What should not be included in the general secrecy offence?

5.77       In the following section, the ALRC considers which of the public interests protected by the various FOI Act exemptions should not be protected by the general secrecy offence.

Cabinet documents and internal working documents

5.78       Section 34 of the FOI Act provides that a document is an exempt document if it has been, or will be, submitted to Cabinet for consideration and was brought into existence for the purpose of submission to Cabinet. Other exempt documents in this section include the official records of Cabinet and documents that would involve the disclosure of the deliberations or decisions of Cabinet, other than documents by which a decision of the Cabinet has been officially published.^[48]

5.79       Section 35 provides an exemption for Executive Council documents, although the ALRC notes that the FOI Exposure Draft Bill proposes the repeal of this section.^[49] Section 36 provides an exemption for internal working documents, that is, documents that would

disclose matter in the nature of, or relating to, opinion, advice or recommendation obtained, prepared or recorded, or consultation or deliberation that has taken place, in the course of, or for the purposes of, the deliberative processes involved in the functions of an agency or Minister or of the Government of the Commonwealth.

5.80       In the UK, the Franks Committee noted the argument that ministers, their advisers and public servants must be able to exchange views fully and frankly among themselves without the risk that the details of such exchanges will be made public. The Committee accepted that there were grounds for protecting this kind of information. It did not accept, however, that criminal sanctions should be used to give general protection to the internal processes of government, stating that ‘the discipline of the public service is in our view an adequate means, as well as being the appropriate means, of dealing with such matters’.^[51]

5.81       The Committee noted, however, that the arguments about free and frank discussion were said to apply with special force to Cabinet documents:

The ultimate responsibility for the decisions of the Government lies in the Cabinet. The Cabinet works on the doctrine of collective responsibility. Whatever the individual views of its members, when the Cabinet reaches a decision it is the decision of them all. Each shares in the collective responsibility for that decision. Anything which damages this collective unity and integrity of the Cabinet damages the government of the country. Privacy for the internal deliberations of the Cabinet, it is argued, is an essential condition of the collective unity. Cabinet Ministers must be able to discuss matters with their colleagues in an uninhibited way. It is in the nature of the system that Cabinet Ministers are sometimes overruled by the colleagues, and sometimes change their minds. Equally, a variety of possible policies and courses of action may have to be considered before one is decided upon. It was put to us that such a system is not strengthened by exposure to the public eye. On the contrary, when confidentiality among colleagues in the Cabinet is lost, discussion will be less free and less frank. Its quality will be impaired and so may the quality of decisions reached.

5.82       The Committee recommended that the criminal law should apply to Cabinet documents, but not to official papers on the same subject or draft Cabinet documents, on the basis that criminal sanctions are imposed to protect the collective responsibility of Cabinet, rather than the content of the documents.^[53]

5.83       The 1988 White Paper, however, expressly rejected the argument that criminal sanctions should apply to the unauthorised disclosure of Cabinet documents:

The Government remains of the view, which was also taken in 1979, that it is not necessary or right for criminal sanctions to apply to Cabinet documents as a class or to advice to Ministers as a class. Documents of this kind will be protected by the proposals if their subject matter merits it, but their coverage en bloc would fuel suspicions that information was being protected by the criminal law merely for fear of political embarrassment.

5.84       The UK Official Secrets Act does not impose criminal sanctions for the unauthorised disclosure of Cabinet documents or internal working documents of government. The Gibbs Committee agreed that ‘information in [Cabinet] documents should only be protected by criminal sanctions if they fall within other descriptions of protected documents’.^[55]

5.85       The Freedom of Information Act 2000 (UK) takes a different approach from the Australian FOI Act in relation to disclosure of internal government documents, indicating that such documents do not require absolute protection. The UK Act includes exemptions for documents relating to the formulation of government policy^[56] and ministerial communications,^[57] but provides that, in order for these exemptions to be maintained in any particular case, the public interest in maintaining the exemption must outweigh the public interest in the disclosure of the information.^[58]

5.86       In a 2008 decision, confirmed on appeal, the UK Information Commissioner allowed the release of a number of Cabinet documents—with some redactions—recording meetings of Cabinet which considered legal advice provided by the Attorney-General in relation to military action against Iraq.^[59] The Commissioner stated that the factors in favour of disclosure were:

• the gravity and controversial nature of the subject matter;

• accountability for government decisions;

• transparency of decision making; and

• public participation in government decisions.

5.87       The Commissioner expressed the view that:

• In respect of effects on Cabinet collective responsibility, disclosure of the minutes will not set a dangerous precedent in respect of other Cabinet minutes. This is because the Commissioner accepts that the protection of the convention of Cabinet collective responsibility is, in general terms, a strong factor favouring the withholding of Cabinet minutes.

• In this case the Commissioner considers the public interest in transparency, accountability, public debate and understanding of decisions made to be more important considerations than that in the importance of being able to discuss policy issues without inhibition.

