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2016-2017
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
BROADCASTING LEGISLATION AMENDMENT (FOREIGN MEDIA
OWNERSHIP AND COMMUNITY RADIO) BILL 2017
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Communications
Senator the Honourable Mitch Fifield)
BROADCASTING LEGISLATION AMENDMENT (FOREIGN MEDIA
OWNERSHIP AND COMMUNITY RADIO) BILL 2017
OUTLINE
The Broadcasting Legislation Amendment (Foreign Media Ownership and Community Radio)
Bill 2017 (Bill) forms part of the Government's Broadcasting and Content Reform Package. The
measures implemented by this Bill are designed to improve transparency in the levels and sources
of foreign investment in Australian media companies, and strengthen localism in community radio
broadcasting. The two measures will be implemented by amending the Broadcasting Services
Act 1992 (BSA), with a minor amendment to the Australian Communications and Media
Authority Act 2005 (ACMA Act).
The first measure is the establishment of a Register of Foreign Ownership of Media Assets
(Register), to be overseen and administered by the Australian Communications and Media
Authority (ACMA). Foreign persons would be required to register information about their
company interests in Australian media companies, where the company interests exceed a
specified threshold (two and a half per cent). The Register allows increased scrutiny of
foreign investment in Australian media companies and increased transparency on the levels
and sources of foreign investment in such companies.
The second measure relates to applications for, and renewals of, community radio
broadcasting licences. Community radio services play an important role in informing local
communities and providing community members with the opportunity to have their views
heard. The Bill would adjust the criteria against which licence applications and renewals are
assessed to match community expectations of their local community radio services. The
amendment would encourage community radio broadcasters to provide greater coverage of
local issues, and to provide greater opportunities for local participation in producing and
hosting radio programs.
The amendment would require the ACMA, in assessing licence applications, to consider the
extent to which proposed services will provide 'material of local significance'. Material of
local significance would be defined as material that is produced in, hosted in, or relates to, the
licence area of the proposed licence. This new criterion would have the same priority as the
existing criteria in subsection 84(2) of the BSA, and would apply to licence renewals in the
same way.
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FINANCIAL IMPACT STATEMENT
The measures in this Bill are expected to have no financial impact.
3
REGULATION IMPACT STATEMENT
Background
The Government encourages foreign investment in Australia as it plays an important and
beneficial role in the Australian economy. Foreign investment represents a critical source of
funding for industry, and allows Australian companies to invest in their businesses and
compete effectively in global markets. There is, however, a need to ensure that foreign
investment is consistent with Australia's national interests, and that the community
understands and retains confidence in the benefits of foreign investment.
Foreign ownership is a common feature of the Australian media industry, and most large
media organisations have some degree of foreign investment. Despite it being a common
feature of the Australian media landscape, there are limited avenues through which foreign
ownership is disclosed. It is important that the Australian public has a level of transparency
regarding the levels and sources of foreign ownership in Australian media companies, given
the importance of the media in informing and shaping community views. There is a strong
policy case to ensure the levels and source of foreign investment in the Australian media
industry are broadly known and understood.
Current reporting framework
Foreign ownership and investment in the Australian media industry is not explicitly or
separately reported through any public regulatory process. Other than through the Foreign
Acquisitions and Takeovers Act 1975 (FATA, discussed below), there are no limits or
restrictions on foreign ownership in the media, as previous restrictions were removed from the
Broadcasting Services Act 1992 (BSA) and the then Foreign Investment Policy in 2006.
The FATA and FATA Regulations
Under the FATA, certain actions to acquire interests in securities, assets or Australian land,
and actions taken in relation to entities (being corporations and unit trusts) and businesses that
have a connection to Australia, are defined as 'significant actions'. Some significant actions,
called 'notifiable actions', must also be notified to the Treasurer before the proposed actions
can be taken.
In respect of the acquisition of media interests, section 55 of the Foreign Acquisitions and
Takeovers Regulation 2015 (FATA Regulations) provides that an action is a 'significant
action' and a 'notifiable action' if the action is a foreign person acquiring an interest of at
least five per cent in an entity or business that wholly or partly carries on an Australian media
business. In effect, this means that investments by foreign persons in excess of five per cent in
an Australian media business must be notified to, and approved by, the Treasurer.
A 'foreign person' is defined in section 4 of the FATA, and means:
(a) an individual not ordinarily resident in Australia; or
(b) a corporation in which an individual not ordinarily resident in Australia, a foreign
corporation or a foreign government holds a substantial interest; or
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(c) a corporation in which two or more persons, each of whom is an individual not
ordinarily resident in Australia, a foreign corporation or a foreign government, hold an
aggregate substantial interest; or
(d) the trustee of a trust in which an individual not ordinarily resident in Australia, a foreign
corporation or a foreign government holds a substantial interest; or
(e) the trustee of a trust in which two or more persons, each of whom is an individual not
ordinarily resident in Australia, a foreign corporation or a foreign government, hold an
aggregate substantial interest; or
(f) a foreign government; or
(g) any other person, or any other person that meets the conditions, prescribed by the
regulations.
'Interest' and 'aggregated interest' are defined in section 17 of the FATA. Subsection 17(1)
defines as interest as the situation where:
(1) A person holds an interest of a specified percentage in an entity if the person, alone or
together with one or more associates of the person:
(a) is in a position to control at least that percentage of the voting power or potential
voting power in the entity; or
(b) holds interests in at least that percentage of the issued securities in the entity; or
(c) would hold interests in at least that percentage of the issued securities in the entity
if securities in the entity were issued or transferred as the result of the exercise of
rights of a kind mentioned in (b) or (c) above.
Aggregate interest is similarly defined in subsection 17(2) to capture collective holdings with
reference to two or more persons who are not associates of each other.
Under section 4 of the FATA, a person holds a substantial interest in an entity or trust if:
(a) for an entity--the person holds an interest of at least 20 per cent in the entity; or
(b) for a trust (including a unit trust)--the person, together with any one or more associates,
holds a beneficial interest in at least 20 per cent of the income or property of the trust.
The BSA
The BSA contains notification provisions in relation to the control and ownership framework
of regulated media assets (a regulated media asset is a commercial television broadcasting
licence, a commercial radio broadcasting licence or an associated newspaper). These are
currently contained in sections 63 and 64. The Government is proposing to repeal section 64
(which imposes a notification obligation on an incoming controller of a 'regulated media
asset') by the Communications Legislation Amendment (Deregulation and Other Measures)
Bill 2017, which is currently before the Senate. The repeal is proposed as section 64 is
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considered unnecessarily duplicative. The Australian Communications and Media Authority
(ACMA) would continue to be notified of the change in control by the relevant licensee or
publisher of the asset in accordance with the requirements of section 63.
Section 63 of the BSA relevantly provides that:
(1) If a commercial television broadcasting licensee, commercial radio broadcasting
licensee or datacasting transmitter licensee becomes aware that:
(a) a person who was not in a position to exercise control of the licence has become
in a position to exercise control of the licence; or
(b) a person who was in a position to control the licence has ceased to be in that
position;
the licensee must, within 10 business days after becoming so aware, notify the ACMA
in writing of that event.
...
(3) If the publisher of a newspaper that is associated with the licence area of a commercial
television broadcasting licence or a commercial radio broadcasting licence becomes
aware that:
(a) a person who was not in a position to exercise control of the newspaper has
become in a position to exercise control of the newspaper; or
(b) a person who was in a position to control the newspaper has ceased to be in that
position;
the publisher of the newspaper must, within 10 business days after becoming so aware,
notify the ACMA in writing of that event.
The ASX
The Corporations Act 2001 (Corporations Act) sets out the disclosure requirements for
interests held in listed entities. Relevantly, a person who, either alone or together with their
associates, has relevant interests in voting shares representing five per cent or more of the
votes in a listed company, body or listed registered managed investment scheme, must
disclose to the Australian Securities Exchange (ASX) the details of their relevant interest.
There are also ongoing disclosure requirements which are triggered where a person's
substantial holding changes by one per cent, they cease to have a substantial holding, or they
make a takeover bid.
The problem
While foreign investment in the Australian media is relatively commonplace, there is a lack of
transparency in relation to the levels and sources of such investment. Transparency is
underpinned by two main concepts: the availability of relevant information; and the ability of
the public to readily access and understand such information.
As noted above, no existing regulatory or other framework explicitly collates and discloses
the levels and sources of foreign investment in the Australian media.
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Under the FATA, while investments of more than five per cent by foreign persons in the
Australian media industry are assessed with regard to Australia's national interest, the
details of the proposed or actual investments, or the foreign persons involved, are
generally not publicly disclosed.
Under the ASX, disclosures of relevant interests in listed entities above five per cent are
made public, but they don't indicate whether the shareholder is a foreign person.
Under the BSA, the reporting regime requires disclosure when a person comes into a
position to control, or ceases to be in a position to control, a regulated media asset.
However, these disclosures don't specifically identify foreign persons, and generally
wouldn't require disclosure of interests of less than 15 per cent.
While these regulatory frameworks serve particular purposes, they do not provide the public
with information as to the levels and sources of foreign investment in Australian media
companies, nor is the information that is available in a form that members of the public can
easily compile and understand. Information regarding the top 20 and substantial shareholders
in Australian media companies that are publicly listed is available through the ASX and
company annual reports, as well as commercial investment services (usually through the
payment of subscription fees).
However, this information sheds little light on whether those persons or entities are foreign
investors, as such information essentially only discloses the legal entity holding such interest
and the extent of that interest. The identity of investors is further distorted by the fact that
international capital is typically invested through complex corporate and other structures, with
little clarity on the ultimate sources of the funds. This is the case even in circumstances where
the vehicle making the investment in a media company is located and incorporated in
Australia. In addition, there is no public information available on the levels of sources of
foreign investment in privately held media companies.
Finally, there is no public source of information for foreign investment in media assets below
the five per cent reporting threshold under the ASX or the FATA. This represents a significant
information gap. As discussed in the evaluation section, interests of less than five per cent can
still be material is assessing the extent to which foreign persons may have the capacity to
influence or affect the operations of Australian media companies.
In considering the extent of the problem, it is important to factor into this consideration
whether such information is in a form that can be readily accessed and understood by ordinary
members of the public. This is fundamental to ensuring that there are sufficient levels of
transparency. While there are no specific market barriers preventing the public from accessing
relevant information, the effort and costs in accessing and compiling the information from
existing reporting frameworks are likely to be prohibitive for most Australians, and certainly
those operating outside the media industry.
