OFFICIAL INFORMATION
Introduction Overseas Investment Amendment Bill 1994 Purpose of the Bill Similar legislation proposed in 1990 The 1994 proposal Conclusion Legislative outcome
Introduction
One of the LAC's terms of reference is to monitor the content of new legislation from an "Official Information" standpoint. From time to time, the Committee makes submissions to select committees when relevant information access issues arise. So, for instance, in February 1990 the Committee made a submission to the State-Owned Enterprises (Ombudsmen and Official Information Acts) Select Committee that was established to review the effect of the Ombudsmen Act 1975 and the Official Information Act 1982 on the operation of state enterprises. The LAC recommended that the two Acts should in general continue to apply to the state enterprises(22 see Report of the legislation Advisory Committee (January 1990 to June 1992) Report No 7, September 1992, pp. 14 to 20., as did the select committee.
The reasons for the Committee's view are briefly summarised below:
(a) State enterprises are not simply companies operating as profit-making businesses, as they:
(i) Are hybrids,
(ii) Are owned by the State,
(iii) Have public duties and accountability systems distinguishing them from privately owned companies,
(iv) May have functions which are central to the State, such as policy-making and its implementation, and
(b) Practice shows the value of the Ombudsmen Act 1975 and the Official Information Act 1982 in relation to the state enterprises, and to other bodies with trading functions and with some independence from Government. Principle is also consistent with their continued application, but the varying character of the functions of different enterprises may suggest some flexibility in that application.
Accordingly, the LAC concluded that the two Acts should in general continue to apply to the state enterprises.
Overseas Investment Amendment Bill 1994
Purpose of the Bill
The Overseas Investment Amendment Bill attempted to create an exception from the Official Information Act 1982 for information received by the Overseas Investment Commission.
Similar legislation proposed in 1990
Legislation to achieve a similar result was introduced in 1990(23 Clause 18 of the Law Reform (Miscellaneous Provisions) Bill 1990 sought to insert a new section 12A into the Overseas Investment Act 1973.), but was not carried over to the 44th Parliament. The 1990 bill sought to create a presumption of non-disclosure of information relating to an investment application to the Overseas Investment Commission. The Commission or Minister of Finance could disclose the information only if it was not likely to prejudice the commercial position of any person, and there was no other good reason for withholding it under the Official Information Act. This special process for the release of information would apply only until a final determination was made on the investment application. After that time, by implication, the Official Information Act regime would apply to the information.
In its submission on the 1990 bill, the LAC argued that the proposed provision would:
(a) Bypass the provisions of the Official Information Act that establish a balance between the presumption in favour of disclosure and the need to protect information (including commercially sensitive information) when there is good reason to withhold it (see section 5 of the Official Information Act 1982);
(b) Remove any decision of the Minister of Finance on whether or not to disclose information from effective review, except by the High Court; and
(c) Remove the collective responsibility of Cabinet for withholding information that an Ombudsman might recommend ought to be made available, and replace this responsibility with ministerial control over the disclosure of that information.
The LAC further submitted that the Official Information Act 1982 already recognised that there will be circumstances where commercial interests require protection. The Act's approach requires a consideration of those circumstances in the assessment of whether to withhold the information in each case, rather than expressly excluding certain bodies or classes of information from the ambit of the Act. This approach was confirmed in subsequent considerations of the Act in 1987, and again in 1990 when the State-Owned Enterprises (Ombudsmen and Official Information Acts) Select Committee concluded that the Act should continue to apply to state enterprises.
The 1994 Proposal
Clause 9 of the Overseas Investment Amendment Bill proposed to insert a new section 16A into the principal Act. New section 16A purported to permit all "confidential information" to be withheld until a decision by the Minister of Finance (or others as the bill provided) on the investment application had been made. Once the decision had been made, the Minister of Finance (or others as the Bill provided) were to send to the applicant a summary of the "confidential information" the Minister (or others) considered should be available for release under the Official Information Act 1982. The applicant could respond, stating reasons why the information should continue to be withheld. The Minister (or others) might then omit any "confidential information" from the summary on the basis of that response. Following any resulting changes to the summary, it could be made available in the usual manner under the Official Information Act.
In addition, the nature of the information covered by the definition of "confidential information" in new section 16A was broader than that covered in the 1990 proposal. "Confidential information" included not only information supplied in relation to an investment application, but also the investment application itself, and the fact that such an application had been made, is being considered, or has been granted or declined. The inclusion of the latter meant that the Commission's decision making process on any investment application could remain secret. The LAC considered that this was contrary to principle that, in general, the exercise of statutory functions ought to be transparent.
The proposed amendment also enabled "confidential information" to be withheld indefinitely, as there was a continuing presumption of non-availability of any information excluded from the post-decision summary. The power of the Minister (or others) to define the scope of any exception from the presumption was not reviewable by the Ombudsmen or Ministers collectively, nor were there any guidelines or principles in the proposal about how the power should be exercised. The LAC considered that a provision of this nature erodes the principle established in section 5 of the Official Information Act that information ought to be freely available unless there is good reason for withholding it. The nature of such good reasons is stated expressly in that Act.
The LAC believed that the points raised in its 1990 submission were equally applicable to the 1994 proposal. It was the LAC's view that if the Overseas Investment Commission believed that the Official Information Act 1982 did not adequately protect the information supplied in relation to investment applications then the Commission should seek an amendment to that Act rather than attempt to create an exception to its statutory scheme. As the Official Information Act already recognises that there are general circumstances where commercial interests require protection, any justifications for greater protection for commercially sensitive information by the Commission were likely to apply no matter what body holds the information. The LAC found it difficult to see the rationale for special rules applying solely to the Commission.
Conclusion
The Official Information Act 1982 expressly provides that, information that "would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information" may be withheld unless this action is outweighed by considerations which render it desirable, in the public interest, to make the information available. (24 Sections 9(1) and 9(2)(b)(ii).)
The balance struck under section 9 of the Official Information Act 1982 was carefully examined at the time that Act was drafted, in the amendments made in 1987, and again by the Select Committee's consideration of the Act's application to state enterprises in 1990.
The LAC considered that proposals in the Overseas Investment Amendment Bill 1994 to create an exception from the scheme of the Official Information Act for information relating to investment applications to the Overseas Investment Commission had to be clearly justified, and that any such justifications would probably raise many more general issues about release of commercial information, no matter who held it.
It was the LAC's view that the proper approach would be to raise these issues in the context of amendments to the scheme of the Official Information Act 1982, rather than to seek piecemeal legislative exceptions to the current regulatory regime.
Legislative outcome
As reported back from the select committee on 30 March 1995, the definition of "confidential information" in the Bill was changed to one of "protected information". The LAC considered that this definition was still too broad.
On 1 August 1995, following the introduction of Supplementary Order Paper No. 100, clause 9 of the Overseas Investment Bill (inserting new section 16A) was omitted at the Committee of the whole House stage.