5.88       The ALRC did not include Cabinet documents, Executive Council documents, or internal working documents in the general secrecy offence proposed in DP 74. This was on the basis that the offence should generally target harms, rather than categories of information, and that the internal processes of government, including the Cabinet process, did not warrant the protection of the criminal law. Although it is important to protect such documents, the ALRC’s view was that the protection should be provided by administrative processes and disciplinary penalties, rather than criminal sanctions.

Submissions and consultations

5.89       The AGD acknowledged the ALRC’s preferred position that the general secrecy offence should not expressly protect categories of information, but stated that:

• the unauthorised disclosure of Cabinet documents regardless of the information contained in them, has the potential to prejudice the effective working of government by diminishing the government’s faith that the Cabinet process provides a forum for free and frank debate and consideration of issues.

5.90       The AGD expressed the view that, because Cabinet documents do not fit easily into agency-specific legislation, it would be preferable to include this category of information in the general secrecy offence.

5.91       On the other hand, the ARTK coalition was of the view that:

• In any event, it is clear that decision making processes of government should not be nested in secrecy. The experience in jurisdictions where those processes are open to public scrutiny has been that it results in more professional, apolitical and reasoned decision making. That is to be encouraged

ALRC’s views

5.92       In light of the Australian Government’s commitment to open government, the ALRC’s view is that Cabinet documents, Executive Council documents and internal working documents should be protected by administrative processes—such as classification and information-handling guidelines—and the imposition of administrative penalties, rather than criminal sanctions. Unauthorised disclosure of these categories of Commonwealth information may be ‘prejudicial to the effective working of government’, but it is essentially a disciplinary, rather than a criminal, matter.

5.93       As discussed in Chapter 4, the ALRC’s view is that, in the context of the general secrecy offence, categories of information should not be protected. However, if disclosure of a Cabinet, Executive Council or internal working document caused, was likely to cause, or was intended to cause harm to one of the specified public interests listed in the general offence it would be caught by the offence.

Information communicated in confidence

Information communicated in confidence by a foreign government

5.94       Section 33(1)(b) of the FOI Act provides that a document is exempt if disclosure:

would divulge any information or matter communicated in confidence by or on behalf of a foreign government, an authority of a foreign government or an international organisation, to the Government of the Commonwealth, an authority of the Commonwealth or a person receiving the communication on behalf of the Commonwealth or of an authority of the Commonwealth.

5.95       In the UK, the 1988 White Paper proposed that secrecy offences should apply to information obtained in confidence from other governments and international organisations as a category of information, without the need to prove that the disclosure caused harm.^[64] While the Official Secrets Act was based to a large extent on the approach outlined in the White Paper, the Act takes a different approach on this issue. Section 3(1)(b) of the Act provides that it is an offence to make a damaging disclosure of ‘any confidential information, document or other article which was obtained from a State other than the UK or an international organisation’.

5.96       Section 3(3) goes on to provide that, in the case of information covered by s 3(1)(b), the fact that the information is confidential, or the nature of its contents, may be sufficient to establish that the disclosure would be damaging.

5.97       In Australia, the Gibbs Committee recommended that the prosecution should be required to prove that the disclosure of information obtained in confidence from foreign governments and international organisations caused harm.^[65]

5.98       In DP 74, the ALRC argued that, for the purposes of the general secrecy offence, it was not appropriate to protect categories of information as such. The particular problems with protecting this category of information are highlighted by the FOI Exemption Guidelines, which state that:

• There is no requirement to show that the foreign government continues to maintain confidentiality in respect of the document; the issue is simply whether the document was communicated in confidence at the time (Re Robinson and Department of Foreign Affairs). The document will be exempt even if the matter is no longer confidential at the time when access is sought (Secretary, Department of Foreign Affairs v Whittaker).

• Because information need only be communicated in confidence, even the existence of the information in the public domain will, in some cases, not affect the exempt status of the document (Commonwealth of Australia v Hittich; Re Rees and Australian Federal Police).

Submissions and consultations

5.99       The AGD noted the Gibbs Committee recommendation that information received in confidence from foreign governments should be a protected category of information:

• As well as having a deterrent effect, the inclusion of information provided in confidence by a foreign government in a general secrecy offence will provide assurance to foreign governments that their information will be appropriately protected. We are not convinced that the harm to international relations element of the general secrecy offence would be sufficient to cover all such information, and would not provide sufficient assurance to foreign governments. This could negatively impact on current and future arrangements for the sharing of information and intelligence by foreign governments with Australia.