The Government's view is that the public has a right to information about the levels and
sources of foreign investment in Australian media companies. Australia's Foreign Investment
Policy currently states that the Government current "recognises community concerns about
foreign ownership of certain Australian assets", and the media industry is considered to be a
"sensitive business".
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The lack of transparency about foreign investment in the media industry is a significant issue.
The media holds an important position in Australian society due to its ability to set news
agendas and the context in which public policy issues are analysed and discussed. In turn, this
allows the media to inform and shape community views on a number of critical social,
economic, and political issues. While there may be additional means by which community
views can be guided and influenced, the media still retains a unique ability to inform and
shape such views. There is a strong policy case to ensure that the levels and sources of foreign
investment in the Australian media are broadly understood and known.
The Government's policy objectives
The key policy objective in relation to foreign investment reporting is to ensure that the
Australian public is able to easily access information regarding the levels and sources of
foreign investment in mainstream media outlets. An ancillary or secondary objective is to
ensure that consideration of media policy issues by Government is informed by an accurate
and up-to-date assessment of the levels and sources of foreign ownership of the Australian
media. The achievement of these objectives will ultimately require the balancing of
competing factors, primarily the benefits of the proposed register in terms of transparency
versus the impost of a disclosure obligation on industry.
The Government's objectives in relation to the abovementioned problem are consistent with
its approach in other industries. There are certain industries that are fundamental to Australian
society and have historically been subject to higher levels of regulatory scrutiny. These
include the agricultural industry, the media industry, the telecommunications industry, and the
transport industry.1
The Government has also previously introduced a register of foreign ownership relating to
agricultural land and water entitlements, and is currently considering implementing a
reporting framework for interests in critical infrastructure assets. The proposed reforms will
ensure that foreign investment in the media industry is scrutinised in the same manner as in
other industries of similar importance.
Options
On 15 August 2017, the Minister for Communications, the Senator the Hon Mitch Fifield,
announced the Government's decision to implement a register of foreign-owned media assets.
The stated objective of the register would be to increase transparency of regulated media
assets (commercial television broadcasting licences, commercial radio broadcasting licences
and associated newspapers). The announcement indicated that foreign persons - as defined in
the FATA - would be required to disclosure holdings of two and a half per cent or higher of
these regulated media assets. In light of this decision, this RIS focuses on the alternative
implementation options that are consistent with the Government's policy approach.
1
These are the industries for which more stringent foreign investment requirements apply under the FATA and FATA
Regulations.
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A register
The following options have been considered in addressing the problem of disclosure of
foreign interests in the Australian media and achieving the Government's policy objectives.
1. No change - this option would see no change in the disclosure of information in relation
to foreign ownership in regulated media assets.
2. Establish a register - this option would see the establishment of a Register of Foreign
Ownership of Media Assets which would require the disclosure of information in relation
to foreign ownership in regulated media assets.
Implementation of a register
In relation to Option 2 (establishing a register), a number of sub-issues are examined, along
with various options and their estimated costs. These are:
3. Method of implementing the register - there are a number of options in terms of how
the register could be established:
a. Stand-alone register - implement a register through stand-alone legislation.
b. BSA register - implement a register through an amendment to the BSA.
c. FATA register - implement a register through an amendment to the FATA.
4. Reporting threshold - the level of ownership that would trigger a requirement for
foreign persons to disclose information to the regulator:
a. at or exceeding two and a half per cent
b. at or exceeding five per cent
c. at or exceeding 15 per cent
5. Reporting frequency - the points in time at which foreign persons would be required to
disclose information to the regulator:
a. continuous disclosure for every change to their company interests provided that the
foreign person still satisfies the reporting threshold
b. disclosure bi-annually
c. disclosure at the end of the financial year and if the foreign person's company
interest changes so that they meet / no longer meet, the reporting threshold.
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Analysis - a register
As noted above, the Government has committed to the implementation of a register. This
decision point- whether or not to implement a register - is included for the sake of
completeness. A third option was not considered feasible in light of the Government's
commitment to implement this change.
Option 1 - No change
This option would preserve the status quo and would not require any regulatory change.
Benefits
Under this option, there would be no additional regulatory impact on foreign investors,
regulated media assets, or the regulator. The current arrangements for reporting and seeking
approval of foreign investments in regulated media assets under the FATA and the FATA
Regulations, together with the notification provisions in the BSA, would not change.
However, this option would not meet the Government's policy objective of increasing
transparency of the level and source of foreign ownership in Australian regulated media
assets, as the information gap that currently exists would remain.
Costs
There would be no change in costs under this option.
Option 2 - establish a register
This option would involve the establishment of a register.
Benefits
The approach would provide the community with increased levels of transparency as to the
level and source of foreign investment in Australian media companies, meet the
Government's policy objectives (stated above), and assist in eliminating the information gap
that currently exists.
Costs
The establishment of a register will result in the imposition of some costs for foreign persons
required to disclose information to a regulator, and for the Commonwealth in establishing and
maintaining a register. It is not possible to estimate these costs without also considering some
of the key elements of a register, namely: the choice of legislative vehicle and regulator; the
frequency of disclosure by foreign persons; and form of disclosure by foreign persons. These
are considered in more detail in the analysis section.
Analysis - implementing a register
Option 3a - Stand-alone register
This option would see the establishment of a stand-alone Commonwealth administered
register for foreign investment in regulated media assets, similar to the way that a stand-alone
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register has been established for the Register of Foreign Ownership of Agricultural Land and
Water Entitlements, established under the Register of Foreign Ownership of Agricultural
Land Act 2015. The logical choice of a regulator to oversee a stand-alone register would be
the Australian Tax Office (ATO).
Option 3b - BSA register
This option would see the register established by amending the BSA, and the register would
be administered by the ACMA.
Option 3c - FATA register
This option would see the register established by amending the FATA and the FATA
Regulations, and the register would be administered by Treasury / Foreign Investment Review
Board (FIRB).
Benefits
The benefits of each option are expected to be broadly similar. Each would result in the
establishment of a register, enhancing transparency regarding the level and source of foreign
investment in Australian media companies, and thus fulfilling the Government's objective of
ensuring the Australian public has easy access to such information. It is not possible to
quantify these benefits. It is unlikely that stakeholders (other than the Government) would
experience any difference in impact from how the register is implemented and who
administers the disclosure of information. Nor would the information be more or less
accessible to the public under one form of register over another. As is alluded to below, the
choice of register and who administers the reporting requirements is primarily relevant in
relation to the costs borne by the Government in establishing the register.
Costs
Each option will involve the establishment of a register and, in broad terms, follow a similar
process for develop and ongoing administration:
Development and passage of enabling legislation.
Establishment by the regulator of information technology and other systems to accept
disclosures by foreign persons and publish the relevant information as a register.
Initial compliance costs for a foreign person, both to ascertain whether they are a foreign
person with a relevant company interest in a regulated Australian media company, and to
then disclose that information to the regulator.
Ongoing compliance costs for foreign persons to update their details on the register, which
in turn will depend on factors such as the reporting threshold and the frequency of such
disclosures.
Ongoing costs for the regulator to update and maintain the register, and satisfy any
reporting requirements.
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The impact of these costs on foreign persons (estimated below) is expected to be broadly
similar for each of the sub-options being considered. The key point of difference in relation to
these options concerns the costs of establishing a register by the regulator. These estimated
costs are outlined in Table 1.
Table 1 - Average establishment costs - regulator
Costs ($) Stand-alone register BSA register FATA register
Administration (regulator) $481,200 $180,600 $430,900
The costs shown in Table 1 relate to staff costs, information technology costs and consultant
costs likely to be associated with establishing a register. For all options considered, these
costs are relatively modest (less than half a million in the first year). However, the lowest
estimated costs are those for option 3b, involving amendments to the BSA with administration
of the register by the ACMA. This reflects the fact that the ACMA already has in place
systems that collate information disclosed to them regarding the control of regulated media
assets under Part 5 of the BSA. This includes the legislated requirement to establish and
maintain a Register of Controlled Media Groups. In contrast, the implementation of a register
through a stand-alone legislative framework, or through the FATA, are expected to be
somewhat higher costs, reflecting the fact that the ATO and Treasury / FIRB have no direct
experience with regulated media assets, or with establishing and maintaining registers
involving these media outlets.
Analysis - Option 4 - reporting threshold
The choice of reporting threshold will have a direct impact on the extent to which foreign
persons would be required to disclosure relevant interests to the regulator. The lower the
reporting threshold, the greater the number of entities and transactions that may be captured
under the reporting framework (and higher relative impacts on industry), and greater
transparency regarding the levels of foreign ownership in the Australian media.
Three reporting thresholds have been considered:
Option 4a - two and a half per cent reporting threshold
Option 4b - five per cent reporting threshold
Option 4c - 15 per cent reporting threshold
Benefits
Option 4a (two and a half per cent) represents the lowest of the reporting thresholds
considered, and would provide the highest level of disclosure, and therefore the greatest
degree of transparency, regarding foreign ownership of regulated Australian media assets.
Options 4b (five per cent) and 4c (15 per cent) would result in relatively fewer foreign
persons and / or fewer potential transactions triggering the disclosure requirements.
Transparency would be lower, although the impact on industry would also be
commensurately lower. Option 4b also has the advantage of the fact that the five per cent
threshold is used for disclosure purposes under the FATA and the Corporations Act.
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Costs
The estimated impacts of the three reporting thresholds are outlined in Table 2 below. For
simplicity, these costs assume an annual reporting obligation (frequency of disclosure is
examined in more detail below). These costs are based on:
the estimated number of foreign persons per annum that are likely to be required to notify
the regulator of their interests
the estimated time it would take for the foreign person to complete the necessary
notification requirements each year
the estimated number of company interests that the regulator receives for a given year that
would require an update to the register
the likely time taken by the regulator to update the register each year.
The following points can be noted from Tables 2 and 3:
The impacts on community organisations are nil.
The impacts for foreign persons (in terms of their disclosure obligations) are modest -
$24,700 per annum for Option 4a (at a two and a half per cent disclosure threshold) falling
to $6,600 per annum for Option 4c (at a 15 per cent disclosure threshold).
The bulk of the estimated total ongoing costs for each option are incurred by the regulator
in administering the register. These range from just under $50,000 per annum for option
4a to $12,500 per annum for option 4c.
By way of comparison, the Regulation Impact Statement prepared for the Register of
Foreign Ownership of Water Entitlements estimated the cost imposed foreign persons to
update their water entitlements to be $73,000 per annum, on average.
