Explanatory Memorandum
(Circulated by authority of the Assistant Minister for Immigration and Border Protection, Senator the Hon Michaelia Cash)Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
CUSTOMS AMENDMENT (AUSTRALIAN TRUSTED TRADER PROGRAMME) BILL 2015
This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in the definition of human rights in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Bill
The Bill will amend the Customs Act 1901 (Customs Act) to:
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- Establish the Australian Trusted Trader Programme (the Programme);
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- Enable entities to nominate themselves to participate in the Programme;
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- Allow the Comptroller-General of Customs to enter into a trusted trader agreement (an agreement) with an entity and provide administrative benefits to that entity if:
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- the entity nominates itself to participate in the Programme; and
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- the Comptroller-General of Customs considers that it is reasonably likely that the entity will satisfy the qualification criteria set out in the rules;
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- Allow the Comptroller-General of Customs to vary an agreement to provide additional administrative benefits and / or legislative benefits under Part IV (other than Division 1) and Part VI (other than Division 1) of the Customs Act if he or she is satisfied, following validation of the qualification criteria, that the entity satisfies the qualification criteria set out in the rules;
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- Provide that agreements may be subject to conditions prescribed by the rules and terms and conditions specified in the agreement;
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- Allow the Comptroller-General of Customs to vary, suspend or terminate an agreement unilaterally if he or she reasonably believes that the entity has not, or is not complying with any condition prescribed by the rules or any term or condition specified in the agreement;
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- Allow a decision of the Comptroller-General of Customs to refuse to enter into a trusted trader agreement, to be a decision subject to review by the Administrative Appeals Tribunal (AAT);
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- Allow a decision of the Comptroller-General of Customs to refuse to vary a trusted trader agreement, to be a decision subject to review by the AAT;
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- Allow a unilateral decision of the Comptroller-General of Customs to vary, suspend or terminate a trusted trader agreement to be a decision subject to review by the AAT;
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- Allow the Comptroller-General of Customs to maintain a public register containing information of a kind prescribed by the rules in relation to each trusted trader agreement entered into under new Part XA of the Customs Act; and
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- Allow the Comptroller-General of Customs to prescribe rules, by legislative instrument, for and in relation to the operation of the Programme.
Human rights implications
This Bill promotes the right to a fair and public hearing and engages the rights of equality and non-discrimination and privacy and reputation.
Right to Equality and Non-discrimination
Article 26 of the International Covenant on Economic, Social and Cultural Rights (ICCPR) provides the right of all persons to be equal before the law and to be entitled without any discrimination to the equal protection of the law. This requires the law to prohibit discrimination and provide guarantees to all persons of equal and effective protection against discrimination on any ground. In General Comment 18 (non-discrimination), the UN Human Rights Committee observed that not every differentiation of treatment will constitute discrimination, if the criteria for such differentiation are reasonable and objective and if the aim is to achieve a purpose which is legitimate under the ICCPR.
Under the Bill, the Comptroller-General of Customs may enter into a trusted trader agreement with an entity if the entity nominates itself to participate in the Programme; and the Comptroller-General of Customs considers that it is reasonably likely that the entity will satisfy the qualification criteria set out in the rules. The requirement for entities to satisfy qualification criteria to participate in the Programme may be considered to limit the right to equality and non-discrimination as not all entities who nominate themselves to participate in the Programme will be eligible to participate.
The Programme is based on the World Customs Organization (WCO) Authorised Economic Operator concept which encourages Governments to tailor their border clearance requirements to match risks specific to particular goods and entities in the international supply chain, consistent with the World Trade Organization's Agreement on Trade Facilitation (WTO ATF). As a result, the qualification criteria to participate in the Programme will be based on the WCO SAFE Framework of Standards to Secure and Facilitate Global Trade (WCO SAFE Framework). This framework sets out a range of principles and standards to guide international customs administrators in facilitating global trade by assessing business operations, supply chain security, trade compliance and general best practice. Consistent with the WTO ATF and the WCO SAFE Framework, the Programme introduces a differentiated trust-based regulatory treatment at the border for those entities that meet or exceed international supply chain security and trade compliance standards.
As a result, the qualification criteria is a reasonable and appropriate limitation to ensure that only those entities with strong supply chain security and trade compliance standards are eligible to participate in and receive trade facilitation benefits under the Programme.
To support the legitimate aim of the Programme and ensure that entities are afforded the right to equal and effective protection against discrimination, the Bill allows a decision of the Comptroller-General of Customs to refuse to enter into a trusted trader agreement to be subject to external merits review by the Administrative Appeals Tribunal (AAT).
Right to Privacy
Article 17 of the ICCPR prohibits unlawful or arbitrary interferences with a person's privacy. It also prohibits unlawful attacks on a person's honour or reputation. It provides that persons have the right to protection of the law against such interference or attacks. An interference with privacy will not be arbitrary if it is authorised by law or consistent with the provisions, aims and objectives of the ICCPR and reasonable in the circumstances. Reasonableness, in this context, incorporates notions of proportionality, appropriateness and necessity. In essence, this will require that limitations:
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- serve a legitimate objective
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- adopt a means that is rationally connected to that objective, and
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- the means adopted are not more restrictive than they need to be to achieve that objective.
