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2016 - 2017
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
SECURITY OF CRITICAL INFRASTRUCTURE (CONSEQUENTIAL AND
TRANSITIONAL PROVISIONS) BILL 2017
EXPLANATORY MEMORANDUM
(Circulated by authority of the
Attorney-General, Senator the Honourable George Brandis QC)
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SECURITY OF CRITICAL INFRASTRUCTURE (CONSEQUENTIAL AND
TRANSITIONAL PROVISIONS) BILL 2017
GENERAL OUTLINE
1. The Security of Critical Infrastructure (Consequential and Transitional Provisions) Bill 2017
amends the Australian Security Intelligence Organisation Act 1979 (ASIO Act) and the Foreign
Acquisitions and Takeovers Act 1975 (FATA Act) to reflect the proposed operation of the Security of
Critical Infrastructure Bill 2017.
2. The Security of Critical Infrastructure Bill is designed to strengthen the Government's
capacity to manage the national security risks of espionage, sabotage and coercion arising from
foreign involvement in Australia's critical infrastructure.
3. Effective and efficient information sharing between Commonwealth entities is important to
the success of a coordinated approach to managing national security risks. The Foreign Investment
Review Board process is an existing mechanism through which the Government can implement
mitigations to address national security risks arising from proposed transactions. Ensuring that
Australia's national security agencies have appropriate access to this information is key to a
comprehensive consideration of national security risks.
4. The Security of Critical Infrastructure Bill introduces two regulatory measures:
a critical infrastructure asset register to capture and track information about who
owns and operates Australia's most critical assets in the high-risk sectors, and
a Ministerial directions power for the Minister to seek information and issue
directions to owners and operators of critical assets in the high-risk sectors when a
there is a risk that is prejudicial to security that cannot otherwise be mitigated.
Clause 1 - Short title
5. This clause provides for the short title of the Bill, if enacted, to be the Security of Critical
Infrastructure (Consequential and Transitional Provisions) Act 2017.
Clause 2 - Commencement
6. This clause provides that Schedule 1 of this Bill will come into effect immediately after the
commencement of clause 32 of the Security of Critical Infrastructure Bill. The whole of the Security
of Critical Infrastructure Bill comes into effect at the date of Proclamation or, if Proclamation does
not occur within three months after the Bill receives Royal Assent, then the Bill will commence the
day after three months from Royal Assent. Proclamations, which are made by the Governor-General,
are the preferred method for providing discretion to fix a commencement date for a Bill.
7. This clause also provides that Schedule 2 of this Bill will commence the day after it receives
the Royal Assent.
Clause 3 - Schedules
8. This clause provides that upon enactment of this Bill an Act that is specified in the Schedules
is amended or repealed as set out in that Schedule. This provision sets out the purpose of the Bill,
which is to make amendments to other Commonwealth legislation to reflect the proposed operation
of the Security of Critical Infrastructure Bill.
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Schedule 1--Amendments consequential on the Security of Critical
Infrastructure Act 2017
9. This Schedule details the amendments that will need to be made to the ASIO Act and the
FATA Act upon enactment of the Security of Critical Infrastructure Bill.
Amendments to the Australian Security Intelligence Organisation Act 1979
Item 1 - Subsection 35(1) (after paragraph (d) of the definition of prescribed
administrative action)
10. This item inserts a provision into the definition of 'prescribed administrative action' in
subsection 35(1) of the ASIO Act, so that an exercise of power under subclause 32(2) of the Security
of Critical Infrastructure Bill will be 'prescribed administration action'. Subsection 35(1) of the
ASIO Act is the interpretation provision for ASIO security assessments. 'Prescribed administrative
action' specifically relates to ASIO's 'adverse security assessments', which are assessments that
provide an opinion or advice in relation to a person, and recommends that prescribed administrative
action be taken in respect of the person.