Table 2 - Average ongoing costs (reporting thresholds):
businesses and individuals
Costs ($) 2.5 per cent 5 per cent 15 per cent
Businesses and
individuals $24,700 $20,200 $6,600
(foreign persons)
Community
nil nil nil
organisations
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Table 3 - Average ongoing costs (reporting thresholds):
regulator
Costs ($) 2.5 per cent 5 per cent 15 per cent
Administration
$49,000 $39,900 $12,500
(regulator)
In determining the quantum of costs, it is estimated that:
around 60 foreign investors will be affected at a reporting threshold of two and a half per
cent, around 45 foreign investors at a reporting threshold of five per cent, and around 20
foreign investors at a reporting threshold of 15 per cent; and
each foreign investor will hold three company interests at a reporting threshold of two and
a half per cent and at five per cent, and two company interests at a reporting threshold at
15 per cent.
These estimates are based on an analysis of publicly available information although, as noted
in the problem section, this information is partial and incomplete.
Analysis - Option 5 - reporting frequency
As with the reporting threshold, the choice of reporting frequency will influence the extent of
any impact of the register on foreign persons and the regulator. The more frequent the
reporting threshold, the greater the regulatory burden imposed, and vice versa. However,
more frequent reporting will enhance the currency of the register at any point in time. Three
reporting frequencies have been considered:
Option 5a - continuous disclosure
Option 5b - biannual disclosure
Option 5c - annual disclosure
Benefits
Option 5a (continuous disclosure) represents the most frequent reporting threshold. This
would provide the highest level of currency for the register, as it would be continually
updated. However, continuous reporting is also likely to impose the highest regulatory burden
on foreign persons and the regulator due to the costs involved in reporting company interests
and updating the register. Option 5b (biannual disclosure) and Option 5c (annual disclosure)
would see the register being updated less frequently and while this would reduce the currency
of the register, it would lower the regulatory impost.
Costs
The estimated costs of each of the reporting frequencies are outlined at Table 3 below. For
simplicity, these costs assume a reporting threshold of two and a half per cent. These costs are
based on similar drivers as outlined above.
The following points can be noted from Table 3.
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The impacts on community organisations are nil.
The total costs of continuous disclosure (Option 5a) are estimated to be in the order of
$143,000 per annum, with approximately two thirds of these costs ($95,200) incurred by
the regulator.
In contrast, annual disclosure (Option 5c) would result in an estimated cost burden of
$73,700 per annum, again with around two thirds of these ongoing compliance costs
incurred by the regulator.
Table 4 - Average ongoing costs (reporting thresholds):
businesses and individuals
Costs ($) 2.5 per cent 5 per cent 15 per cent
Businesses and
individuals $47,800 $36,300 $24,700
(foreign persons)
Community
nil nil nil
organisations
Table 5 - Average ongoing costs (reporting thresholds):
regulator
Costs ($) 2.5 per cent 5 per cent 15 per cent
Administration
$95,200 $72,100 $49,000
(regulator)
Evaluation and preferred option
The analysis in this RIS highlights that the key decision point for the implementation of a
Register relates to administration: the legislative vehicle for implementing the register and,
more specifically, the regulator itself.
Under all options considered, around two thirds of all estimated ongoing costs would be
incurred by the regulator. Those costs - both in terms of establishing the register and ongoing
administration - are estimated to be lowest where the register is implemented through the
BSA and administered by the ACMA (Option 3b). This reflects that fact that the register
would build on and extend the ACMA's existing functions in relation to media control and
ownership, and utilise (to the extent possible) its existing systems and processes.
The final two decision points for the register relate to the reporting threshold and the reporting
frequency. In this respect, Options 4a (a two and a half per cent reporting threshold) and 5c
(annual reporting) are the preferred options.
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While resulting in a higher burden on foreign persons, the value of a reporting threshold
of two and a half per cent will maximise the transparency of foreign investment in the
Australian media.
This impact will be counterbalanced by annual reporting, rather than continuous.
The two and a half per cent reporting threshold will also support the achievement of the
ancillary objective of ensuring that consideration of media policy issues by Government is
informed by an accurate and up-to-date assessment of the levels and sources of foreign
ownership of the Australian media.
Importantly, the estimated impact of these proposed options on foreign persons - those parties
that would need to disclose information to the ACMA - is minimal. In total, these costs are
estimated to be $24,700 per annum for all foreign persons who are expected to have to
disclose information under the Register, or around $400 per annum for each foreign person
(assuming just under 60 foreign persons would be required to report under the register in any
given year). In the context of the value of foreign capital invested in the Australian media, and
the investors involved, this is a negligible cost.
It is also important to note that beyond the estimated annual cost of around $400, there will be
no other fees payable by foreign persons to report their interests. Given the relatively low
regulatory burden imposed on foreign persons, it is unlikely that the proposed reforms would
materially detract from Australia's attractiveness as a destination for foreign investment. To
the contrary, the proposed reforms would likely enhance public confidence in Australia's
foreign investment framework.
There will also be protections in relation to personal information and commercially sensitive
information.
The information collected will predominantly be of a factual nature, and the register won't
require the disclosure of commercially sensitive information. To this end, the regulator
will be prohibited from publishing any such information, should it inadvertently be
disclosed, where its publication would materially affect the commercial interests of a
foreign person.
There will also be safeguards to ensure that the collection, use and disclosure of any
personal information is consistent with the Privacy Act 1988 and the Australian Privacy
Principles.
In summary, the recommended approach is for the Government to implement a register
(Option 2), via the BSA (Option 3b), to require disclosure of interests in regulated media
companies in excess of two and a half per cent (Option 4a), and for foreign persons to report
annually or when their status changes (Option 5c). These recommendations are expected to
result in the highest likely net benefit.
Consultation
The Government undertook extensive consultations in developing the Broadcasting and
Content Reform Package to which this measure relates. The bills implementing elements of
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that Package - the Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017
and the Commercial Broadcasting (Tax) Bill 2017 - passed the Parliament and is
commencing in October 2017. The development of this register involved consultations with
the Department of Foreign Affairs and Trade, the Attorney-General's Department, the
Treasury, and the ACMA as to any issues that might arise through the implementation of a
Register. However, the consultation did not extend to the decision to implement the register
given the Government's decision to do so.
Implementation
Amendments would be required to the BSA and may also be required for the Australian
Communications and Media Authority Act 2005. These amendments would commence once
the amending Bill has passed both houses of Parliament and has received Royal Assent.
The Bill implementing the register will include provision for a statutory review after three
years. This will provide for the operation of the register and its effectiveness in achieving its
objectives to be assessed. The Government will also monitor the operation of the register on
an ongoing basis to ensure that it continues to meet the Government's policy objectives.
17
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Broadcasting Legislation Amendment
(Foreign Media Ownership and Community Radio) Bill 2017
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
The Bill would amend the Broadcasting Services Act 1992 (BSA), and make a minor
amendment to the Australia Communications and Media Authority Act 2005 (ACMA Act),
implementing the following two measures:
the establishment of a Register of Foreign Ownership of Media Assets (Register)
(Schedule 1); and
the insertion of a new assessment criterion for the applications for, and renewals of,
community radio broadcasting licences relating to material of local significance (Schedule
2).
Register of Foreign Owners of Media Assets
Schedule 1 to the Bill would insert a new division into the BSA (Division 10A) and make
minor consequential amendments to the ACMA Act. Under the new Division 10A, the
Register is to be overseen and maintained by the ACMA. The Register will include
information about the interests held by foreign persons in Australian media companies, being:
companies which hold a commercial television broadcasting licence;
companies which hold a commercial radio broadcasting licence; or
companies which are publishers of a newspaper that is associated with the licence area of
a commercial television or radio broadcasting licence and are constitutional corporations.
The Register is designed to promote increased scrutiny of foreign investment in Australian
media companies, and increase transparency of the levels and sources of foreign ownership in
these companies. There will be five circumstances under which a foreign person would be
required to disclose information to the ACMA (four are ongoing and one is a once-off), and
fines are payable for non-compliance.
The ACMA will be able to utilise a range of sources of information for populating and
updating the Register, including public information and information given by any person.
However, it is anticipated that the main source of information will be the notification
information given by foreign persons in accordance with the reporting obligations.
Foreign persons (which would have the same meaning as under the Foreign Acquisitions and
Takeovers Act 1975 (FATA)) would be required to provide the ACMA with information
about their company interests where the interests exceed a threshold of two and a half per
cent.
18
The type of information that would need to be notified to the ACMA, includes:
for natural persons - the person's date of birth, and the country in which the person is
ordinarily resident;
for corporations - the country in which the corporation was formed;
for trustees - the name of the trust, and the country in which the trust was established;
for foreign government investors to a separate government entity of a foreign country or a
part of a foreign country - the foreign country or the part of the foreign country; and
for foreign government investors - the foreign government.
A natural person's date of birth and contact details will only be collected by the ACMA for
identification purposes and will not be published on the Register. There is also additional
scope for the ACMA not to publish confidential information where its publication would be
prejudicial to the commercial interests of the person and not in the public interest.
To determine whether a person is a foreign person for the purposes of the Register, company
interests of 20 per cent or more are traced up through the chain of entities and a foreign
person's associates, so entities will be characterised as foreign persons if there are sufficient
upstream foreign holders or associates. This is the same approach set out in the FATA for
calculating a person's 'aggregate interest' through the use of the tracing provisions in section
19 of the FATA. To take an example, assume that Company A is a foreign person and
controls 25 per cent of the voting power of a downstream company, Company B. In turn,
Company B has a 40 per cent holding in Company C. Under section 19, Company B and C
would be considered to be foreign persons even if they were incorporated in Australia,
because they are held by Company A. If Company B acquired a 4 per cent share in an
Australian media company, then Company B would be required to notify the ACMA of this
under the new register provisions.
The ACMA would be required to maintain the Register and make it available on its website. Using the
information that it has obtained, the ACMA will also be required to present an annual report to the
Minister outlining the company interests in Australian media companies that were held by foreign
stakeholders at the end of the relevant financial year. This report may include the ACMA's
observations about trends relating to the company interests in Australian media companies that are
held by foreign stakeholders.
The Register measure contained in Schedule 1 to the Bill engages the following human rights
and freedoms:
the right to protection from unlawful or arbitrary interferences with an individual's
privacy;
the right to freedom of expression; and
the right to be free from discrimination.