A number of amendments in the Bill engage the right to privacy contained in Article 17 of the ICCPR because they require the collection, use and disclosure of commercial and personal information.
Nomination
Under the Bill, the Comptroller-General of Customs may enter into an agreement with an entity if, amongst other things, the entity nominates itself to participate in the Programme. Participation in the Programme is voluntary and will require the entity to disclose information to the Comptroller-General of Customs as part of its nomination.
A nomination made by an entity must be in an approved form (if made by document) or an approved statement (if made electronically). The nomination will require the entity seeking to participate in the Programme to complete a self-assessment questionnaire that may involve the disclosure of commercial in confidence or personal information. If relevant, the information provided by the entity may need to be disclosed to other government border agencies for the purposes of assessing the risk associated with entity being an interim or ongoing trusted trader. This limitation is necessary as the basis of the Programme is for an entity to demonstrate how they meet specified supply chain security and trade compliance standards in their activities in the international supply chain. To satisfy some of the qualification criteria, the entity may need to disclose personal information, for example, personnel records to demonstrate who has access to the goods, or commercial in confidence information, for example, financial records to demonstrate the entity's financial viability. The collection, use and disclosure of this information will be done in accordance with the Privacy Act 1988 and the Australian Privacy Principles.
To the extent that an entity's right to privacy is affected by the amendments, the impact is not arbitrary. The amendments are reasonable, necessary and proportionate to achieving the legitimate aim of the Programme and will ensure proper governance of the Programme within the Department.
Variation
Amendments in the Bill allow for the variation of an agreement if, following a validation based on physical inspection and audit, the Comptroller-General of Customs is satisfied that the entity meets the qualification criteria set out in rules. As part of the validation, staff of the Department will need to enter the premises of the entity to assess the entity against the qualification criteria in the rules and verify the information supplied in their nomination (self-assessment questionnaire). This may be seen as limiting the right to privacy; however the entry to premises will not be able to occur without the written consent of the entity. Any validation activity that requires entry to an entity's premises will be arranged in consultation with the entity. In addition, the collection, use and disclosure of any information obtained during the validation process will be in accordance with the Privacy Act 1988 and the Australian Privacy Principles.
Public Register of Trusted Trader Agreements
Amendments in the Bill also allow the Comptroller-General of Customs to publish and maintain a public register containing certain information on trusted trader agreements which have been entered into. This engages the right to privacy, honour and reputation because the public register may contain information such as:
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- the name of the entity who has entered into a trusted trader agreement;
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- the status of the agreement (including whether it confers an interim or ongoing status, whether it is in force, whether it or has been suspended (including the period of that suspension) and whether it has been terminated); and
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- the kinds of benefits that the entity is receiving, or will receive, under the agreement.
Disclosure of this information is necessary to ensure transparency of the Programme. It will identify the entities who are participating the Programme and provide the status of that agreement, including the kind of benefits the entity is receiving, at any given time. This information is necessary for other entities in the international supply chain to make an informed decision when they are choosing business partners and want to link with other trusted traders to ensure an end to end secure international supply chain.
To the extent that an entity's right to privacy is affected by the amendments, the impact is not arbitrary. The amendments are reasonable, necessary and proportionate to achieving the legitimate aim of the Programme and will ensure proper governance and transparency of the Programme within the Department.
Finally, the amendments do not limit the obligations of the Department under the Privacy Act 1988 and the Australian Privacy Principles. The Department will adhere to the safeguards in the Privacy Act 1988 and Australian Privacy Principles to ensure no unlawful interference with privacy, honour or reputation occurs.
Right to a Fair and Public Hearing
Article 14.1 of the ICCPR provides the right a fair and public hearing in civil proceedings as one of the guarantees in relation to legal proceedings. The right to a fair hearing provides that all persons are equal before courts and tribunals and the right to a fair and public hearing before a competent, independent and impartial court or tribunal established by law.
The Bill promotes this human right because it provides for the external merits review of the certain decisions by the Comptroller-General of Customs under the Programme. These include:
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- a decision of the Comptroller-General of Customs to refuse to enter into a trusted trader agreement under subsection 176A(1);
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- a decision of the Comptroller-General of Customs to refuse to vary a trusted trader agreement under subsection 177(2); and
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- a decision of the Comptroller-General of Customs to vary, suspend or terminate a trusted trader agreement under subsection 178A(1).
This supports the right to a fair hearing as entities may apply to the AAT to seek an independent review of a decision made by the Comptroller-General of Customs.
An internal review mechanism is also intended to be available for entities to seek an initial review of these decisions. This internal review mechanism is intended to be established administratively during the pilot of the Programme, with a view to test and refine this approach before establishing it in the Customs Act.
Conclusion
The Bill is compatible with human rights as it seeks to promote the right to a fair and public hearing. While some of the amendments engage human rights relating to equality and non-discrimination and the right to privacy and reputation, it maintains all existing protections contained in Australian law and does not seek to limit these rights in any way.
Assistant Minister for Immigration and Border Protection, Senator the Hon Michaelia Cash