House of Representatives

Explanatory Memorandum

Circulated by authority of the Minister for Home Affairs, the Honourable Jason Clare MP

Statement of Compatibility with Human Rights

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

This Bill is 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 of the Bill

6. The purpose of this Bill is to amend the Customs Act 1901 and the Customs Tariff (Anti-Dumping) Act 1975 to implement three reforms to the anti-dumping system.

7. The three reforms are:

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The removal, in certain cases, of the Minister's mandatory consideration of the lesser duty rule. This will allow the Minister, in particular circumstances, to consider applying a full margin of duty to remedy the injurious effects of dumping or subsidisation. The legislation sets out the three circumstances where the Minister is not required to (but may) consider the desirability of fixing a lesser amount of duty.

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To more fully align the retrospective duties provisions of the legislation with the relevant World Trade Organization agreements and to make it clear that the Minister is the decision maker for certain findings. The amendments also restructure the legislation so that it is clearer, and introduce consultation provisions to facilitate transparency and due process.

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To introduce a new type of circumvention activity to address sales at a loss and other practices that undermine the effect of anti-dumping and countervailing duties already imposed. This new type of anti-circumvention inquiry will be conducted within a shorter timeframe than other anti-circumvention inquiries. This reform also introduces a termination provision that applies to all types of anti-circumvention inquiries.

Human rights implication

The amendments in these Bills potentially engage a number of human rights, including presumption of innocence, fair trial and fair hearing, privacy and reputation, equality and non-discrimination, right to an effective remedy, and freedom of assembly and association.

The amendments in these Bills to remove, in specific circumstances, the requirement for the Minister to have regard to fixing a lesser amount of duty, could be considered to limit the right to equality and non-discrimination. However, this legislation will be administered in a manner that is consistent with the obligations established by Article 9.2 of the World Trade Organization Anti-dumping Agreement which provides that

"...such anti-dumping duty shall be collected in the appropriate amounts in each case, on a non-discriminatory basis on imports of such product from all sources found to be dumped and causing injury...".

The three circumstances which "trigger" the removal of the mandatory consideration of the lesser duty rule are circumstances which can introduce complexity into a dumping or subsidy investigation. In such complex cases, delays can occur in the course of the investigation which impacts on the ability of the injured industry to recover as injury can continue to be sustained until the imposition of measures. The purpose of the amendments is to give the Minister discretion to consider the desirability of fixing a lesser duty in certain circumstances which could be characterised as complex. By imposing the maximum permitted duties it is intended that a better environment for the recovery of the injured industry will be provided.

The amendments in these Bills to clarify the operation and applicability of retrospective duties are relevant to a number of human rights including presumption of innocence, fair trial and fair hearing, and right to an effective remedy. The overarching objective of the reform is to make retrospective duties more accessible in the circumstances in which they are appropriate. This recognises the detrimental effect certain conduct can have in undermining the remedial effect of measures that may subsequently be imposed.

While the effect of the retrospective provisions may be seen to impact on the rights of importers in allowing duties to be imposed at an earlier point in time, the strong thrust of this reform recognises the Australian industry's right to an effective remedy in the form of measures applied from a time that can remove the injurious effects of dumped or subsidised goods. The right of presumption of innocence in applying retrospective measures is embodied in the fact that the Minister has to be satisfied of the requisite elements and circumstances in order to apply duties retrospectively. Further, the right to fair trial and fair hearing is recognised in that the legislation requires that importers be consulted in circumstances where the Minister is considering applying duties retrospectively. Finally, the findings of fact on which the Minister bases a decision to apply duties retrospectively in the publication of a dumping or countervailing duty notice may be the subject of an application for review to the Review Panel under Division 9 of Part XVB.

The amendments to introduce a new type of circumvention activity, to address sales at a loss and other practices that undermine the effect of duties already imposed, promotes human rights relating to privacy and reputation, and fair trial and fair hearing.

The right for a fair hearing is addressed through a range of transparency measures in which all interested parties are advised by public notice of the application and timeframes for making submissions. The transparency of processes is enhanced by the Commissioner's establishment and maintenance of a public record which all interested parties are entitled to access.

Privacy and reputation issues are also accommodated by not requiring publication of information that a person claims is confidential or whose publication would adversely affect a person's business or commercial interests. Further, the amendments introduce the power to terminate an anti-circumvention inquiry. This power promotes human rights relating to privacy and reputation as, where the Commissioner becomes satisfied that no circumvention activity in relation to the original notice has occurred, the Commissioner may terminate the anti-circumvention inquiry concerned thereby limiting any adverse impact on the reputation of persons who are alleged to be circumventing the payment or effect of anti-dumping duties.

The amendment to introduce a new type of circumvention activity is relevant to the presumption of innocence. The presumption of innocence is observed in that the Commissioner must reject an application for an anti-circumvention inquiry if there are no reasonable grounds for asserting that one or more circumvention activities in relation to the original notice have occurred. Once the inquiry is initiated, and it is established that the prices for the goods concerned have not risen commensurate with the level of the duties payable, the exporters and importers involved have an opportunity to explain why the price has not increased commensurate with the level of the duties imposed. At the completion of the new anti-circumvention inquiry, when the Minister has published his decision, parties are advised of the right of review of the decision to the independent Review Panel established under Division 9 of Part XVB of the Customs Act, further promoting the right to a fair trial and fair hearing.

The associated amendments relating to the treatment of arms-length transactions (paragraph 269TAA(1)(b) of the Customs Act) could be said to engage human rights relating to freedom of assembly and association. This is because the amendment could be considered to treat related parties differently from non-related parties. The amendment is a fair and appropriate limitation however, because of the increased opportunity for related parties to behave in a manner that conceals the transactions between them. The amendment is necessary to ensure that the original intent of the provision can be met, in line with Australia's international obligations under the World Trade Organization Anti-Dumping Agreement. It is a reasonable means to achieving the objective of the Bill to improve the rigour with which transactions between related parties can be investigated in accordance with existing powers within the legislation.

Further, the amendments do not provide for review of the decision to reject an application for an anti-circumvention inquiry and this could be considered to limit the right to an effective remedy. This is justified because applicants are not prohibited in making further applications for an anti-circumvention inquiry that rectify the problems with the applications that were rejected - generally for a lack of evidence in support of the application. Additionally the evidentiary threshold for an anti-circumvention inquiry is not overly burdensome.

Conclusion

The Bill is compatible with human rights because it observes or advances the protection of human rights relating to presumption of innocence, privacy and reputation, and fair trial and hearing. While certain amendments contained in the Bill may engage human rights relating to freedom of assembly and association, right to an effective remedy, right to equality and non-discrimination, and the presumption of innocence, those limitations are reasonable, necessary and proportionate.

THE MINISTER FOR HOME AFFAIRS, THE HONOURABLE JASON CLARE MP