Right to privacy
Article 17 of the International Covenant on Civil and Political Rights (ICCPR) prohibits
unlawful or arbitrary interferences with a person's privacy, family, home or correspondence.
It also provides that everyone has the right to the protection of the law against such
interference or attacks. The Human Rights Committee has interpreted the term 'unlawful' to
19
mean that no interference can take place except in cases envisaged by law, which itself must
comply with the provisions, aims and objectives of the ICCPR. The Human Rights
Committee has also indicated that interference will not be considered 'arbitrary' if it is
provided for by law, is in accordance with the provisions, aims and objectives of the ICCPR,
and is reasonable in the particular circumstances.
Privacy is a concept which is broad in scope and includes a right to information privacy. The
Bill directly engages the right to privacy under Article 17 of the ICCPR because it requires
the provision of information by, and authorises the use and disclosure of certain information
about individuals, for inclusion in the new Register. Specifically, under the new Division
10A, there would be five circumstances under which foreign persons, who hold company
interests in an Australian media company of two and a half per cent or more, would be
required to disclose information to the ACMA:
when the person becomes a foreign stakeholder in an Australian media company (within
30 days of coming into such a position) (proposed section 74E);
when the person ceases to be a foreign stakeholder in an Australian media company
(within 30 days of coming into such a position) (proposed section 74F);
at the end of each financial year, by the foreign stakeholders (within 30 days of the end of
the financial year) (proposed section 74G);
at the commencement of Division 10A (within a six month period known as the 'initial
disclosure period') (proposed section 74H);
at any time requested by the ACMA by written notice (proposed section 74HAA).
'Company interest' is defined in section 6 of the BSA, and means, in relation to a person who
has a shareholding interest, a voting interest, a dividend interest or a winding-up interest in a
company, means the percentage of that interest or, if the person has two or more of those
interests, whichever of those interests has the greater or greatest percentage. The Bill adopts
the meaning of 'company interest' as set out in the BSA.
It is anticipated that the ACMA would create forms for the notification by foreign persons. If
a foreign person fails to comply with the notification obligations under the new Division 10A,
the person may be liable for an administrative penalty (the maximum penalty for a body
corporate is 300 penalty units, and the maximum for other persons is 60 penalty units).
Infringement notices may also be issued, with reduced penalty amounts (60 penalty units for
body corporates, and 10 penalty units for any other person).
The information collected by the ACMA may only be used or disclosed for the purposes of
the Register and the preparation of the related annual report which is to be presented to the
Minister. The circumstances in which information may be collected and used are clearly
defined by the Bill and are therefore a lawful interference with the right to privacy. Moreover,
as it would not be possible to achieve the objectives of the proposed measure without
collecting some information about identifiable individuals, these limitations on the right to
privacy are reasonable in the circumstances. They do not interfere with the right to privacy of
those individuals more than is necessary to achieve the legitimate objective of ensuring the
Australian public is able to easily access information regarding the levels and sources of
foreign investment in Australian media outlets.
Right to freedom of expression
20
Paragraph 2 of Article 19 of the ICCPR requires States Parties to guarantee the right of
everyone to freedom of expression, including the 'freedom to seek, receive and impart
information and ideas of all kinds'. The right to freedom of expression includes the right not
to impart information.
Schedule 1 to the Bill engages paragraph 2 of Article 19 of the ICCPR because it requires
foreign individuals to provide information such as their names, date of birth, contact address,
email address, telephone number, and country of residence, and some of this information (not
all) could be published on the Register. There are no less restrictive means of achieving the
legitimate purpose the limitation created by the new notification obligations under Schedule 1
to the Bill seeks to achieve. Moreover, to the extent the Bill interferes with the right to
freedom of expression, the interference is relatively minor and has a clear legal basis. These
limitations are therefore considered to be reasonable, necessary and proportionate.
Right to be free from discrimination
Schedule 2 to the Bill also engages Article 26 of the ICCPR, which recognises that all persons
are equal before the law and are entitled without discrimination to the equal protection of the
law. While the ICCPR does not define the term 'discrimination' (nor does it indicate what
constitutes discrimination), the Human Rights Committee considers that in the context of the
ICCPR, it should be understood to imply any distinction, exclusion, restriction, or preference
which is based on a range of things, including national origin, and which has the purpose or
effect of nullifying or impairing the recognition, enjoyment or exercise by all persons, on an
equal footing, of all rights and freedoms.
The Bill also generally engages the rights protected by the International Convention on the
Elimination of All Forms of Racial Discrimination (ICFRD Convention). Paragraph 1 of
Article 1 of the ICFRD Convention defines the term 'racial discrimination' to mean 'any
distinction, exclusion, restriction or preference based on race, colour descent, or national or
ethnic origin which has the purpose or effect of nullifying or impairing the recognition,
enjoyment or exercise, on an equal footing, of human rights and fundamental freedoms in the
political, economic, social, cultural, or any other field of public life'. Under Article 5 of the
ICFRD Convention, State Parties undertake to prohibit and eliminate racial discrimination in
all its forms and to guarantee the right of everyone, without distinction as to matters such as
national origin, to equality before the law in the enjoyment of civil, political, economic, social
and cultural rights.
Schedule 1 to the Bill limits Article 26 of the ICCPR and Articles 2 and 5 of the ICFRD
Convention because the core obligations imposed by the Bill only apply to a 'foreign person',
which includes an individual not ordinarily resident in Australia. While an Australian citizen
who is not ordinarily resident in Australia may be a 'foreign person' for the purposes of
Schedule 1 to the Bill, it is anticipated that the majority of individuals who are directly
affected by this Bill will not be Australian citizens.
While the Bill, once enacted, will primarily affect individuals who are citizens of countries
other than Australia, there is not a less restrictive way of achieving the objectives of Schedule
1 to the Bill. Given it only requires individuals who are foreign persons to provide certain
information, and the Bill does not interfere with the rights of citizens from countries other
than Australia more than to the extent possible to achieve the objective of the Bill, these
limitations are considered reasonable and proportionate.
Community Radio Measure
21
Under this measure, a new assessment criterion would be inserted into subsection 84(2) of the
BSA. The effect of the new criterion would be that the ACMA would be required to consider
the extent to which the proposed service or services would provide material of local
significance when assessing applications for community radio broadcasting licences. The new
criterion would also be relevant to the renewal of existing community radio broadcasting
licences, in the same way as the other criteria. This measure is intended to encourage local
participation and the provision of locally relevant content, in recognition of the important role
that community radio broadcasters have in providing a voice to local communities and
informing local communities through coverage of the issues that affect them.
Schedule 2 also contains two application provisions which have the effect of ensuring that the
new criterion only applies to decisions relating to community radio broadcasting licence
applications and renewals made after the commencement of the Bill.
Schedule 2 to the Bill does not directly engage any applicable human rights or freedoms. In
coming to this conclusion, specific consideration was given to the following human rights
relevant to broadcasting:
the right of all people to take part in cultural life. (Article 15 of the ICCPR);
the right to freedom of expression (Article 19 of the ICCPR);
the right of ethnic, religious or linguistic minorities to enjoy their own culture (Article 27
of the ICCPR);
the right of all persons with disabilities to freedom of expression (Article 21 of the
Convention on the Rights of Persons with Disabilities (CRPD)); and
the right of all persons with disabilities to participate in cultural life (Article 30 of the
CRPD).
The measures contained in Schedule 2 to the Bill relate to community radio broadcasting
licensees, which are corporations, rather than individuals. Accordingly, the Bill's amendments
to the BSA do not have a direct impact on human rights. However, it is noted that the effect of
the new assessment criterion on community radio broadcasting licensees will assist with
providing a voice to local communities in shaping the services that they receive and informing
communities through locally relevant information. In this sense, the measure indirectly assists
with promoting the rights under Articles 15, 19, 21 and 30 of the ICCPR, and Article 21 of
the CRPD.
The new localism assessment criterion would have the same priority as the current criteria,
including the extent to which the proposed services would meet the needs of the community
within the licence area, and the diversity of interests of that community. This ensures that
community radio services targeted to particular ethnic, religious or linguistic minorities are
not disadvantaged, consistent with Article 27 of the ICCPR.
Conclusion
The Bill is compatible with human rights because to the extent that it may limit human rights,
those limitations are reasonable, necessary and proportionate.
22
ABBREVIATIONS
The following abbreviations are used in this explanatory memorandum:
ACMA Australian Communications and Media Authority
ACMA Act Australian Communications and Media Authority Act
2005
ASX Australian Securities Exchange
BSA Broadcasting Services Act 1992
Bill Broadcasting Legislation Amendment (Foreign Media
Ownership and Community Radio) Bill 2017
Department Department of Communications and the Arts
FATA Foreign Acquisitions and Takeovers Act 1975
FATA Regulations Foreign Acquisitions and Takeovers Regulation 2015
Register Register of Foreign Ownership of Media Assets
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NOTES ON CLAUSES
Clause 1 - Short title
Clause 1 provides that the Bill, when enacted, may be cited as the Broadcasting Legislation
Amendment (Foreign Media Ownership and Community Radio) Bill 2017.
Clause 2 - Commencement
Clause 2 provides for the commencement of the Bill. The Bill would commence on the day
after the Bill received the Royal Assent.
Clause 3 - Schedules
Clause 3 provides that legislation that is specified in a Schedule to the Bill is amended or
repealed as set out in the applicable items in that Schedule, and any other item in a Schedule
has effect according to its terms.
There are two Schedules to the Bill.
24
SCHEDULE 1-- FOREIGN MEDIA OWNERSHIP
Schedule 1 to the Bill establishes a Register of Foreign Owners of Media Assets to be
administered by the ACMA. The Register will include information about the company
interests held by foreign persons in Australian media companies. Australian media companies
are companies which:
hold a commercial television broadcasting licence;
hold a commercial radio broadcasting licence; or
are publishers of a newspaper that is associated with the licence area of a commercial
television or radio broadcasting licence and are a constitutional corporation.
The expression, 'company interest' is defined in section 6 of the BSA, and means, in relation
to a person who has a shareholding interest, a voting interest, a dividend interest or a winding-
up interest in a company, the percentage of that interest or, if the person has two or more of
those interests, whichever of those interests has the greater or greatest percentage.
Foreign ownership is a common feature of the Australian media industry, and most large
media organisations have some degree of foreign investment. Despite it being a common
feature of the Australian media landscape, no existing regulatory or other framework
explicitly collates and discloses the levels and sources of foreign investment in Australian
media assets.