5.100   The Australian Transaction Reports and Analysis Centre (AUSTRAC) expressed in-principle support for a general secrecy offence that incorporated a harm element with respect to specified public interests, but expressed reservations about the distinction the ALRC drew between international relations and information communicated in confidence by a foreign government or international organisation:

AUSTRAC believes that any disclosure of information provided by a foreign government or international organisation on the express understanding that its confidentiality will be protected has the potential to disrupt the future exchange ofinformation, and therefore should automatically be categorised as protected information.^[68]

5.101   AUSTRAC stated that it received confidential information from international organisations, such as the Financial Action Task Force, the Asia/Pacific Group on Money Laundering and the Egmont Group of financial intelligence units. AUSTRAC noted that, while international organisations have a regulatory role in terms of global standard setting and ensuring compliance in this area, the information received from international organisations is not covered by the secrecy provisions in the Anti-Money Laundering and Counter Terrorism Act 2006 (Cth). The provisions only cover information communicated by governments, or government agencies and authorities.^[69]

ALRC’s views

5.102   The ALRC recognises that there is an important public interest in protecting the flow of information, and in particular, confidential information, from foreign governments and international organisations. The exchange of information between governments and international organisations is an essential element of international relations. If Commonwealth information was disclosed in circumstances that had the potential to, or did in fact, damage that flow, one would have a strong argument that the disclosure had caused, or was reasonably likely to cause, damage to international relations. In this way, the disclosure would be caught by the general secrecy offence.

5.103   The ALRC remains of the view that, for the purposes of the general secrecy offence, it is not appropriate to protect categories of information without expressly stating the harm the prohibition on disclosure is seeking to prevent. Not every document communicated in confidence by a foreign government or international organisation would damage international relations if disclosed. For example, the information communicated in confidence may have become less sensitive with the passage of time or in the course of events.

5.104   Section 3 of the UK Official Secrets Act requires that the disclosure of such information must be damaging to international relations, but goes on to state that the fact that the information is confidential—or the nature or contents of the information—may be sufficient to establish that the disclosure is damaging. This approach does not protect information communicated in confidence as a category. Rather it ensures that criminal charges may be brought only where the information remains confidential, or is otherwise damaging, at the time the information is disclosed.

5.105   The fact that information is confidential at the time of disclosure is not conclusive of damage, but may be sufficient to establish damage. It is not necessary to state this expressly in the general secrecy offence, but the point could be made in the Explanatory Memorandum and Second Reading Speech accompanying the general secrecy offence.

Information communicated in confidence by a state or territory

5.106   Section 33A of the FOI Act provides that a document is an exempt document if disclosure:

• (a)  would, or could reasonably be expected to, cause damage to relations between the Commonwealth and a state; or

• (b)  would divulge information or matter communicated in confidence by or on behalf of the Government of a State or an authority of a State, to the Government of the Commonwealth, to an authority of the Commonwealth or to a person receiving the communication on behalf of the Commonwealth or of an authority of the Commonwealth.

5.107   The public interests protected by this provision are not of the same order as those protected by, for example, s 33 of the FOI Act—national security, defence and international relations. Section 33A(5) of the Act expressly acknowledges that there will be situations in which the disclosure of documents protected by this exemption will be in the public interest. This is not the case, for example, in relation to documents protected by s 33. The Gibbs Committee was of the view that:

• The relations between an Australian State and the Commonwealth Government are on a totally different plane from the relations between Australia and a foreign country … The Review Committee is not persuaded that it is necessary to include a further category of protected information based on section 33A of the Freedom of Information Act 1982.

5.108   On this basis, the ALRC did not include ‘damage to relations between the Commonwealth and the states and territories’ or ‘information communicated in confidence by or on behalf of the states or territories’ in the general secrecy offence proposed in DP 74. The issue was not raised in submissions.

5.109   For the reasons discussed above, the general secrecy offence should not include protected categories of information, such as information communicated in confidence. While the ALRC acknowledges that information damaging to relations between the Commonwealth and the states and territories requires protection, unauthorised disclosure of this kind of information should be addressed through intergovernmental arrangements, the imposition of administrative sanctions, or the pursuit of general law remedies. Where such information is sensitive for other reasons—for example, because it relates to national security, the enforcement of the criminal law, or public safety—unauthorised disclosures may be caught by other elements of the general secrecy offence.

Material obtained in confidence

5.110   Section 45 of the FOI Act provides that a document is exempt if its disclosure would found an action for breach of confidence. In the ALRC’s view, disclosure of information that would found such an action should be dealt with under the general law dealing with breach of confidence, or under administrative provisions. This section describes a category of information, rather than a public interest, and should not be included in the general criminal offence.

Personal and commercial information

5.111   Section 41 of the FOI Act provides that a document is exempt if its disclosure would involve ‘the unreasonable disclosure of personal information about any person (including a deceased person)’.^[72]

5.112   Section 43 of the FOI Act provides that a document is an exempt document if its disclosure would disclose:

1. trade secrets;
2. any other information having a commercial value that would be, or could reasonably be expected to be, destroyed or diminished if the information were disclosed; or
3. information (other than trade secrets or information to which paragraph (b) applies) concerning a person in respect of his or her business or professional affairs or concerning the business, commercial or financial affairs of an organization or undertaking, being information:
4. the disclosure of which would, or could reasonably be expected to, unreasonably affect that person adversely in respect of his or her lawful business or professional affairs or that organization or undertaking in respect of its lawful business, commercial or financial affairs; or
5. the disclosure of which under this Act could reasonably be expected to prejudice the future supply of information to the Commonwealth or an agency for the purpose of the administration of a law of the Commonwealth or of a Territory or the administration of matters administered by an agency.

