Senate

Supplementary Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Josh Frydenberg MP)

Chapter 2 Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Amendments to the National Consumer Credit Protection Amendment (Mandatory Credit Reporting and Other Measures) Bill 2019

2.1 The amendments to the Bill are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview

2.2 The amendments to the Bill delay the commencement and operation of the Bill, including the mandatory credit reporting regime and financial hardship information reporting framework.

2.3 The amendments also enhance the financial hardship information reporting framework in Schedule 2 to the Bill by:

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limiting access to financial hardship information by credit providers to situations where the consumer is seeking to access new credit;

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allowing consumers to access their credit information held by a credit reporting body for free every three months; and

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requiring credit reporting bodies to provide consumers with their rating on a credit score scale and related information, if requested by the consumer.

Human rights implications

2.4 The amendments to the Bill engage the following human rights and freedoms:

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the right to protection from arbitrary or unlawful interference with privacy under Article 17 of the International Covenant on Civil and Political Rights; and

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the right to a fair trial and fair hearing rights under Articles 14 and 15 of the International Covenant on Civil and Political Rights.

Right to protection from arbitrary or unlawful interference with privacy

2.5 Amendment 25, new subsection 20E(4A) of the Privacy Act 1988 tightens restrictions about the disclosure of financial hardship information, which is personal information under that Act.

2.6 Amendment 30 provides further safeguards for the privacy of consumers, while ensuring credit providers have sufficient information available to assist them to decide whether to provide the consumer with credit.

2.7 The amendment to subsection 20R(5) in Amendment 30 allows consumers to access their credit information free of charge every three months rather than every 12 months also promotes the right to privacy. This new provision makes it easier for people to find out what personal information about them is held by credit reporting bodies and have it corrected if it is incorrect, out of date or incomplete.

2.8 Additionally, new subsections 20R(1) and (1A) in Amendment 30 require credit reporting bodies to identify the credit information used by the body to calculate the consumer's rating on a credit score scale and the relative weighting of that information promotes the right to privacy as it gives consumers a better understanding of how their personal information is being used.

2.9 Therefore, the amendments to the Bill are compatible with human rights because it promotes the right to protection from arbitrary or unlawful interference with privacy.

Right to a fair trial and fair hearing rights

2.10 Civil penalty provisions may engage criminal process rights under Articles 14 and 15 of the International Covenant on Civil and Political Rights regardless of the distinction between criminal and civil penalties in domestic law. This is because the word 'criminal' has an autonomous meaning in international human rights law. When a provision imposes a civil penalty, an assessment is therefore required as to whether it amounts to a 'criminal' penalty for the purposes of Articles 14 and 15 of the International Covenant on Civil and Political Rights.

2.11 The new civil penalty provision in subsection 20E(4A) in Amendment 25 is intended to deter credit reporting bodies from non-compliance with the new restrictions on disclosure of financial hardship information. However, it does not carry a penalty of imprisonment and there is no sanction of imprisonment for non-payment of any penalty.

2.12 Therefore, the civil penalty provision introduced by the amendments to the Bill should not be considered 'criminal' for the purposes of Articles 14 and 15 of the International Covenant on Civil and Political Rights.