Under the FATA, while an assessment is made that the proposed investment is not
contrary to Australia's national interest, the details of the investment, or the fact that a
proposed investment has been approved, are not typically made publicly available.
Under the ASX, disclosure is made in respect of listed entities above a five per cent
threshold. However, these disclosures don't explicitly state whether the investing person
is a foreign person.
Under the BSA, the reporting regime requires disclosure when a person comes into a
position to control, or ceases to be in a position to control, an Australian media company.
However, these disclosures don't specifically identify foreign persons, and generally
wouldn't require disclosure for holdings of less than 15 per cent.
It is important that the Australian public has transparent information regarding the levels and
sources of foreign ownership in Australian media companies, given the importance of the
media in informing and shaping community views. There is a strong policy case to ensure the
levels of foreign investment in the Australian media are broadly understood and known. The
implementation of the Register provides an effective solution to the identified information gap
by complementing existing reporting frameworks by compiling, and making publicly
available, information on the levels and sources of foreign investment in Australian media
companies.
There will be five circumstances under which foreign persons will be required to disclose
information to the ACMA (four are ongoing and one is once-off during a transitional period).
Fines are payable for non-compliance with the proposed notification requirements. Although
the ACMA will be able to utilise a range of sources of information for populating and
updating the Register, including public information and information given by any person, the
25
main source of information is anticipated to be information given by foreign persons in
accordance with the reporting obligations.
Foreign persons (which would have the same meaning as under the FATA) would be required
to report at different times about their interests, where their company interests exceed a
specified threshold (two and a half per cent). To determine whether a person is a foreign
person, the FATA foreign person tracing rules apply, so that interests of 20 per cent or more
are traced up through the chain of entities (which includes associates). Entities will be
characterised as foreign persons if there are sufficient upstream foreign holders, as per the
FATA rules. To take an example, assume that Company A is a foreign person and controls 25
per cent of the voting power of a downstream company, Company B. In turn, Company B has
a 40 per cent holding in Company C. Under section 19 of the FATA, Company B and C
would be considered to be foreign persons even if they were incorporated in Australia,
because they are held by Company A. If Company B acquired a 4 per cent share in an
Australian media company, then Company B would be required to notify the ACMA of this
under the new register provisions.
Australian Communications and Media Authority Act 2005
Item 1 - Paragraph 53(2)(k)
Section 52 of the ACMA Act provides, subject to section 53, for a Division within the ACMA
to delegate all or any of the functions and powers delegated to it under section 52 to a member
of the Division, an associate member, an ACMA staff member, or a person whose services are
made available to the ACMA under subsection 55(1).
Item 1 carves out from the limits on powers delegable to persons other than the Division (as
set out in section 53), the power to issue a notice under Division 10A of Part 5 of the BSA.
The effect of this amendment is that the ACMA is able to delegate directly to any ACMA
staff member the power to issue notices under new Division 10A.
Broadcasting Services Act 1992
Item 2 - Subsection 52A(1)
Item 3 - Subsection 52A(2)
Item 4 - Subsection 52A(2)
Items 2 - 4 would make three consequential changes stemming from the insertion of the new
Division 10A into Part 5 of the BSA by item 5.
Section 52A of the BSA deals with the application of the BSA in relation to newspapers.
Among other things, it provides that the BSA has the effect that it would have if each
reference in Part 5 to a 'newspaper' were confined to a newspaper where the publisher is a
constitutional corporation. Section 52A is designed to enable the provisions referring to
newspapers to be severably underpinned by various heads of power in the Constitution. As
the proposed new laws in respect of the Register of Foreign Owners of Media Assets are
intended to have extraterritorial application, it is necessary to exclude the new Division 10A
from the operation of section 52A.
Item 5 - After Division 10 of Part 5
Item 5 would insert the new Division 10A into Part 5 of the BSA. The new Division 10A
would establish the Register of Foreign Owners of Media Assets, and sets out related
notification, penalty and administration arrangements.
26
An outline of the proposed new Division 10A is as follows:
Register of Foreign Owners of Media Assets
Division 10A
Subdivision A Introduction
74A Simplified outline of this Division
74B Definitions
74C Foreign stakeholder
Subdivision B Register of Foreign Owners of Media Assets
74D Register of Foreign Owners of Media Assets
74E Information to be set out in the Register of Foreign Owners of Media
Assets
Subdivision C Notification
74F Notification by a person who becomes a foreign stakeholder in an
Australian media company
74G Notification by a person who ceases to be a foreign stakeholder in an
Australian media company
74H Notification by a person who is a foreign stakeholder in an Australian
media company at the end of a financial year
74J Notification by a person who is a foreign stakeholder in an Australian
media company at the commencement of this Division
74K Notification by a person who is a foreign stakeholder in an Australian
media company--requirement by the ACMA
74L Requirement for executors, administrators and liquidators to give
notification
74M Person may give the ACMA relevant information
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Subdivision D Miscellaneous
74N Minister may direct the ACMA about the performance of its
functions or the exercise of its powers
74P Service of summons, process or notice on corporations incorporated
outside Australia
74Q Extra-territorial application
74R Annual report
74S Part 13 not limited
74T Limitation for damages
These sections are discussed in more detail below.
Proposed Division 10A--Register of Foreign Owners of Media Assets
Subdivision A--Introduction
Proposed section 74A - Simplified outline of the Division
Proposed section 74A provides a simplified outline of the new Division 10A to assist the
reader.
The ACMA must maintain the Register.
The Register must set out, for each Australian media company, information
about each foreign stakeholder in the company.
Foreign stakeholders must notify the ACMA of their company interests in
Australian media companies.
A note is included at the end of the simplified outline to remind readers that the expression,
'company interests' is defined in section 6 of the BSA.
Proposed 74B - Definitions
The proposed section 74B inserts a number of definitions for key terms used in the new
Division 10A.
Meaning of ACMA official
The term ACMA official has the same meaning as in the ACMA Act.
Meaning of Australia
The term Australia, geographically would include all the external Territories.
28
Meaning of Australian media company
The term Australian media company would capture three types of corporate entities:
a company which holds a commercial television broadcasting licence; or
a company which holds a commercial radio broadcasting licence; or
a company that is a publisher of a newspaper that is associated with the licence
area of a commercial television or radio broadcasting licence and which is a
constitutional corporation.
Meaning of designated information
The term designated information is central to the proposed notification obligations and
Register-publication related provisions. It covers the foreign person's contact details (address,
email address and telephone number (if any)), and also extends to the following types of
information which varies depending on the entity type of the foreign person:
for natural persons:
- the person's date of birth; and
- the country in which the person is ordinarily resident;
for corporations:
- the country in which the corporation was formed;
for trustees:
- the name of the trust; and
- the country in which the trust was established;
for foreign government investors in a separate government entity of a foreign
country or a part of a foreign country:
- the foreign country or the part of the foreign country;
for foreign government investors:
- the foreign government.
While the above information must be reported to the ACMA, if the ACMA is satisfied that
the publication of commercial confidential information on the Register would be substantially
prejudicial to a person's commercial interest and not in the public interest to publish, the
ACMA will not be permitted to publish the information (proposed section 74E).
Meaning of foreign government
The term foreign government has the same meaning as in the FATA. It covers an entity
(within the ordinary meaning of that term) that is: a body politic of a foreign country; a body
politic of part of a foreign country; and any part of such body politics.
29
Meaning of foreign government investor
The term foreign government investor has the same meaning as in the FATA. Under the
FATA foreign government investors include foreign governments and their separate agencies
and instrumentalities, and also corporates, trusts and limited partnerships (through their
trustees, general partners and limited partners) in which any of them hold an interest of at
least 20 per cent, or more than one hold an interest of at least 40 per cent.
Meaning of foreign person
The term foreign person is central to the new Division 10A. It has the same meaning as given
in the FATA, namely:
an individual not ordinarily resident in Australia (an Australian citizen who is
living overseas may therefore be a 'foreign person' under this limb);
- See Example 1 below.
a corporation in which an individual not ordinarily resident in Australia, a
foreign corporation or a foreign government, holds a substantial interest
(under the FATA, a person holds a substantial interest in an entity if the
person holds an interest of at least 20 per cent in the entity);
- See Example 2 below.
a corporation in which two or more persons, each of whom is an individual not
ordinarily resident in Australia, a foreign corporation or a foreign government,
hold an aggregate substantial interest (under the FATA, two or more persons
hold an aggregate substantial interest in an entity if the persons hold an
aggregate interest of at least 40 per cent in the entity).
- See Example 3 below.
the trustee of a trust in which an individual not ordinarily resident in Australia,
a foreign corporation or a foreign government holds a substantial interest
(under the FATA, a person holds a substantial interest in the case of a trust
(including a unit trust), if a person holds together with any one or more
associates, a beneficial interest in at least 20 per cent of the income or property
of the trust);
- See Example 4 below.
the trustee of a trust in which two or more persons, each of whom is either an
individual not ordinarily resident in Australia, a foreign corporation or a
foreign government, hold an aggregate substantial interest (under the FATA,
two or more persons, together with any one or more associates of any of them
hold, in the aggregate, beneficial interests in at least 40 per cent of the income
or property of the trust).
- See Example 5 below.
a foreign government (as defined under the FATA); or
any other person, or any other person that meets the conditions, prescribed by
the regulations made under the FATA. Currently, the FATA Regulation
30
specifies a general partner of a limited partnership who is either: an individual
not ordinarily resident in Australia, a foreign corporation or a foreign
government that holds an interest of at least 20 per cent in a limited
partnership; or two or more persons, each of whom is an individual not
ordinarily resident in Australia, a foreign corporation or foreign government
that hold an aggregate interest of at least 40 per cent in the limited partnership.
For the purposes of the definition of 'foreign person' under the FATA, which is adopted
under the new Division 10A, interests held by upstream foreign persons will be taken into
account in determining substantial interests.
Examples of the application of the various definitions is below. Note that these examples are
for illustrative purposes only.
Example 1
James is an Australian citizen, and owns a six per cent interest in QWERTY Ltd, an entity
which satisfies the definition of 'Australian media organisation'. In 2015, James relocated to
the United States, where he is now deemed to ordinarily reside. James would be required to
notify the ACMA of his company interest in QWERTY Ltd, because James holds more than a
two and a half per cent interest in an Australian media company and is person not ordinarily
resident in Australia.