5.113   In 1972, the Franks Committee recommended that criminal sanctions should be available in relation to unauthorised disclosure of personal and commercial information. The Committee noted that governments require increasing amounts of information from individuals and organisations. The information is provided on the basis that it will be kept confidential, and individuals and organisations have a right to expect that it will be protected. Governments cannot function effectively without the information and any breakdown of trust between government and people would have adverse repercussions on the government of the country. In addition, the Committee noted that ‘there is no tension in this sphere between openness and secrecy. Everything points to the need for full and effective protection’.^[74]

5.114   The Committee stated that individuals and organisations that suffer damage from an unauthorised disclosure of their private information should also be able to pursue civil remedies, but deterrence of public servants and the reassurance provided to citizens is more appropriately provided by the criminal law.^[75]

5.115   The 1988 White Paper, however, took a different approach. The paper noted that sensitive personal and commercial information provided to government should be given adequate protection:

But the Government has concluded that it would not be right to give blanket protection to all information offered in confidence in legislation designed to protect only that information the disclosure of which would seriously harm the public interest.

5.116   The paper expressed the view that, generally, civil remedies and disciplinary procedures were a more appropriate response to disclosures of private personal or commercial information. The paper noted, however, that there are specific circumstances—particularly where information is provided under a statutory requirement—where it is in the public interest to give personal and commercial information the protection of the criminal law. The paper stated that there were a number of existing offences relating to disclosure of specific information provided under statutory requirements, and noted that consideration would be given to the need to create other specific offences.^[77]

5.117   The Gibbs Committee agreed, noting that the basic purpose of the proposed secrecy offence was to impose criminal sanctions for unauthorised disclosure of information that would seriously harm the public interest. The Gibbs Committee was of the view that, where personal and commercial information required protection, it should be protected by specific provisions such as those under social security and taxation legislation.^[78]

Discussion Paper 74 proposals

5.118   In DP 74, the ALRC agreed, in principle, with the position put by the Gibbs Committee that, generally, personal and commercial information should not be protected in the general secrecy offence. The Privacy Act provides individuals with an avenue to pursue government agencies and others where personal information is disclosed in breach of the Information Privacy Principles (IPPs) or NPPs, and administrative, contractual and general law obligations apply in relation to both personal and commercial information.

5.119   However, there was significant concern expressed by government agencies about the ability of the Australian Government to collect personal and commercial information from the Australian community. Agencies suggested that the potential to impose criminal penalties for unauthorised disclosure of personal information supports community confidence in the ability of the Government to protect the information.

5.120   In response to these concerns, the ALRC proposed to include personal privacy and the protection of business, commercial or financial affairs as two of the interests to be protected by the general secrecy offence.^[79] In order to warrant criminal penalties, however, the ALRC proposed that the harm to personal privacy or commercial interests should be of a relatively high order, that is, the disclosure would have to have a ‘substantial adverse effect’ on personal privacy or on a person’s lawful business, or professional affairs or on the business, commercial or financial affairs of an organisation.

Submissions and consultations

5.121   A range of views were expressed in the course of the Inquiry relating to whether or not to include personal and commercial information in the ambit of the general secrecy offence.

In support of including personal and commercial information

5.122   For example, the AGD submitted that:

There is a legitimate expectation that personal information provided by the public to government agencies will be kept confidential. While the harm in disclosing such personal information may be minimal in an individual case, the negative impact it has on the confidence of the public to provide this information is significant. Criminal sanctions provide an important deterrent and send a strong message that the unauthorised use or disclosure of personal information is unacceptable.

5.123   The AGD stated that privacy and secrecy, while related, are distinct areas of the law. Privacy law regulates the behaviour of agencies and organisations, while secrecy laws are intended to regulate the behaviour of individuals. The AGD noted that some overlap exists, but that the processes and remedies available under the Privacy Act, which are aimed at agencies and organisations, do not have the same deterrent effect for individual Commonwealth officers.^[81]

5.124   A number of agencies that handle large amounts of personal information, including the Department of Human Services (DHS) and the Department of Education, Employment and Workplace Relations (DEEWR), also emphasised the potential damage to individuals and the Commonwealth where personal information is disclosed, as well as the deterrent value of criminal penalties.^[82]

5.125   The Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) noted the highly sensitive nature of the personal information it collects under social security, family assistance and child support legislation stating that:

FaHCSIA considers that any unauthorised disclosure, regardless of whether there is any intention of harm against a specified public interest in a particular instance, would inherently harm the public interest. This is because any unauthorised disclosure would have the potential to erode public confidence in the protection of information held in Departmental records … It is possible that lack of public confidence in the protection of customer’s sensitive personal information could lead to attempts to withhold relevant information.

