a wider benefit and is therefore a desirable amendment. I note that the opposition is supporting the bill.

There were a number of points made in the debate. Senator Allison said, ‘The Prime Minister has something to hide,’ and senators Ludwig and Evans implied that as well, stating that the government was ‘hiding evidence and information by stopping the Senate from questioning officials’. I think it is quite evident that the government has been totally forthcoming in its cooperation with the commission, and not only in the cooperation of government agencies. I think there are about 14 government agencies that have been cooperating with the commission. No fewer than two senior ministers of this government and the Prime Minister himself have appeared before the commission to give evidence and subject themselves to cross-examination. That is a much greater step in exposing a government to scrutiny than any Senate estimates committee process.

What we have seen is something that we have not seen in this country for 20-odd years: that is, a Prime Minister fronting a royal commission to be questioned and cross-examined. That is hardly the action of a Prime Minister who has something to hide. Indeed, not only did the Prime Minister appear but also two senior ministers—the Minister for Trade and the Minister for Foreign Affairs—appeared. So it is a total furphy and, in fact, a total misrepresentation of the situation by the opposition and the Democrats to say that the government has something to hide by not allowing officials to be questioned at Senate estimates committees. What would be inappropriate is if we ran a parallel inquiry—that is, if we allowed officials to be questioned in a royal commission and had a parallel inquiry at an estimates committee which could well thwart the process of the royal commission. That would be inappropriate. We have gone down the path of saying that a royal commission has been set up and we should abide by that; and, indeed, that is exactly what we have done.

There is an amendment proposed by the Democrats. We can deal with it in the committee stage, but I can foreshadow that the government, for a number of reasons, will not be supporting that amendment. However, this bill is essential for the good working of royal commissions in general and it will benefit greatly the Cole royal commission in particular. I might just add—and I will finish on this note—that there has been extensive debate and inquiry in the Senate and in the House of Representatives in relation to this. This subject has received a great deal of scrutiny not only in the parliament but also in the press and the public at large. Added to that, there has been a royal commission where no less than the Prime Minister and two senior ministers of the government have fronted to be questioned and cross-examined. That is hardly a situation where things are being swept under the carpet. Indeed, internationally, Australia leads the way in what it has done to date in response to the Volcker inquiry and report.

Question agreed to.

Bill read a second time.