Most common issues you raised
Export Control Rules
Industry should be consulted during the development of the operational and technical aspects of the commodity specific rules.
We will develop the rules throughout 2018 and 2019.
Industry involvement in the development of the rules is important to ensure they are fit for purpose. There will be ample opportunity for industry to provide feedback on the details of the provisions and consultation will be undertaken as each commodity specific rule is developed.
The rules need to provide the same level of cover as the existing regulations, ensuring compliance and market access are not jeopardised.
The rules will:
- replace the current Export Control Orders
- set out the operational requirements that agricultural exporters must meet
- be based on the requirements set out in the current Export Control Orders.
Improvements to the export framework will not impact Australia’s commitment to meet importing country requirements.
Powers of the Secretary of the Department of Agriculture
The Secretary of the Department of Agriculture has the power to make or change rules. Industry consultation mechanisms must apply and there must be limitations for the scope and exercise of these powers.
The Bill delegates the power to make rules to the Secretary, consistent with the powers given to the Minister under the current framework.
This allows the Australian government to be more responsive to changes in the global trade environment and importing country requirements.
The rules will be legislative instruments and will be subject to the requirements of the Legislation Act 2003, including parliamentary scrutiny, oversight, disallowance and sunsetting.
The Secretary will need to obtain appropriate government authority to make major changes to the rules. Where changes to the rules have more than a minor regulatory impact, they will need to be subject to a regulatory impact statement. Changes to minor matters (such as technical requirements) can be made more quickly. Stakeholder consultation regarding changes to the rules is important.
The Bill also includes a power for the Minister to issue directions to the Secretary about the Secretary’s rule making power. This direction may require the Secretary to make specific rules or take certain things into account in making rules.
Directions made by the Minister to the Secretary will be a legislative instrument but will not be subject to disallowance or sunsetting. This will ensure the Minister has appropriate oversight of the regulatory framework.
The Secretary of the Department of Agriculture has broad powers to vary, suspend or revoke export licences.
The Bill does not override the requirement for the Secretary to provide procedural fairness in making decisions.
For decisions to vary, suspend or revoke licences the Secretary must give the holder a show cause notice before taking action, unless the circumstances are serious and urgent.
We recognise the significant consequences of suspension and revocation, it is appropriate to take immediate and decisive action in these situations.
The term ‘serious and urgent’ won’t be defined in the Bill given the variety of circumstances that might demand immediate action. The decision to suspend or revoke a licence is also a reviewable decision.
Temporarily or absolutely prohibiting goods from export
Changes to the legislative power enable the Minister to temporarily or absolutely prohibit goods from export. A clear system of checks and balances and clarity on this power is required.
The Bill provides the Minister with the power to temporarily prohibit the export of certain goods, or the export of certain goods to a specified place, where satisfied that it is necessary to protect human, animal and plant life or health, or to secure compliance with an Australian law other than the Bill.
The Minister will have the power to temporarily or absolutely prohibit the export of goods from Australian territory, or from a part of Australian territory, for a period of up to 6 months. This determination will be able to be made if the Minister is satisfied it is necessary to protect human, animal or plant life or health.
A direction from the Minister is a legislative instrument and it must be tabled in Parliament where it is subject to disallowance. The Minister must exercise this discretion in compliance with Australia’s international obligations, including the General Agreement on Tariffs and Trade 1994.
Traceability, where required by the importing country, could be beneficial in some instances. Clarification on how the department will balance importing country requirements against the practicalities of the privacy laws and obligations of suppliers and growers and commercial outcomes is required.
The Bill provides the framework for regulating agricultural commodity exports where required, to facilitate market access and protect Australia’s reputation.
For many sectors, traceability across the supply chain is integral to maintaining market access. It is useful, therefore, to enable regulatory measures in the improved framework that assist with traceability to be applied in any sector in the future, should there be a need to do so.
There is no intention to change the existing regulatory requirements for traceability as a result of this project.
Compliance and enforcement
The inclusion of additional powers and the provision of a more graduated enforcement regime is welcomed. The Bill needs to articulate when it is appropriate to use specific powers.
The Bill seeks to apply the standard compliance and enforcement provisions in the Regulatory Powers (Standard Provisions) Act 2014. This will provide the department with a greater range of compliance and enforcement powers than those that are currently available under the current Act.
We will be able to use a range of modern enforcement tools to deal with non-compliance, including criminal and civil penalties, infringement notices, enforceable undertakings, injunctions and administrative sanctions such as suspension or revocation. These changes ensure that non-compliance can be managed more effectively.
We will develop policies that guide how it targets its sanctions and responds to instances of non-compliance. These policies should not be set out in the Bill.
Fit and proper persons
The new fit and proper person test is prescriptive in nature when compared to the current regime, including extending the required test to the assessment of associates.
The fit and proper person test aims to ensure that persons involved in the export supply chain are trustworthy and will not put Australia’s trade at risk.
We will not hold a person to account for the actions of any or all of their associates. Unless there is some suggestion that the associate is in a position to exercise influence over the person’s business or role.
Every decision involving the fit and proper person test is reviewable.
The cost of transition can be quite high, so there must be a clear economic benefit to making this investment given the department’s financial resourcing.
The improvements to the agricultural export legislative framework are aimed at continued market access, rather than finding significant regulatory savings. Improvements will:
- reduce complexity, duplication and ambiguity
- make legislation easier to understand, administer and use.
These improvements will not impact Australia’s commitment to meet importing country requirements.
When will the transitional arrangements be developed?
We expect to provide the Export Control (Consequential and Transitional Provisions) Bill for comment in 2019. It aims to minimise impacts of the transition on industry. Consultation will be undertaken on the transitional arrangements to ensure industry are aware of their obligations.