5.126   A number of other stakeholders agreed that disclosure of such information had the potential to prejudice the future supply of information to the Commonwealth. The Department of Climate Change, for example, submitted that:

Commonwealth secrecy provisions should aim to protect information which could have a negative commercial impact on commercial entities (such as providing an unfair advantage to a competitor) or other persons if inappropriately disclosed.

5.127   APRA noted that information collected from regulated entities is often ‘commercially sensitive’ and, therefore:

from the perspective of a strong and robust prudential supervision regime it is important that APRA’s extensive information-gathering powers … be accompanied by a robust secrecy provision.

5.128   Similarly, the Australian Competition and Consumer Commission (ACCC) stated that, in contrast to many Australian Government agencies, the ACCC is mainly concerned with commercially sensitive information, the disclosure of which ‘may have a substantial adverse effect on the information provider’.^[86]

5.129   The Office of the Privacy Commissioner noted that the Privacy Act provides for the investigation and conciliation of complaints made by individuals regarding a breach of the IPPs by an agency.^[87] In making a determination in response to a complaint, the Privacy Commissioner may declare that the agency ‘should perform any reasonable act or course of conduct to redress any loss or damaged suffered by the complainant’^[88] or that the ‘complainant is entitled to a specified amount by way of compensation for any loss or damaged suffered’.^[89] By way of contrast, the Office noted that secrecy provisions regulate the conduct of individuals, rather than agencies, and do not seek to ‘remedy the personal loss or address the specific damage suffered by an individual in the event that their personal information is wrongfully disclosed’.^[90]

5.130   The Office expressed the view that robust protection of personal information held by government was essential to ensure community confidence and continued engagement with government. The Office acknowledged the ALRC’s view that unauthorised disclosure of personal information generally should not attract criminal penalties and suggested that ‘in many instances, administrative penalties could act as a sufficient deterrent against inappropriate handling and disclosure of personal information’, but noted that criminal penalties may also be appropriate in some circumstances. The Office did offer in-principle support for including personal privacy in the general secrecy offence, in light of the concerns expressed by agencies about the need to protect such information.^[91]

Concern about ‘substantial adverse effect’

5.131   The AGD expressed some concern over the ALRC’s proposal to limit the offence to disclosures that have a ‘substantial adverse effect’ on personal privacy, querying how this might be interpreted by the courts and what factors might be taken into account in determining the effect of a disclosure. The AGD suggested a two-tier approach in which the first tier would address unauthorised disclosures of personal information that cause harm to an individual and the second tier would address such disclosures that had a substantial adverse effect on personal privacy.^[92]

5.132   The AFP had similar concerns, expressing the view that the requirement would be hard to define and difficult to prove:

Restricting the secrecy offence protections for private interests in this way will hamper criminal prosecutions and diminish the confidence of the private sector in the Government’s ability to protect and handle personal and commercial information. In our view there are strong reasons against creating a ‘substantial adverse effect’ limitation on the protection of private interests. If such a limitation is created then the term ‘substantial adverse effect’ should be defined in non-exhaustive terms within the proposed offence provisions to provide guidance to the judiciary and prosecuting authorities on the meaning of the term.

5.133   Indigenous Business Australia (IBA) expressed similar concerns about the proposed threshold:

As drafted, the general offence will rarely, if ever, apply to unauthorised disclosures of information held by IBA, creating an environment that contains no effective mechanism for holding individuals liable for serious unauthorised disclosures.

5.134   IBA noted that the Privacy Act does not bind individuals and that, because the Act covers only ‘personal information’, its effect is limited in relation to commercial information. IBA further stated that general law or equitable remedies, such as breach of confidence, were highly technical. IBA did not accept that the general secrecy offence should establish a higher threshold of harm for privacy and commercial interests, noting that this was not consistent with the approach in the FOI Act and may give rise to evidential difficulties for the prosecution.^[95]

5.135   The Commonwealth Director of Public Prosecutions (CDPP) agreed, stating that:

From a prosecution perspective, we are uncertain what will be required to be proved to make out an offence based on a disclosure which has a substantial adverse effect on personal privacy. It may be that this limb of the offence requires some additional assistance to make clear what the offence encompasses, such as a definition of ‘personal privacy’ and/or ‘substantial adverse effect’.

5.136   The DHS expressed concern that the proposed formulation would make it ‘difficult to be confident that a prosecution would succeed in any but the most extreme situations’ and that this would reduce the practical significance of the provisions. In addition, the DHS noted that the proposed formulation in relation to personal and commercial information:

gives no recognition to the important public interests which may be indirectly adversely affected by disclosures. In particular, a disclosure may damage community confidence in Government’s commitment and ability to safeguard such sensitive information and community cooperation in providing such information to Government.

