Australia: Should we be talking about money? Balancing the need for financial secrecy in resource plays and the desire for government transparency

WHO SHOULD READ THIS

  • Government lawyers and advisers and all stakeholders in the Queensland resources sector.

THINGS YOU NEED TO KNOW

  • The changes proposed in the Mineral and Energy Resources (Financial Provisioning) Bill 2018 will change more than just the financial assurance scheme in Queensland.

WHAT YOU NEED TO DO

  • Consider the confidentiality protections you have in place for sensitive information and be aware of the benefits of risks associated with FOI/RTI regimes.

By the end of this calendar year, we can expect to see members of the Queensland Parliament debating the introduction of the Mineral and Energy Resources (Financial Provisioning) Bill 2018 (Qld) (FA Bill). While it is widely known that the FA Bill aims to overhaul the financial assurance (FA) and progressive rehabilitation regime in Queensland, the Bill also seeks to amend the Right to Information Act 2009 (Qld) (RTI Act) to prevent the disclosure of documents provided under this proposed FA scheme.

Exemptions from FOI provisions are not unusual, and appear in the Freedom of Information Act 1992 (Cth) (FOI Act), the RTI Act and like legislation throughout Australia.

The proposed FA scheme

In an attempt to improve the management of future financial risks to the State where a proponent fails to comply with their environmental management and rehabilitation obligations, the State introduced the FA Bill earlier this year.

We provided an overview of the previous FA Bill when it was introduced in 2017. In summary, the FA Bill seeks to implement a financial provisioning scheme (Scheme) that provides the Queensland Government with access to a pooled fund (Fund) to assist in rehabilitating mines that are not in compliance with rehabilitation obligations. Contributions by proponents to this Fund will be informed by the risk category allocated to the relevant project.

The FA Bill proposes that a scheme manager be appointed, with that manager empowered to determine the risk category for each project, and thus the contribution to the Fund. Relevant here, submissions from proponents to the scheme manager may require the disclosure of financial and business information.

To allay concerns that these sensitive documents will become publicly available, the FA Bill includes a proposed amendment to the RTI Act to provide certain exemptions and exclusions in relation to documents disclosed pursuant to the FA Bill.

Amendments to the Qld RTI Act

While there are only a few amendments proposed to the RTI Act, it does limit the operation of the RTI Act in respect of the proposed Scheme quite significantly.

The FA Bill proposes to insert two mechanisms which would effectively prevent access being given to certain documents relating to the FA scheme, by legislating that:

  • documents created, or received, by the scheme manager under Part 3 of the FA Bill are exempt;1 and
  • the scheme manager appointed to manage the Scheme under the proposed FA Bill is not an entity to which the RTI Act applies.2

While an exemption in the nature of that summarised above in relation to documents will not always result in access to information being denied – a Minister or agency can choose to give access notwithstanding that information is 'exempt' – the proposed exclusion of the scheme manager would effectively mean that the public (including competitors and environmental activists), and indeed other government agencies, would not have a right of access to any information in the scheme manager's (or other Queensland Government Department's) possession or control.

The proposed amendments to the RTI Act had been drafted into the FA Bill to respond to concerns of industry stakeholders about the potential for sensitive financial and business information being available for disclosure, in circumstances where that information might not ordinarily be publicly available.

Is there cause for concern?

During the FA Bill's consultation period, very few of the submissions addressed the associated amendments proposed to the RTI Act, with most submissions focussing on the proposed amendments to the FA regime.

Of those submissions received, some stakeholders support the amendments as they seek to address the confidentiality concerns the industry has expressed. It was also suggested by government participants that the requirement (elseshere in the FA Bill) for the scheme manager to publish an annual report that includes information on actuarial investigations of the scheme, and its overall effectiveness, provides sufficient information for the public at large.

Conversely, other stakeholders:

  • highlight the importance of public scrutiny of risk assessments and financial assurance, for transparency and government accountability;
  • consider that information held by the government is a public resource and that the amendments are inconsistent with the intentions of the RTI Act; and
  • consider the proposed amendments to be too broad and will capture more information than is required to adequately protect sensistive financial and business information (i.e. will prevent the disclosure of FA amounts contributed to the Fund).

Notably, some submissions express the view that the RTI Act provides sufficient mechanisms to prevent the disclosure of confidential information and, therefore, the blanket exclusion proposed by the FA Bill is unnecessary. The RTI Act already contains both exemptions and exclusions whereby certain documents, entities, and information are either exempt from disclosure (unless the exemption is overruled by the agency), or wholly excluded from the operation of the RTI Act and therefore cannot be disclosed in response to a RTI request. Most of the exemptions and exclusions under the RTI Act, as it currently stands, are aimed at protecting the privacy of documents for which disclosure would not be in the public's interest – for example, documents relating to state or national security or information that would breach confidentiality (or legal professional privilege) if disclosed.