Example 2
XYZ Pty Ltd is an Australian registered constitutional corporation. XYZ Pty Ltd holds a three
per cent interest in QWERTY Ltd, an entity which satisfies the definition of 'Australian media
organisation'. XYZ Pty Ltd has two shareholders: Allan, who is not an Australian citizen, is
ordinarily resident in Australia, and holds 70 per cent of the shares. Joanna, who is an
Australian citizen, is ordinarily resident in New Zealand, and holds 30 per cent of the shares.
XYZ Pty Ltd would be required to notify the ACMA of its interest in QWERTY Ltd, because
XYZ Pty Ltd holds more than a two and a half per cent interest in an Australian media
company, and it is a corporation in which an individual not ordinarily resident in Australia
holds a substantial interest.
Example 3
DEF Inc. is a corporation registered in the United States (and therefore a foreign
corporation). DEF Inc holds a 20 per cent share in JKL Pty Ltd, an Australian registered
constitutional corporation. JKL Pty Ltd holds a five per cent interest in QWERTY Ltd, an
entity which satisfies the definition of 'Australian media organisation'. JKL Pty Ltd would be
required to notify the ACMA of its interest in QWERTY Ltd, because JKL Pty Ltd holds more
than a two and a half per cent interest in an Australian media company, and is a corporation
in which a foreign corporation holds a substantial interest.
Example 4
Nicholas is a United States citizen, and is ordinarily resident in the United States. Nicholas is
the sole director of QRS Pty Ltd, which is the sole trustee of the PQR Trust, a trust which was
established in Australia. Nicholas controls all of the shares in QRS Pty Ltd and is the sole
beneficiary of the trust. The PQR Trust has a 10 per cent interest in QWERTY Ltd, an entity
which satisfies the definition of 'Australian media organisation'. The PQR Trust must notify
the ACMA of its interest in QWERTY Ltd, because the PQR Trust holds more than a two and
31
a half per cent interest in an Australian media company, and has a foreign person who has a
beneficial entitlement to at least 20 per cent of the income or property of the trust.
Example 5
Following on from Example 5, Nicholas' sister Heather, and his son Stewart, each acquire a
15 per cent interest in QRS Pty Ltd and become beneficiaries in the PQR Trust, while Maeve,
an external third party (who is an Australian citizen and ordinarily resides in Australia)
acquires a 55 per cent interest. Nicholas, Heather and Stewart are all citizens of the United
States and ordinarily reside there, and are considered to be associates of each other.
Together, they own 45 per cent of the shares in QRS Pty Ltd (in equal shares) and have a
beneficial entitlement to 45 per cent (in equal shares) of the income or property of the trust.
The PQR Trust must notify the ACMA of its interest in QWERTY Ltd, because the PQR Trust
owns more than a two and a half per cent interest in an Australian media company, and has
foreign persons who have, in aggregate, a beneficial entitlement to at least 40 per cent of the
income or property of the trust.
For the purposes of calculating the interest (or aggregate interest) that a person or entity holds,
for the purpose of determining whether they are a 'foreign person' under the FATA, the
interests held by the person's associates are also taken into account. The term associate
(section 6 of the FATA) is defined broadly. By way of example, the following people would
be associates of a foreign person based on this definition (this is not an exhaustive list):
a person's 'relative' (section 4 of the FATA defines this term as having the
meaning given by the Income Tax Assessment Act 1997);
any person with whom the person is acting, or proposes to act, in concert in
relation to a covered action;
any person with whom the person carries on a business in partnership;
any entity of which the person is a senior officer (e.g. company director,
trustee) or any holding entity, and any senior officer of the entity;
any entity whose senior officers are accustomed to, or under an obligation,
whether formal or informal, to act in accordance with the directions,
instructions or wishes of the person, or, if the person is an entity, the senior
officers of the person;
an entity if the person is accustomed or under an obligation, whether formal or
informal, to act in accordance with the directions, instructions or wishes of the
entity or the senior officers of the entity;
any corporation in which the person holds a 'substantial interest' (as defined
under the FATA);
if the person is a corporation, a person who holds a 'substantial interest' in the
corporation;
the trustee of a trust in which the person holds a 'substantial interest';
if the person is a trustee of a trust, a person who holds a 'substantial interest'
in the trust;
32
if the person is a foreign government, a separate government entity or a
foreign government investor;
any other person that is a foreign government in relation to that country (or
any part of that country); and
any other person that is a separate government entity in relation to that country
(or any part of that country).
Meaning of foreign stakeholder
The term foreign stakeholder, in relation to an Australian media company, has the meaning
given by the proposed section 74C (see below).
Meaning of initial disclosure period
The term initial disclosure period means the period of six months beginning the day after the
Bill receives the Royal Assent (being the day when the new Division 10A commences).
Meaning of person
The term person includes a foreign person.
Meaning of separate government entity
The term separate government entity has the same meaning as in the FATA. It means an
individual, a corporation, or a corporation sole that is an agency or instrumentality of the
foreign country and is not part of the body politic of a foreign country or of a part of a foreign
country.
Proposed section 74C - Foreign stakeholder
Proposed section 74C would specify that for the purposes of the new Division 10A, if a
foreign person has company interests in an Australian media company of two and a half per
cent or more, that person is a foreign stakeholder in that company. The consequence of being
a foreign stakeholder is that such persons must report those interests to the ACMA (refer to
proposed sections 74F, 74G, 74H, 74J, and 74K).
Subdivision B--Register of Foreign Owners of Media Assets
Proposed section 74D - Register of Foreign Owners of Media Assets
Proposed subsection 74D(1) would require the ACMA to maintain the Register. The act of
maintenance includes keeping the Register current and accurate, and updating it, as required.
The Register would need to be maintained by electronic means (proposed subsection 74D(2))
and made available for inspection on the internet (purposed subsection 74D(3). The ACMA is
expected to publish the Register on its website and in such a way that it is easily accessible by
the public.
Proposed subsection 74D(4) explicitly states that the Register is not a legislative instrument.
This is a statement that is merely declaratory of the law, reflecting the purely administrative
character of the Register.
Proposes 74E - Information to be set out in the Register of Foreign Owners of Media
Assets
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Proposed subsection 74E(1) would require the Register to set out, for each Australian media
company, the following information about each foreign stakeholder in the company:
the foreign stakeholder's full name;
the foreign stakeholder's company interests in the company;
the method used to determine those company interests;
the reason why the foreign stakeholder is a foreign person (under this
reporting item, the person's foreign interests of 20 per cent or more are traced
up through chains of entities, thereby revealing the extent of foreign
ownership);
for natural persons--the country in which they are ordinarily resident;
for corporations--the country in which they were formed;
for trustees: the trust name, and country in which the trust was established;
for foreign government investors in full or part (by application of
paragraph 17(a) of the FATA Regulations to a separate (or part of a)
government entity of a foreign country)--the foreign country or the part of the
foreign country, as the case may be;
for foreign government investors in full or part (by application of
paragraph 17(b), (c), (d) or (e) of the FATA Regulations to a separate
government entity of a foreign country or a part of a foreign country --the
foreign government; and
for foreign government investors wholly or partly as the result of the
application of paragraph 17(b), (c), (d) or (e) of the FATA Regulation to a
separate government entity of a foreign country or a part of a foreign
country--the foreign country or the part of the foreign country, as the case
may be.
The ACMA will be able to utilise a range of sources of information for populating and
updating the Register, including public information and information given by any person. It is
anticipated that the main source of information will be the information given by foreign
persons in accordance with the five separate reporting obligations under proposed subsections
74E, 74F, 74G, 74H and 74HA.
Proposed subsection 74E(2) provides an exception to the publication of information
requirements under subsection (1) to address commercially sensitive information. The
Register must not set out particular information if the ACMA is satisfied that disclosure of the
information on the Register could reasonably be expected to materially prejudice the
commercial interests of the person.
This provision operates as a safeguard against the disclosure of information that would not
ordinarily be provided to third parties due to its confidential nature. However, it is anticipated
that the information which will be provided to the ACMA will be factual in nature and able to
be made publicly available.
34
Proposed Subdivision C--Notification
Proposed Subdivision C would create five circumstances under which foreign persons will be
required to disclose information to the ACMA. Foreign persons who hold company interests
in an Australian media company of two and a half per cent or more will be required to notify
the ACMA under the following circumstances:
When the person becomes a foreign stakeholder in an Australian media
company (within 30 days of coming into such a position) (proposed section
74F);
- See Example 1 below.
When the person ceases to be a foreign stakeholder in an Australian media
company (within 30 days of coming into such a position) (proposed section
74G);
- See Example 2 below.
At the end of each financial year, by the foreign stakeholders (within 30 days
of the end of the financial year)(proposed section 74H);
- See Example 3 below.
At the commencement of the new Division 10A (within a six month period
known as the 'initial disclosure period') (proposed section 74J);
- See Example 4 below.
At any time requested by the ACMA by written notice (proposed section
74K).
- See Example 5 below.
Note that these examples are for illustrative purposes only.
Example 1
Giovanni is an Italian citizen, and is ordinarily resident in Italy. On 30 September 2018,
Giovanni acquired a three percent interest in QWERTY Ltd, an entity which satisfies the
definition of 'Australian media organisation'. Giovanni became a foreign stakeholder in an
Australian media company on 30 September 2018, and is required to notify the ACMA of his
interest within 30 days from this date.
Example 2
Following on from Example 1, on 30 September 2019, Giovanni decides to dispose of one
percent of his interest in QWERTY Ltd, so that he now holds a two per cent interest in
QWERTY Ltd. Giovanni ceased to be a foreign stakeholder in an Australian media company
on 30 September 2019, and is required to notify the ACMA of this fact within 30 days from
this date.
Example 3
Following on from Example 1, on 30 June 2018, Giovanni still held a three per cent interest
in QWERTY Ltd. Giovanni is a foreign stakeholder in an Australian media company at the
35
end of the financial year, and is required to provide the ACMA with any changes to his
designated information within 30 days from this date.
Example 4
Paulina is a citizen of Cyprus and is ordinarily resident in the United States. At the
commencement of the new Division 10A, Paulina holds a 22 per cent interest in QWERTY
Ltd, an entity which satisfies the definition of 'Australian media organisation'. Paulina is a
foreign stakeholder in an Australian media company at the commencement of the new
Division 10A, and is required to notify the ACMA of this fact within six months of the
commencement of the new Division 10A.
Example 5
Following on from Example 4, Paulina receives a notice from the ACMA requiring her to
update her details. Paulina is required to provide the ACMA with the information it has
requested within the time specified in the notice (which must not be less than 14 days from the
date that the notice is given).