11. This amendment will enable ASIO to provide advice to inform the exercise of the Ministerial
directions power, under subclause 32(2) of the Security of Critical Infrastructure Bill, in the form of a
security assessment. Subclause 32(2) of the Security of Critical Infrastructure Bill allows the Minister
to direct critical infrastructure owners or operators to do or not do a certain thing to mitigate a risk
that has been identified as prejudicial to security. Subclause 32(3)(c) of the Security of Critical
Infrastructure Bill provides that the Minister must not give the direction unless 'an adverse security
assessment in respect of the entity has been given to the Minister for the purposes of this section'. A
direction would be based on addressing a security risk as set out in an ASIO adverse security
assessment.
Amendments to the Foreign Acquisitions and Takeovers Act 1975
Item 2 - After paragraph 122(1)(o)
12. This item inserts the Security of Critical Infrastructure Act (once commenced) into
subsection 122(1) of the FATA Act, so that a person may disclose protected information (as defined
in the FATA Act) to the Minister, or the accountable authority of the responsible Commonwealth
entity, administering the Security of Critical Infrastructure Bill, for the purpose of administering that
Bill. The accountable authority of the responsible Commonwealth entity would be the Secretary of
the Department responsible for the administration of the Security of Critical Infrastructure Bill.
13. This amendment ensures effective and efficient information sharing between the
administrator of the Security of Critical Infrastructure Bill and the department with portfolio
responsibility for foreign investment in Australia. Protected information obtained under the FATA
Act would allow the administrating agency to verify the accuracy of the Register of critical
infrastructure assets. To verify information, the administrating agency will be able to compare
information from reporting entities to data that the department with portfolio responsibility for
foreign investment in Australia may receive as part of the Foreign Investment Review Board
approval process. The Register of critical infrastructure assets provides Government with greater
visibility of who owns, controls and has access to Australia's critical infrastructure assets.
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Item 3 - At the end of subsections 122(2) and (3)
14. This item inserts national security into subsections 122(2) and 122(3) of the FATA Act, so
that a person may disclose protected information to a Minister, or Secretary of a Department
administered by that Minister, who is responsible for national security, but only for the purpose of
discharging that responsibility.
15. This amendment ensures effective and efficient information sharing between national security
agencies and the department with portfolio responsibility for foreign investment in Australia for the
purpose of assessing and mitigating national security risks. Sharing of specific foreign investment
data and analysis ensures that national security agencies can draw on existing data sets, which they
require to identify, assess and mitigate national security risks. These data sets complement
information that the administering agency will receive from the Register of critical infrastructure
assets. The inclusion of national security will make the information protections in the FATA
consistent with the use and disclosure protections in Division 3 of the Security of Critical
Infrastructure Bill.
Schedule 2 - Other amendments
16. This Schedule details additional amendments to the Foreign Acquisitions and Takeovers Act
1975 (FATA Act) upon enactment of the Bill.
Amendments to the Foreign Acquisitions and Takeovers Act 1975
Item 1 - After paragraph 122(1)(g)
17. This item inserts the Defence Act 1903 into subsection 122(1) of the FATA Act, so that a
person may disclose protected information (as defined in the FATA Act) to the Minister for Defence,
or the Secretary of the Department of Defence, for the purpose of administering the Defence Act.
18. This amendment provides clarity that a purpose arising from the Defence Act is an
appropriate purpose for disclosing protected information under the FATA Act. This amendment
ensures effective and efficient information sharing between the department with portfolio
responsibility for foreign investment in Australia and national security agencies, but particularly for
defence purposes. Protected information obtained under the FATA Act would allow national security
agencies to consider foreign investment information, for the purpose of assessing national security
risks.
Item 2 - At the end of subsections 122(2) and (3)
19. This item inserts defence into subsections 122(2) and 122(3) of the FATA Act, so that a
person may disclose protected information to a Minister, or Secretary of a Department administered
by that Minister, who is responsible for defence, but only for the purpose of discharging that
responsibility.
20. This amendment also provides clarity that a defence purpose is an appropriate purpose for
disclosing protected information under the FATA Act. This amendment ensures effective and
efficient information sharing between national security agencies and the department with portfolio
responsibility for foreign investment in Australia for the purpose of assessing and mitigating national
security risks, but particularly for defence purposes.
21. The inclusion of defence will make the information protections in the FATA consistent with
the use and disclosure protections in Division 3 of the Security of Critical Infrastructure Bill.
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