Although not addressed in any of the submissions, concerns over exclusions from the provisions of the RTI Act should not ignore other means by which access to information can be achieved. For example, persons aggrieved by administrative decisions – including decisions of the scheme manager – would be entitled to seek access to documents by way of discovery in judicial review proceedings under the various judicial and administrative review regimes in Australia. Admittedly, this does not provide the low cost access to information afforded by freedom of information regimes.

Consistency between the Commonwealth, States and Territories

No other government in Australia provides an express and blanket prohibition on the disclosure of information obtained by the relevant government agency in the assessment of the financial commitment required to rehabilitate the mine site. This is not to say that any information provided in respect of determining a proponent's financial and rehabilitation obligation is publicly accessible. Rather, some but not necessarily all such information would likely be captured by other general exemptions.

For example:

  • in the Northern Territory, under the Information Act 2002, sensitive information is exempt, however where legislation imposes levies on a proponent's FA amount3 , the total amount held by the the Territory is published for the public to access;
  • in Tasmania, under the Right to Information Act 2009, information obtained in confidence and information relating to business affairs of a third party (including information potentially provided for the purposes of assessing security deposits for mining activities)4 is exempt; and
  • in South Australia, under the Freedom of Information Act 1991, documents consisting of sensitive business information (e.g. trade secret) or that is otherwise of commercial value is exempt, subject to conditions.

Similar general exemptions operate in the other States in Australia, including Queensland and New South Wales. Accordingly, many consider that Queensland is taking extra precautions that are unnecessary, and may not be aligned with the purposes of the freedom of information regime both within Queensland, in the other States and Territories and in the Commonwealth.

While both government and stakeholders within and outside industry expressed a range of views in relation to the proposed exemption in the Qld RTI Act, it cannot be assumed that proponents will universally press for exemptions to public scrutiny. Indeed, in the context of controversy over the Northern Territory government's allocation and use of funds received by way of its legacy mine levy last year, the NT Minerals Council publicly stated its preference for information to be publicly available.5

Compliance with policy objectives

The freedom of information regimes around Australia are designed to promote transparency and government accountability by providing the public with a means to access information held by the government. Although the regimes differ from jurisdiction to jurisdiction, it is a universal tenet of the regime that it should be providing the public with better access to information held by government agencies, and this in turn will promote better decision-making by government agencies and engender greater public confidence in government institutions.

The proposed amendments to Qld's RTI Act, though subject specific, arguably run contrary to the prevailing trends. There are currently on foot proposed amendments to the FOI Act to improve access and transparency. The Freedom of Information Legislation Amendment (Improving Access and Transparency) Bill 2018 (Cth) has been introduced and is aimed at:

  • implementing measures to make the government more transparent and accountable;
  • assisting the public, and the media, to access information under the law;
  • addressing delays, lengthy review processes, and large legal expenses incurred in opposing the release of information.

These objectives are to be achieved through various amendments to processes that have been identified as delaying and obstructing the process for obtaining a response to an FOI request, or a review of an FOI decision. Changes include, for example:

  • a provision allowing FOI review applicants to elect for their review to bypass the Information Commissionerand proceed straight to the Administrative Appeals Tribunal if there has been a delay in the decision making process;
  • preventing agencies from making submissions to FOI decision reviews that have not been advanced by the agency, such that switching exemptions (effectively, remaking a decision) part way through a review will no longer occur.

While not specifically relevant to the type of information to which the amendments to the Qld RTI Act relate, it is indicative of a definitive policy objective whereby access to information should not be restricted unless it is not within public interest for that information to be disclosed.

Since the FA Bill was introduced in February, the Queensland Government has been seeking to pass the Bill before the end of this calendar year. Although the second reading of the FA Bill has been frequently delayed, we expect to see the Bill considered before the end of the year. It remains to be seen whether there will be any significant objections to the proposed amendments to the RTI Act and, if there is, how Parliament will seek to balance the needs of the public against the commercial needs of proponents under the proposed Scheme.

References

1Amendment to Schedule 1 of the RTI Act.

2 Amendment to Schedule 2 of the RTI Act.

3 Mining Management Act (NT)

4Mineral Resources Development Act 1995 (Tas)

5 S Everingham, 'Concerns taxes collected by NT Government to clean up ex-mines not used for intended purpose', ABC News, http://www.abc.net.au/news/2017-02-21/nt-government-may-have-breached-on-laws-on-mine-clean-up-funds/8290040 (accessed 10 October 2018)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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