Proposed section 74F - Notification by a person who becomes a foreign stakeholder in an
Australian media company
Under the first circumstance of notification, a foreign person who becomes a foreign
stakeholder in a particular Australian media company must give the following information to
the ACMA:
The person's name; and
How the person became a foreign stakeholder in the company (under this
reporting item, the foreign person must give details about how the interest
arose and when); and
The person's company interests in the company (under this reporting item, the
foreign person must specify the amount of the interest); and
The method used to determine those company interests; and
The reason why the person is a foreign person (under this reporting item, the
foreign person must give an explanation of how they are a foreign person
within the meaning of the FATA including, where relevant, tracing their
interests); and
'Designated information' relating to the person (this reporting item covers a
range of identifying information such as the person's country of residence for
natural persons, and the country of formation for corporations); and
Any other information relating to the person as specified in a legislative
instrument made by the ACMA under proposed paragraph 74E(1)(g).
The information must be given to the ACMA within 30 days after the acquisition of the two
and a half per cent or greater interest takes place (see Example 1 above).This reporting
obligation is in addition to information and other disclosure obligations the foreign person
may have when it applies for approval of foreign investment proposals in accordance with the
FATA.
36
A foreign person will contravene a civil penalty provision if they fail to comply with
proposed section 74F(1), and it would be a separate contravention for each day that the person
has failed to comply with the notification obligation (subsections 74F(3) and(4)).
Civil penalty provision are enforceable under Division 2, Part 14B of the BSA.
Subsection 74F(5) provides that subsection 74F(1) is a designated infringement notice
provision. This will enable an authorised infringement notice officer to issue, under Part 14E
of the BSA, an infringement notice if the officer believes on reasonable grounds that the
person contravened a civil penalty provision relating to the foreign interest notification
obligation.
Infringement notices are a useful alternative to court action. Only a limited number of
provisions in the BSA are designated infringement notice provisions. The formal
requirements for issuing an infringement notice under the BSA are set out in clauses 10.2 to
10.5 of the Guidelines relating to the ACMA's enforcement powers under the BSA.
A person who is given an infringement notice can choose to pay the amount specified in the
notice as an alternative to having court proceedings brought against the person for a
contravention of a provision subject to an infringement notice under Part 14B of the BSA.
Payment of the amount is not an admission of guilt or liability. However, if the person fails to
pay the infringement notice, the person is exposed to the risk that the ACMA may apply to a
court for an order that the person pay a civil penalty. If the person pays the pecuniary penalty
amount, proceedings cannot be brought against the person for the contravention.
The amount of penalty units for the five notification obligations are set out in the table below.
Table 1. Summary of penalty amounts
Type of provision Amount of penalty (based on one penalty unit of
$210)
Body corporate Non-body corporate
Civil penalty provision 300 penalty units 60 penalty units
currently ($63,000) currently $12,600)
Proposed subsections 74F(3), 74G(2),
74H(3), 74J(3), 74K(4),
Designated infringement notice 60 penalty units 10 penalty units
provision (currently $12,600) (currently, $2,100)
Proposed subsections 74F(5), 74G(4),
74H(5), 74J(5), 74K(6)
The common law privilege against self-incrimination entitles a natural person to refuse to
answer any question, or produce any document, if the answer or the production would tend to
incriminate that person. A foreign person, who is a natural person, will not be required to
comply with the notification obligation under proposed subsection 74F(1) if giving the
information or producing the document might tend to incriminate him or her. This preserves
the privilege against self-incrimination; subsection 74F(6) conserves this privilege.
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Proposed subsection 74G - Notification by a person who ceases to be a foreign
stakeholder in an Australian media company
Proposed subsection 74G(1) sets out the second notification obligation imposed on foreign
persons. Under this provision, if a foreign stakeholder in an Australian media company is no
longer a foreign stakeholder in that company, the person must provide the following
information to the ACMA:
notice of the termination of the company interest (under this reporting item, it
is expected that the person will also give the date upon which the company
interest ceased); and
the circumstances that resulted in the company interest terminating (for
example, the cessation arose as a result of the sale (or other divestiture) of
securities).
The information must be provided to the ACMA in writing within 30 days after the foreign
person ceases to hold the company interest.
Similar to the notification obligation under proposed subsection 74G(1), the cessation of the
holding notification obligation is a civil penalty provision (proposed subsection 74G(2)) and
is also a designated infringement notice provision (proposed subsection 74G(4)). It will be a
separate contravention for each day that the person has failed to comply (proposed subsection
74G(3)).
Proposed subsection 74G(5) conserves the privilege against self-incrimination.
Proposed section 74H - Notification by a person who is a foreign stakeholder in an
Australian media company at the end of a financial year
Proposed subsection 74H(1) sets out the third notification obligation imposed on foreign
persons. Under this provision, any person who is a foreign stakeholder in an Australian media
company at the end of each financial year, must provide the following information to the
ACMA:
the person's name; and
the circumstances that resulted in the person being a foreign stakeholder in the
company at the end of the particular financial year; and
the person's company interests in the company at the end of the particular
year; and
the method used to determine those company interests; and
the reason why the person was a foreign person at the end of the financial
year; and
the designated information relating to the person; and
any other information relating to the person as specified in a legislative
instrument made by the ACMA under proposed subsection 74H(2).
Similar to the other notification obligations, the end of financial year holding notification
obligation is a civil penalty provision (proposed subsection 74H(3)) and also a designated
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infringement notice provision (proposed subsection 74H(5)). It will be a separate
contravention for each day that the person has failed to comply with the obligation (proposed
subsection 74H(4)).
Proposed subsection 74H(6) conserves the privilege against self-incrimination.
Proposed section 74J - Notification by a person who is a foreign stakeholder in an
Australian media company at the commencement of Division 10A
The fourth notification obligation is set out in proposed section 74J. This notification
obligation, unlike the other four obligations, is a non-recurring one. Rather, it only applies
during the first six months from the commencement of the new Division 10A. Under this
obligation, if a person is a foreign stakeholder in an Australian media company on the day
after the Bill has received the Royal Assent, within six months of that date (the initial
disclosure period), they must notify the ACMA in writing of certain information.
The required information is largely the same set of information that is required to report under
subsection 74J(1).
The information required to be reported under proposed subsection 74J(1) is:
the person's name; and
the circumstances that resulted in the person being a foreign stakeholder in the
company at the commencement of this Division; and
the person's company interests in the company at the commencement of
Division 10A; and
the method used to determine those company interests; and
the reason why the person was a foreign person at the commencement of this
Division; and
the designated information relating to the person; and
any other information relating to the person as specified in a legislative
instrument made by the ACMA under proposed subsection 74J(2).
If a foreign person has multiple interests of two and a half per cent or more in different
Australian media companies, the person would be required to report the abovementioned
information for each interest. However, it would be open to the person to collate each report
and serve the set of reports on the ACMA at the same time.
As with the other notification obligations, the initial disclosure period notification obligation
is a civil penalty provision (300 penalty units for a body corporate, and 60 penalty units for all
other persons) (proposed subsection 74J(3) and item 8) and also a designated infringement
notice provision (60 penalty units for a body corporate, and 10 penalty units for all other
entity types) (proposed subsection 74J(5) and item 10). Each day that the person has failed to
comply with the obligation will constitute a separate contravention (proposed subsection
74J(4)).
The privilege against self-incrimination is retained by proposed subsection 74J(6).
39
Proposed section 74K - Notification by a person who is a foreign stakeholder in an
Australian media company--requirement by the ACMA
The fifth and final notification obligation is set out in proposed subsection 74K(1). This
notification obligation is ongoing. If, at any time after the commencement of the new Division
10A, the ACMA requests information in writing from a foreign stakeholder in an Australian
media company, the foreign stakeholder must give the ACMA the following information:
the foreign stakeholder's company interests in the company; and
the method used to determine those company interests; and
any other information relating to the person as specified in a legislative
instrument made by the ACMA under proposed subsection 74K(2).
The range of circumstances in which the ACMA may make a request for information may
vary, and intentionally there are no preconditions imposed on the ACMA for the issuance of a
notice. For example, if there was media speculation about an impending takeover of an
Australian media company by a foreign person who already was known to have an interest in
the company of two and a half per cent or greater, the ACMA could give notice to such a
person, and the person would be obliged, subject to proposed subsection 74K(7), to provide
the requisite information in response.
If a foreign stakeholder is served with a notice by the ACMA for the purposes of the proposed
subsection 74K(1), the person must respond within the period specified in the notice. The
specified period cannot be less than 14 days after the notice is given. This guards against an
unreasonable response period being specified by the ACMA.
As with the other notification obligations, this ad hoc notification obligation is a civil penalty
provision (proposed subsection 74K(4)) and also a designated infringement notice provision
(proposed subsection 74K(6)). Each day that the person has failed to comply with the
obligation will constitute a separate contravention (proposed subsection 74K(5)).
Proposed section 74HA - Requirement for executors, administrators and liquidators to
give notification
If a natural person is required to give notice under subsection 74F(1), 74G(1), 74H (1), 74J(1)
or 74K(1) but dies before doing so, the executor or administrator of their estate must give the
notice (proposed subsection 74L(1)).
Similarly, if a corporation is required to give notice under subsection 74F(1), 74G(1),
74H (1), 74J(1) or 74K(1) but the corporation is wound up before doing so, the liquidator of
the company must give the notice (proposed subsection 74L(2)).
Proposed section 74M - Person may give the ACMA relevant information
In recognition of the multiple sources of information that can be used to populate the Register,
the proposed subsection 74J(1) permits a person to voluntarily give the ACMA information
that is relevant to the performance of the ACMA's functions under the new Division 10A. If a
person so chooses to give relevant information, to the extent that the information may consist
of, or include, personal information (within the meaning of the Privacy Act 1988), they would
be permitted to do so without being in breach of that Act. This is because proposed section
74J would represent an Australian law which authorises the disclosure of another's personal
information without their consent.
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Proposed Subdivision D--Miscellaneous
Proposed section 74N - Minister may direct the ACMA about the performance of its
functions or the exercise of its powers
Proposed subsection 74N(1) confers a broad power on the Minister to issue directions, either
of a general or specific nature, to the ACMA about the performance of the ACMA's
functions, or the exercise of its powers conferred on it by the new Division 10A (other than
proposed section 74U). This is intended to be a reserve power. The Minister will not be able
to direct the ACMA in respect of the statutory review the ACMA is required to undertake in
accordance with section 74U.
By operation of the proposed subsection 74N(2), the ACMA would be obliged to comply with
any ministerial direction given to it under the proposed subsection 74N(1).
