The 'democratic deficit' in Australian law-making

In an unusual move, the parliamentary committee tasked with reporting on all treaties entered into by the Australian executive has recommended that the government delay ratifying the troubled Anti-Counterfeiting Trade Agreement ('ACTA'). The 'Joint Standing Committee on Treaties' or 'JSCOT' has almost always made recommendations in line with government policy. With ACTA however, JSCOT has asked that the government wait until:JSCOT receives and considers independent analysis of the agreement's economic impact for Australia; the Australian Law Reform Commission completes its inquiry into copyright law; and the government issues notices of clarification in relation to several terms of the agreement.

ACTA has attracted heavy criticism and faced similar setbacks internationally.All five parliamentary committees in the EU have recommended against ratification. Thousands of citizens across Europe protested the agreement in February and again in June, and several politicians involved in its negotiation resignedorapologised for signing the agreement.

What is ACTA?

ACTA is a plurilateral agreement with the stated purpose of providing an international framework for the better enforcement of intellectual property rights, to combat the 'high levels of commercial-scale trade in counterfeit and pirated goods worldwide'. It was negotiated amongst 11 parties including Australia, the US and the nations of the EU. Although primarily negotiated in secret as a trade agreement, several versions were leaked throughout the three-year long process. The first official text was published on April 2010. ACTA was signed in October 2011 by eight countries including Australia and the US.

Despite the title of the agreement, ACTA is not actually a trade agreement, nor it is solely about counterfeit goods. Although negotiated in secret as trade agreements historically have been, ACTA does not seek to promote or facilitate trade. As the JSCOT report concluded, it is actually an IP agreement; despite its purpose of combating 'counterfeit and pirated goods' (often associated with goods that infringe trademarks or copyrights), ACTA has terms applying to all 'intellectual property' (which includes patents, industrial designs and geographical indicators).

What would ACTA actually do?

There has been a lot of confusion over ACTA's possible legal effects. Its defenders insist it merely imposes 'minimum standards' of enforcement while allowing countries to adopt higher standards should it choose to do so; and that it would not require the changes of any laws in the EU, US or Australia.

The Australian Government's assertion that it would not require any change to our laws is questionable, as the JSCOT report noted. The agreement establishes an 'ACTA Committee', comprised of ACTA members, who would be tasked with developing 'best practice guidelines' for the implementation of ACTA's obligations. Where the language of ACTA is vague this committee could influence its interpretation. For example, where article 27.1 requires 'effective action' against infringement in the digital environment, other countries' interpretations of what is 'best practice' may require laws more stringent than that currently adopted in Australia to be implemented.

Similarly unclear is what economic benefits ACTA could have for Australia. JSCOT was heavily critical of the lack of evidence detailing what the actual economic impact of counterfeiting and IP infringement is. In addition the Australian Government has failed to provide any economic evidence of what benefits ACTA will have. As Australia is a net importer of IP goods (such as patented and copyright-protected products), any extensions of IP rights increase the costs of this importation. Thus the Australia-United States Free Trade Agreement ('AUSFTA') which came into force in 2005 and required an increase in our IP standards actually generated a net cost for Australia. Since then the Productivity Commission has recommended that negotiation in relation to IP laws be informed by a robust economic analysis of the size and distribution of the resultant benefits and costs. It may be hard to calculate the political and economic benefits of entering into treaties with the US and other countries. However, as the JSCOT report noted, the Department of Foreign Affairs and Trade failed to include any economic assessment of its possible benefits.

The 'most troubling' aspect of ACTA: its lack of transparency

Although the possible effects ACTA may have are continuing cause for concern, most outrage is directed at the process by which it was negotiated. As the JSCOT report concluded, 'the most troubling aspect throughout the development of ACTA has been the opaque nature of the process'.

All negotiating members of ACTA were bound by a confidentiality agreement that precluded disclosure of the text. DFAT has insisted that it sought consultations and advice from many stakeholders and all government agencies which were involved. However public consultations held until April 2010 were conducted without any public access to the draft text or negotiating documents. Instead stakeholders were forced to rely on DFAT's 'discussion paper' of the broad goals of ACTA. As JSCOT's report concluded, this restraint prevented any meaningful discussion about the issues that ACTA could pose.

The lack of transparency during ACTA's negotiation process was compounded by the current 'democratic deficit' in Australian treaty-making. Under our Constitution, the power to enter into all treaties remains exclusively with the executive. It is only after treaties are negotiated and signed, that the text is tabled in Parliament for 15 days prior to binding action being taken. JSCOT is empowered to report on the text – but cannot effect a change of the text of the agreement, or prevent the executive from binding Australia to the agreement.

Although the executive can bind Australia as a matter of international law, for such treaties to have domestic effect they must be implemented through domestic legislation. However once an obligation is assumed internationally, parliament is often pressured into implementing these obligations. For example, an attempt by parliament to deviate from the text of AUSFTA in one area led to accusations by the executive that this would damage Australia's relations with the US and its economic future.

Today international law, which regulates intellectual property, education, science, and transportation, is comparable to domestic law in its national importance. However by entering into international 'trade agreements' on these topics the executive bypasses the democratic processes of Parliament but still effects change to our laws. In contrast, where the executive is given statutory authority to make domestic regulations, each House of Parliament has the power to disallow these regulations for a set number of days after its introduction. A comparable power should be given to Parliament to disallow international agreements made by the executive. Alternatively, parliamentary committees such as JSCOT should at least have the power to inquire into the agreement and report to Parliament before the agreement is signed.

The cost of such reforms could be to slow down the process of treaty-making and limit the power of the executive to act decisively in the national interest. However, parliamentary agreement to treaties such as these would not be a time-consuming process, as they would not require detailed scrutiny on each separate occasion. It would primarily be treaties of major social, political or economic importance that would occupy parliamentary time, and, it is precisely these kinds of commitments that should be considered by parliament.

In any event, these are costs that arise equally in other forms of parliamentary law-making, where it is accepted that the power of the executive to make important national decisions should be the subject of parliamentary oversight.

Conclusion

The public outcry over ACTA and its lack of transparency should not be lightly dismissed – there is something profoundly unsatisfactory about an executive arm of government secretly negotiating treaties that will directly impact domestic law, without parliamentary oversight or meaningful public involvement.

Given the public outcry, JSCOT's findings and the lack of economic evidence to support such agreements, it may appear obvious that Australia should refrain from entering such agreements. However, Australia is currently again in confidential negotiations over the proposed Trans-Pacific Partnership. A leaked US draft proposal for the IP chapter of this agreement has demonstrated that the US is seeking to 'export' whole sections of its detailed domestic laws.

Our treaty-making processes must be reformed if this agreement to fare any better than ACTA.