5.137   The DHS suggested that the general secrecy offence be extended to include disclosures that have a substantial adverse effect on the delivery of government services, adding that:

A related concern is the need to deal with situations where there is a course of conduct and/or a group of disclosures. For example, a malicious or disaffected employee of an agency may engage in a pattern of disclosure of protected personal or business/professional information over a period of time or in a concentrated burst of activity. It may be that none of the disclosures taken in isolation would reach the ‘substantial adverse effect’ threshold but that the cumulative effect of the disclosures could be substantial.

5.138   The Australian Privacy Foundation suggested that ‘substantial’ set too high a threshold and should be replaced with ‘significant’ or ‘material’.^[99] The Department of Health and Ageing expressed concern that the test proposed would cause uncertainty, be inappropriate in some circumstances, and provide insufficient protection for certain types of personal health information.^[100]

Concerns about including personal and commercial information

5.139   Ron Fraser stated that, generally, there should not be criminal penalties for unauthorised disclosure of information causing harm to individual or corporate interests, and noted that the Gibbs Committee did not recommend addressing these harms through the criminal law. He suggested that disclosure of confidential personal and commercial information should continue to be regulated by the Privacy Act, and by non-criminal statutory obligations of secrecy such as those set out in reg 2.1 of the Public Service Regulations. He noted that use of the ‘substantial adverse effect’ threshold would help to ensure that criminal penalties were not applied where the disclosure of information had only minor or trivial consequences.^[101]

5.140   The ARTK coalition submitted that:

Currently a large number of secrecy provisions, if breached, are punishable by imprisonment, notwithstanding the relative triviality of the offence and in many cases they merely seek to protect what can be described as information that is no more than commercial in confidence. Criminal sentences are not appropriate in such circumstances. …

In a commercial context, the disclosure of confidential information does not attract such a severe regime and the civil remedies (such as damages or dismissal) are adequate to deter a breach of the duty of confidence. The same should apply in the public sector.

5.141   The ARTK coalition stated that it was unnecessary to criminalise disclosures which have a substantial adverse effect on personal privacy or commercial affairs and that doing so would lead to ‘a significant chilling of free speech in Australia’.^[103] The coalition noted that, in the private sector, the disclosure of confidential information attracted civil remedies such as damages, or administrative penalties such as dismissal. The ARTK coalition was of the view that the same approach should be adopted in the public sector, noting that the individual loss or harm caused by such disclosures is not addressed by the imposition of criminal sanctions.

5.142   Civil Liberties Australia expressed the view that unauthorised disclosure of personal information or disclosures thatharm business, commercial or financial affairs should not generally attract criminal penalties, and that the existing range of remedies under general, contract and administrative law are sufficient. CLA stated that:

It is inconsistent for criminal sanctions, including imprisonment, to apply to a person operating in the public sphere when they would not apply to a person not operating in the public sphere for the same act.

5.143   CLA was not convinced by the argument that criminal penalties were necessary to ensure public confidence in government systems that collect personal information.^[105]

ALRC’s views

5.144   The ALRC has decided not to recommend that the general secrecy offence cover disclosures that have a substantial adverse effect on personal privacy or commercial affairs.

5.145   Where personal or commercial information is disclosed in the private sector, the matter may give rise to contractual, common law or equitable remedies. In the ALRC’s view, where personal or commercial information is disclosed in the public sector, the same sort of avenues of redress should generally be available—including the lodging of a complaint under the Privacy Act, the imposition of administrative penalties, and contractual, common law and equitable remedies.

5.146   Where the disclosure involves fraud—that is, the information is disclosed with the intention of dishonestly obtaining a benefit or dishonestly causing a detriment to another person—s 142.2 of the Criminal Code provides criminal sanctions.

5.147   A number of agencies, such as the ATO, DHS, APRA and the ACCC, collect large amounts of personal and commercial information. Although some of this information can be collected under statutory compulsory powers, in many cases agencies rely on the voluntary provision of information. These agencies expressed the view that it is necessary to protect this information with secrecy offences in order to ensure this essential flow of information to the government.

5.148   The ALRC agrees that, in some cases, it is appropriate to protect this information with criminal secrecy provisions. It is not, however, appropriate to do this in the general secrecy offence. In the ALRC’s view, the public interest being protected—that is, the relationship of trust between government and the people—is not an interest that could easily be articulated in, and protected by, the general secrecy offence. It would be very difficult to prove beyond reasonable doubt, for example, that a single disclosure of personal or commercial information had any impact on this public interest.

5.149   For this reason, the ALRC’s view is that in specific regulatory contexts—for example, taxation, social security or corporate regulation—where it can be demonstrated that a relationship of trust is crucial to the operations of government, it may be appropriate for specific secrecy offences to protect specific categories of information. The circumstances in which such specific secrecy offences will be justified are discussed in detail in Chapters 8 to 11.