Proposed section 74P - Service of summons, process or notice on corporations
incorporated outside Australia
Proposed section 74P is a deeming provision setting out the circumstances in which certain
summons, processes or notices under or in connection with the new Division 10A will be
taken to have been served on, or given to, an overseas body corporate. Proposed subsections
74P(1) and (2) have the effect of providing that where the body corporate incorporated
outside of Australia does not have a registered or principal office in Australia but has an agent
in Australia, then a summons, process or notice will be deemed to have been served or given
where it is served on or given to the body corporate's agent in Australia.
Proposed section 74P provides more scope for the ACMA to take action in relation to the
failure to give notification where the relevant foreign person is incorporated outside of
Australia.
Section 28A of the Acts Interpretation Act 1901 deals with the service of documents. It
provides that a document may be served on a person by sending it by prepaid post to the
person's residential address last known to the person who was serving the document.
Proposed subsection 74P(3) clarifies that subsection (2) does not override section 28A and
instead, operates in addition to that provision.
Proposed section 74Q - Extra territorial application
Proposes section 74Q provides that the new Division 10A extends to acts, omissions, matters
and things outside Australia. This means that the new provisions relating to the Register as set
out in Division 10A will operate both within and outside of Australia.
Proposed section 74R - Annual report
The ACMA will be required, after the end of each financial year, to prepare a report about the
company interests in Australian media companies that were held by foreign stakeholders at
the end of that financial year, and give the report to the Minister (proposed subsection
74R(1)).
Whilst it is expected that the report will predominantly be factual in nature, it will be open to
the ACMA to include in the report its observations about trends relating to the company
interests in Australian media companies that are held by foreign stakeholders (proposed
subsection 74R(2)). The information contained in the report will inform the Government and
41
assist with future public policy development in respect of regulating foreign interests in
Australian media assets.
The Minister may choose to have the report published on the Department's website (proposed
subsection 74R(3)).
Proposed section 74S - Part 13 not limited
Proposed section 74S is included for the avoidance of doubt, to make clear that nothing in
Division 10A limits the operation of Part 13 of the BSA. That part confers certain
investigative powers on the ACMA. The ACMA will be able to rely upon its Part 13 powers
to collect information relevant to its powers and functions under the new proposed Division
10A.
Proposed section 74T - Liability for damages
To guard against the risk of the ACMA (or its officers) and the Commonwealth being sued in
relation to acts or omissions done or omitted to be done good faith by the ACMA (and its
officers) in the performance or exercise of the new Register-administration powers, proposed
section 74T confers a broad and appropriate immunity to the Commonwealth, the ACMA or
an ACMA official from any legal action or other proceeding for damages for, or in relation to
the act or omission. By operation of this provision, by way of example, the ACMA could not
be sued for any error in the published information.
The provision is modelled on subsection 68(6) of the Interactive Gambling Act 2001.
The ACMA is expected to undertake all reasonable efforts to ensure the accuracy of the
information on the Register.
Proposed section 74U
New subsection 74U requires the ACMA to conduct a review of the operation of:
new Division 10A (proposed subparagraph 74U(1)(a)(i)); and
the remaining provisions of the BSA to the extent they are related to new
Division 10A (proposed subparagraph 74U(1)(a)(ii)).
The review also needs to consider if any amendments should be made to new Division 10A or
the remaining provisions of the BSA to the extent to which they relate to the new Division
(proposed subparagraphs 74U(1)(a)(iii) and (iv)).
In terms of timing, the review needs to be conducted as soon as practicable after the end of
the 3-year period that began at the end of the 'initial disclosure period'.
A report of the review must be prepared by the ACMA (proposed subsection 74U(2)) and
given to the Minister (proposed subsection 74U(3)).
The Minister must ensure that copies of the report are tabled in each House of the Parliament
within 15 sittings days of that House after the completion of the preparation of the report
(refer new subsection 74U(4)).
The intent of this statutory review is to provide clear direction on the ongoing utility of the
Register. As the ACMA will be administering the Register, and is an independent statutory
42
authority, it is best placed to conduct such a review. It is expected that by the time the review
is required to be undertaken, the ACMA would have experience in administering the Register
and be in a position to provide recommendation on how it can be simplified and streamlined.
Item 6 - Subsection 205F(4)
Item 7 - Subsection 205F(5)
Item 8 - After subsection 205F(5)
The Bill ensures that regulatory action can be taken in response to contravention of the
disclosure obligations.
The amounts of penalty units that have been specified for the civil offence provisions (under
proposed subsection 205F(5)) have been set at an appropriate level to act as a deterrent and
provide a clear and real disincentive for non-compliance. However, in framing the offence
provisions, proportionality between the seriousness of the contravention and the quantum of
the penalty has been sought. The amounts of penalty units contemplate the cost of court
proceedings, and would justify the need to go to court.
Items 6 to 8 would amend section 205F of the BSA to provide for the maximum pecuniary
penalties payable by a person who contravenes the new notification obligations under
proposed subsections 74F(1), 74G(1), 74H(1), 74J(1), and 74K(1).
Subsections 205F(4) and (5) of the BSA provide for the maximum pecuniary penalty for the
contravention of civil penalty provisions under that Act, which is tied to the corresponding
criminal offence provision. As there is no offence provision that corresponds with the new
proposed subsections, item 8 would insert a new subsection, namely proposed subsection
205F(5AA), into section 205F to provide directly for the maximum penalties for
contraventions and ancillary contraventions of the new foreign stakeholder notification civil
penalty provisions. Items 6 and 7 make consequential amendments to the existing penalty
arrangements to carve out proposed subsections 74F(1), 74G(1), 74H(1), 74J(1), and 74K(1).
The maximum penalty for a body corporate is 300 penalty units, and the maximum for other
persons is 60 penalty units.
Item 9 - Section 205ZA
Item 10 - At the end of section 205ZA
Item 9 makes a minor consequential change as a result of the insertion of additional
subsection into section 205ZA of the BSA by item 10.
Item 10 inserts two new subsections into section 205A. Proposed subsection 205ZA would
specify that the penalty amount to be specified in an infringement notice given to a person
relates to subsection 74F(1), 74G(1), 74H(1), 74J(1) or 74K(1) must be a pecuniary penalty
equal to:
if the person is a body corporate--60 penalty units; or
in any other case--10 penalty units.
The proposed amounts payable under an infringement notice (under proposed subsection
205ZA(3)) is consistent with the maximum that is generally recommended in the Guide to
Framing Commonwealth Offences, Infringement Notices and Enforcement powers (which is
one fifth of the maximum penalty that a court could impose on a person, but not more than
43
12 penalty units for an individual, and not more than 60 penalty units in the case of a body
corporate).
44
SCHEDULE 2-- COMMUNITY RADIO
Broadcasting Services Act 1992
Item 1 - After paragraph 84(2)(b)
Section 84 of the BSA deals with the allocation of community broadcasting licences for
television, analogue radio and digital radio. Subsection 84(1) enables the Minister to give
directions to the ACMA to give priority to a particular community interest in allocating
community licences.
Subsection 84(2) lists a number of matters to which the ACMA is to have regard in deciding
whether to allocate a community broadcasting licence to an applicant or one of a group of
applicants. The matters listed include the extent to which the proposed service or services
would meet the existing and perceived future needs of the community within the licence area
of the proposed licence; the nature and diversity of the interests of that community; and the
nature and diversity of other broadcasting services (including national broadcasting services)
available within that licence area. Item 1 would insert a new paragraph 84(2)(ba) into
subsection 84(2). The effect of this change would be to add a new matter that the ACMA is to
consider when deciding to allocate a community radio broadcasting licence to an applicant or
one of a group of applicants. The new criterion is the extent to which the proposed service or
services would provide material of 'local significance'. The term 'local significance' would
be defined in new subsection 84(3).
The new criterion in paragraph 84(2)(ba) will also be relevant to the ACMA's decisions on
the renewal of community radio broadcasting licences. Section 91(2A) enables the ACMA to
refuse to renew a community licence if, having regard to the matters in paragraphs 84(2)(a) to
(f), it considers that it would not allocate such a licence if it were deciding whether to allocate
the licence to the licensee.
The new assessment criterion would not apply to applications for temporary community
broadcasting licences (refer section 79A of the BSA, which specifies that Part 6 of the BSA
does not apply in relation to such temporary licences).
Item 2 - At the end of section 84
Item 2 would insert a new subsection 84(3) to provide that, for the purposes of paragraph
84(2)(ba), material would be of 'local significance' if it is hosted in; or produced in; or relates
to, the licence area of the proposed licence.
The meaning of 'relates to' the licence area is not defined, in order to provide the ACMA with
flexibility to adapt it over time as appropriate in the community radio context. Material could
relate to the licence area if, for example, it relates to a person, community organisation or
event in the licence area. Material could also relate to the licence area if it relates to a social,
economic, political or cultural issue as it affects the licence area (either in the sense of the
geographic area or a community within the licence area).
Item 3 - Application of amendments
Item 3 of Schedule 1 to the Bill sets out two application provisions. The effect of these
application provisions is that the new local significance criterion would not apply to
applications for a new or renewed community radio broadcasting licence which are currently
on foot.
45
Allocation
Under section 80, when the ACMA advertises that they are going to allocate community
broadcasting licences, the ACMA is required to include the due date for applications.
Subitem 3(1) would provide that new paragraph 84(2)(ba) (to be inserted by item 1 of this
Schedule), applies only to applications for a new community radio broadcasting licence made
in response to an advertisement that is published under section 80 of the BSA after the
commencement of this item. The effect of this application provision is that ACMA would not
be required to consider the new local significance criterion in respect of applications for a new
community radio broadcasting licence if the application is made following a section 80
advertisement published before the Bill comes into effect.
Renewal
Under subsection 90(1), the ACMA may renew a community broadcasting licence if the
licensee makes a written application in accordance with the form approved in writing by the
ACMA. Under subsection 90(1A) of the BSA, the application for renewal must be made no
earlier than one year before the licence is due to expire, and no later than 26 weeks before
expiry or an earlier time notified in writing to the licensee by the ACMA.
Subitem 3(2) of Schedule 2 to the Bill provides that the new criterion under proposed
paragraph 84(2)(ba) would only apply to applications for renewal of the licence where the
application was made under section 90 of that Act after the commencement of this item.
It is expected that, if the ACMA is to update application forms to take into account the new
material of local significance criterion, these will be ready in advance of the amendments
commencing.
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