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Universities weigh-in on the Defence Trade Controls Bill

The Senate Standing Committee on Foreign Affairs, Defence and Trade Legislation (the Committee) has issued its long-awaited final report on the proposed Defence Trade Controls Bill 2011 (the Bill), which includes several recommendations for amendments to the draft Bill and a recommendation that the Bill, incorporating these amendments, be debated in the Senate and passed. Most of the recommended amendments to the Bill were suggested by the university and research sectors.

In addition to giving effect to the U.S.-Australia Defence Trade Controls Treaty, the draft Bill also seeks to introduce controls on intangibles such as defence technology, including services. It creates a registration and permit regime for brokering goods controlled under Australia’s Defence Strategic Goods List and introduces new criminal offences to enforce provisions of the Bill. The proposed new controls create additional compliance requirements for Australian industry.

The Committee’s preliminary report, issued in August 2012, found that Australian industry had not been sufficiently consulted on the impact of the proposed legislation before the Bill’s introduction into Parliament. The preliminary report explains that during the initial consultation process on the draft Bill, which introduces strengthened export controls in Australia, members of Australian industry raised concerns about the changes to the way certain goods, technology and services were proposed to be controlled by the Bill. The preliminary report found that these concerns were not addressed and that further consultation with Australian industry was required to understand the full impact of the Bill before it could proceed.

Subsequent to the publication of the preliminary report, further consultation was conducted with the academic and research sectors, which expressed concerns over the impact of the Bill on Australian research and innovation, particularly in the pharmaceutical, biotechnology and nanotechnology industries.

The highest level of concern over the Bill’s implications was raised by academia over the limitations and regulatory burden the Bill’s new export controls would impose on academic research and innovation. To better understand the impact on the research sector, two roundtables were conducted in September in which key stakeholders, including Defence, various Commonwealth agencies, and representatives of the university sector discussed provisions of the Bill. At the conclusion of the second roundtable, suggested recommendations for amendments for the bill were agreed by all stakeholders. The roundtable recommended that a pilot study should be conducted before the legislation is enacted to identify potential issues and determine the costs and benefits to industry. Subsequent to the pilot study, a Strengthened Export Controls Steering Group would be established to present advice to Ministers, including advice on additional suggested amendments and whether the transition period will need to be extended. It was recommended that a 24 month transition period, with no offence provisions, would precede enactment of the legislation. Roundtable members are also of the opinion that controls on foreign employees and students in Australia should be removed from the Bill.

Both Sydney University and Universities Australia made subsequent submissions to the Committee stating their concern that the proposed Bill would impose greater restrictions on Australian Universities than their U.S. counterparts. In their submission, the University of Sydney recommended that the Bill be amended to “ensure that the resulting control regime is no broader in scope or more stringent than the arrangements put into place for fundamental research in accredited institutions of higher learning in the US.” According to the Committee’s final report, they believe it is the government’s intention to incorporate outcomes from the roundtable discussions as amendments to the Bill.

The Committee had several recommendations for amendments to the Bill including:

  • a 24 month transition period with no offence provisions in effect;
  • a pilot study governed by a (to be established) Export Controls Steering Group;
  • the deletion of Defence Services from the Bill;
  • the removal or controls on Australians overseas; and
  • the removal of controls on foreign employees and students in Australia.

The final report also outlined an amendment to the Bill that defines the role of the proposed Export Controls Steering Group and how it would work with stakeholders to conduct the pilot program and advise Parliament on further recommended amendments to the Bill during the transition period.

The final recommendations of the Committee included that the Bill, amended as outlined in their report, should proceed to the Senate for debate and subsequently passed. A dissenting report was prepared by Green and Liberal party Senators advising that in their view the Bill is still a work in progress and that further industry consultation should be conducted with industry on the proposed amendments to the Bill. They recommend that until the Committee can establish that industry concerns have been addressed, the Bill should not be debated.

Notwithstanding the dissenting report, the bill and proposed amendments will now be introduced into the Senate for debate. This will occur as early as the week of 29 October.

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