Financial or property interests of the Commonwealth

5.150   Section 39 of the FOI Act provides that a document is exempt if its disclosure would have a substantial adverse effect on the financial or property interests of the Commonwealth or of an agency.^[106] As noted above, the ALRC’s view is that, generally, disclosures of Commonwealth information should not attract criminal sanctions where they would not attract such sanctions outside the public sector. This information, which is in the nature of confidential commercial information, should therefore be protected by appropriate administrative processes and penalties and the general law.

Information affecting the economy

5.151   Section 44(1) of the FOI Act provides that a document is exempt if its disclosure would, or could reasonably be expected to:

• have a substantial adverse effect on the ability of the Government of the Commonwealth to manage the economy of Australia; or
• result in an undue disturbance of the ordinary course of business in the community, or an undue benefit or detriment to any person or class of persons, by reason of giving premature knowledge of or concerning proposed or possible action or inaction of the Government or Parliament of the Commonwealth.

5.152   Section 44(2) states that the kinds of documents to which s 44(1) may apply include, but are not limited to, documents containing matter relating to:

1. currency or exchange rates;
2. interest rates;
3. taxes, including duties of customs or of excise;
4. the regulation or supervision of banking, insurance and other financial institutions;
5. proposals for expenditure;
6. foreign investment in Australia; or
7. borrowings by the Commonwealth, a State or an authority of the Commonwealth or of a State.

5.153   The FOI Exemption Guidelines note that:

It is the consequences of disclosure that are significant when determining whether a document is exempt under s 44, not the nature of the document or the information contained in the document (although they are likely to be relevant considerations). The expected effect of disclosure must be on the government’s ability to manage the economy. These words seem to suggest that the effect must be on the process of decision making in relation to the economy, rather than on the economy itself.

5.154   The FOI Exposure Draft Bill proposes to repeal s 44 of the FOI Act and enact new s 47J in its place. The proposed s 47J differs from s 44 in that it would exempt documents that would, or could reasonably be expected to, have a substantial adverse effect on Australia’s economy by influencing a decision or action of a person or entity, or by giving a business an undue benefit or detriment by providing premature knowledge of proposed or possible action or inaction by a person or entity. As ‘conditionally exempt’ documents, an agency or minister must give a person access to these documents unless it would be contrary to the public interest.^[108]

5.155   The Franks Committee expressed the view that the possibility of harm to the economy should not generally attract sanctions under the criminal law:

There are aspects of economic management which the Government properly keeps secret, though in many instances the information in question is eventually made public. But the fact that an unauthorised disclosure would damage the economy rather than some other aspect of the national life, does not distinguish economic management from the rest of the Government’s ordinary domestic functions. Here, as with these other domestic functions, reliance can properly be placed on all the other means of protection available, without involving the ultimate sanctions of the criminal law.

5.156   The Committee noted, for example, that while governments take precautions to protect Budget information—including limiting access to the information—the harm caused by premature unauthorised disclosure of such information is likely to be political embarrassment, rather than harm to the economy of the nation. For this reason, the Committee was of the view that such disclosures should not attract criminal sanctions.^[110] Where such information is disclosed in order to gain a benefit or cause a detriment, the Committee expressed the view that this should be covered by a different offence:

Our proposal is not that governments should no longer protect economic and financial information of this kind. It is that those leaking such information should no longer be liable to prosecution and imprisonment, unless it is done for private gain.

5.157   The Committee did, however, express the view that official information relating to ‘any proposals, negotiations or decisions connected with alterations in the value of sterling, or relating to the reserves, including their extent or any movement in or threat to them’ should be protected by the criminal law. This was on the basis that crises involving the exchange rate or the reserves had the potential to cause ‘exceptionally grave injury to the economy’ and the life of the nation and thus justified the imposition of criminal sanctions.^[112]

5.158   The 1988 White Paper stated, however, that it was not necessary to protect economic information as a class, noting that protection would be provided by disciplinary processes and penalties and, where necessary, by specific legislation on particular subjects.^[113] The UK Official Secrets Act does not include provisions imposing criminal sanctions for this kind of information.

5.159   The Gibbs Committee agreed that the disclosure of information that would cause substantial damage to the national economy should not be covered by a secrecy offence. This was on the basis that public access to information about the economy was crucial, and that the chilling effect of a criminal offence in this context was not justified on the balance of public interests. The Committee was convinced by arguments put in submissions, including one from the Treasury, which stated that the risk of an unauthorised disclosure damaging the national economy was very small, and that the breadth of the formulation would give rise to ‘unforeseen uses of the offence by future governments and their servants’.^[114] The Treasury was of the view that administrative sanctions were an appropriate response to the unauthorised disclosure of this kind of information.

5.160   Section 20A of the New Zealand Summary Offences Act, however, does establish an offence for unauthorised communication of official information likely to seriously damage the economy of New Zealand by prematurely disclosing decisions to continue or change economic or financial policies relating to:

1. exchange rates or the control of overseas exchange transactions;
2. the regulation of banking or credit;
3. taxation;
4. the stability, control, and adjustment of prices of goods and services, rents, and other costs, and rates of wages, salaries, and other incomes;
5. the borrowing of money by the Government of New Zealand; or
6. the entering into of overseas trade agreements.

