Coalition's planned foreign veto powers could be unconstitutional, inquiry told
The Morrison government needs to overhaul its planned new foreign veto powers because the legislation contains “very serious” drafting problems and raises “fairly deep constitutional concerns”, a parliamentary inquiry has been told.
The constitutional law expert, Prof George Williams, raised doubts about the federal government’s ability to scrap Victoria’s agreement with Beijing on the belt and road initiative, which is in Canberra’s sights.
Williams on Tuesday suggested it might ultimately fall to the high court to decide whether such an intervention trespassed on state powers.
“The irony of this debate is that given so much attention has been focused on the Victorian government’s belt and road [memorandum of understanding] it may be that is exactly the type of agreement that the bill cannot apply to because it’s a core function of a state executive to make such agreements,” the University of New South Wales professor said.
A Senate inquiry is examining the government’s bill to allow the foreign affairs minister to review and potentially cancel certain types of international agreements reached by state and territory governments, councils and public universities.
The government argues it is simply trying to ensure international agreements are consistent with Australia’s foreign policy – but the university sector, in particular, has complained that the law is so broadly worded that it may have to hand over thousands of pages of documentation each year.
Universities have also raised fears that the move could have a chilling effect on international research collaboration.
Williams told the inquiry on Tuesday the proposed law was “not fit to be enacted” in the current form and needed “quite a fundamental rethink if it is to operate in an effective way”.
He said the bill removed procedural fairness and failed to properly define key terms including “foreign policy”, which was so broad that it covered “policy that has never been released, never approved, and hence may include policy that exists only in the mind of a foreign minister and runs counter to the declared policy of the commonwealth”.
He said the bill also did not specify how the government would decide if foreign universities had institutional autonomy – a status that would be key to whether a deal with an overseas higher education entity would be subject to ministerial intervention.
“They’re very serious and [it is] somewhat surprising, to be frank, that we would see some of these matters in a bill that has got to this late stage – and indeed some of them are serious enough to call out questions about compliance with the rule of law,” he said.
Elaborating on the constitutional concerns, Williams said the commonwealth did not have exclusive responsibility for external affairs. It was shared with the states, which had long undertaken a range of related activities such as trade missions.
He said the proposal may get into “dangerous territory” because the high court had held states had immunity from certain federal laws if they impaired the capacity of those states to function.
Williams said a potential move to scrap Victoria’s belt and road agreement “goes to the heart of the exercise of executive power by the state of Victoria, and it’s a matter that only the high court can ultimately resolve as to whether it trespasses through this bill into state functions”.
Williams said the bill appeared to pre-empt this issue by requiring the foreign minister to take into account whether vetoing an agreement would impair the continued existence of the state as an independent entity, or significantly curtail its capacity to function as a government.
He said that may prevent the minister from making any declaration about the Victorian Belt and Road agreement. Alternatively, if the minister did not fully take into account those considerations, there was a risk the action could be subject to a constitutional challenge.
Officials from the Department of Foreign Affairs and Trade defended the proposed bill as proportional, saying the vast majority of arrangements would be unaffected.
Dfat’s chief legal officer, Simon Newnham, said there had been a rapid expansion in the engagement of states, territories, local governments and public universities with foreign governments and overseas partners in recent years.
He said the government recognised that the majority of those arrangements provided substantial benefits, including investment, research, education partnerships and cultural exchange.
But the global context was “increasingly complex and contested” and the foreign minister “does not have full visibility” of the extent of foreign engagement.
Newnham said the legislation did not allow for merits review of decisions the minister made under the new powers because foreign policy had “high political consequence”.
He assured the committee that decisions by a minister to prevent or cancel arrangements “will not be taken lightly”.
The government is still working on the draft accompanying rules – which will include the definition of institutional autonomy of universities – and has promised to release them in time for the main legislation to be debated in parliament.
This prompted several senators to complain about the delay. Newnham said he understood the frustration.
Dfat has held 40 consultations with stakeholders, but only after the bill was introduced to parliament.
Vicki Thomson, the chief of the Group of Eight, said she wondered whether the inclusion of universities in the bill was “an afterthought” because the first the sector knew about the legislation was “through media reporting on the front page of our national newspaper”.
Catriona Jackson, the chief executive of Universities Australia, was pressed during the hearing to say whether she considered Chinese universities to be autonomous from the Chinese Communist party.
She said the sector would “welcome a clearer definition” from the government.
Jackson said the sector was “very aware of a rapidly changing geopolitical environment in which we need to be even more vigilant than we have been previously to foreign interference” but that was why the universities and government set up an interference taskforce.