Under the proposed Foreign Influence Transparency Scheme, the head of the Attorney-General’s Department will have the power to issue a transparency notice to an individual acting on behalf of a company or entity whose links to a foreign country are disguised, putting them on the register.
The person will be able to challenge the decision in the Administrative Appeals Tribunal.
But under the scheme, if a person successfully argues for their removal from the register, the government has banned them from launching defamation action against the Commonwealth, even if their reputation is damaged because of a flawed bureaucratic decision to issue the transparency notice.
Attorney-General’s Department officials confirmed under questioning from shadow attorney-general Mark Dreyfus during a committee hearing into the scheme on Monday night that procedural fairness would not apply to a person hit with a notice.
“We accept that a person could perceive that it is not ideal for them to be named in such a notice,” assistant secretary Tara Inverarity said.
Should be no ‘stigma’
Mr Dreyfus has reservations on the ban on legal action.
“The insertion of a protection into the legislation to protect the Commonwealth from defamation actions is surprising,” he told The Australian Financial Review.
“This is particularly so, given the Attorney-General has gone out of his way to state that there should be no ‘stigma’ in a person advocating on behalf of a foreign government, as long as this is transparent.”
Attorney-General Christian Porter defended the ban.
“Ultimately, it’s a question of fact as to whether an entity is a foreign government-related entity, and the transparency notice simply has the effect of describing that an entity has the relevant form or ownership structures to meet the definition in the FITS Bill,” he said.
The proposition that any part of the registration process would give rise to any reputational damage sufficient to constitute a basis for a claim for damages in defamation proceedings is a very unconvincing proposition because characterization of meeting the criteria under the Act is not a negative characterisation.
Series of changes
“Many companies would rather obviously exhibit the legislative features of the definition of a foreign principal set out in the Act. This is no reflection whatsoever on their reputation or integrity of those organisations and no reasonable person would consider that it was, rather it is merely a characterisation of their form and structure.”
Mr Porter unveiled earlier this month a series of changes to the registration scheme. The revisions exempted multinational companies, limiting registration to foreign companies where an overseas government owned more than 15 per cent of its share, held more than 15 per cent of the voting power, appointed at least 20 per cent of directors, could exercise full or substantial control over the company or could oblige the directors to act in accordance with the wishes or instructions of a foreign principal.
Mr Dreyfus’ concerns came as the Labor deputy chair of the committee, Anthony Byrne, warned Beijing to drop its objections to the foreign interference laws, a day after Chinese ambassador Cheng Jingye accused Australia of showing “bias and bigotry”.