5.161   However, the maximum penalty for this offence is only three months imprisonment, or a fine of $2,000.

ALRC’s views

5.162   The ALRC is not recommending that ‘substantial adverse effect on the ability of the Government of the Commonwealth to manage the economy of Australia’—the current FOI Act formulation—or ‘substantial adverse effect on Australia’s economy’—the new formulation proposed in the FOI Exposure Draft Bill—be included in the general secrecy provision.

5.163   Information that has the potential to have an adverse effect on Australia’s economy is protected by administrative processes and penalties, as well as the general law. The issue is whether unauthorised disclosure of this kind of information warrants the imposition of criminal sanctions in the general secrecy offence. The Franks Committee was of the view that a small subset of information, relating to the value of the currency and the reserves, did warrant the protection of the criminal law, but the UK Government did not agree, and this information is not included in the UK Official Secrets Act. The Gibbs Committee indicated that, on balance, it was not appropriate to impose criminal sanctions for the unauthorised disclosure of this kind of information. The ALRC agrees. The potential scope of the provision would be too uncertain, and may have an unacceptable chilling effect on the flow of information in an area in which there is a strong public interest in openness and accountability.

5.164   The New Zealand legislation does impose criminal penalties for unauthorised disclosure of particular information, but stipulates a low maximum penalty of three months imprisonment or a $2,000 fine. The ALRC notes that the AGD Guide to Framing Commonwealth Offences states that maximum penalties of less than six months should be avoided, to underline the fact that imprisonment is reserved for serious offences.^[115]

5.165   The ALRC also notes that under s 47J of the FOI Exposure Draft Bill, documents that would, or could reasonably be expected to, have a substantial adverse effect on Australia’s economy are ‘conditionally exempt’ documents. Other documents that are classified as conditionally exempt in the Bill are those relating to Commonwealth-state relations; the deliberative process; the financial or property interests of the Commonwealth; certain operations of agencies; personal privacy; business affairs; and research. Where a document is classified as ‘conditionally exempt’, access must be provided unless providing access would, on balance, be contrary to the public interest. This indicates that, in the Australian Government’s view, the public interest balance in relation to disclosing this information is different from the public interest balance in disclosing documents affecting, for example, national security, defence, international relations, or law enforcement.

5.166   While the ALRC’s view is that this kind of information should not be protected in the general secrecy offence, it may be appropriate to protect more specific information in a specific secrecy offence. Chapters 8 to 11 of this report consider the circumstances in which specific secrecy offences are justified.

Other FOI exemptions

Documents to which secrecy provisions apply

5.167   Section 38 of the FOI Act provides that a document is an exempt document if disclosure of the document, or information contained in the document, is prohibited under a provision of an enactment; and the provision is specified in sch 3 of the FOI Act; or s 38 is expressly applied to the document, or information, by the provision, or by another provision of that or any other enactment. The relationship between s 38 and secrecy provisions is discussed in detail in Chapter 16.

Documents concerning certain operations of agencies

5.168   Section 40 of the FOI Act provides that a document is exempt if its disclosure would, or could reasonably be expected to, impact adversely on the conduct of agency operations. Examples of such adverse impact include:

• prejudice to the effectiveness of procedures or methods for the conduct of tests, examinations or audits by an agency;
• a substantial adverse effect on the management or assessment of personnel by the Commonwealth or by an agency;
• a substantial adverse effect on the proper and efficient conduct of the operations of an agency; or
• a substantial adverse effect on the conduct by or on behalf of the Commonwealth or an agency of industrial relations.

5.169   These are matters relating to the internal management and operations of agencies, and the protection of information relating to these matters should be addressed through administrative procedures and, where necessary, the imposition of administrative penalties. This is also the ALRC’s view in relation to the exemption set out in s 43A of the FOI Act relating to research undertaken by officers of agencies.^[117]

Sections 42, 46, 47 and 47A of the FOI Act

5.170   Sections 42, 46, 47 and 47A of the FOI Act deal with the disclosure of documents: which would be privileged from production in legal proceedings on the ground of legal professional privilege; would amount to a contempt of court, or infringe the privileges of parliament; arise out of certain elements of the companies and securities legislation;^[118] and the electoral roll and related documents, respectively. In the ALRC’s view, these should not be included in the general secrecy offence. The courts and the Australian Parliament have powers and procedures to deal with unauthorised disclosure of documents, including the ability to impose penalties.

5.171   In relation to the documents protected by ss 47 and 47A, in the ALRC’s view, the documents relating to the Ministerial Council for Companies and Securities and the National Companies and Securities Commission should be protected by administrative arrangements between the Commonwealth and the states and territories. Finally, the electoral roll and related documents are regulated by specific secrecy provisions. The circumstances in which specific secrecy offences may be justified are discussed in Chapters 8 to 11.