Turnbull government wants power to make internet companies do 'things' for national security
The Turnbull government is aiming to pass controversial new laws by 2016 that will give Attorney-General Senator George Brandis unprecedented powers to make phone and internet companies do unspecified "things" if he believes they are hindering national security.
Senator Brandis and Communications Minister Mitch Fifield on Friday afternoon released the second draft of the Telecommunications Sector Security Reforms (TSSR) Amendment Bill, which is designed to stop spies and criminals from using equipment and services to hack into telecommunications network.
But industry sources are worried the bill also gives sweeping and unspecified powers to the Attorney-General to force phone and internet providers such as Telstra and Optus to do whatever the government of the day wants.
"The Attorney-General will be provided with an additional directions power to direct a [telco] to do or not do a specified thing," the bill's explanatory memorandum says. "The types of things the Attorney-General can direct a [telco] to do or not do are not specified or limited, with the exception of the limitation imposed in section 313B.
"Section 315B provides the Attorney-General with the option to give a written direction requiring a [telco] to do, or refrain from doing, a specified act or thing within the period specified in the direction."
Under the current laws, the Attorney-General can already shut down any service that causes or helps acts that hurt Australia's national security.
But the new overarching laws add more layers of nuance to the off-switch, potentially affecting everything from the equipment being bought by telcos to the executives they hire and everything in-between.
This means Telstra could be ordered to stop buying network equipment from certain Israeli or Chinese vendors if ASIO, with the support of the Attorney-General, decided they were potential security threats. Companies failing to obey would face fines of up to $10 million.
The original version of the bill raised the ire of telcos who warned that stopping vendors from certain countries could limit the pool of potential suppliers and jack up the price of equipment.
As first revealed by Fairfax Media in July, tech and telco giants alike united against the bill, which they described as "regulatory over-reach".
But the bill does come with fresh safeguards, which the government believes will prevent any abuse of power.
The Attorney-General will have to speak with the Communications Minister and negotiate with the telco affected before going ahead with the action. They will also have to work out the potential financial cost of the actions and face the potential of merit reviews.
"The intention is that government agencies and [telcos] continue to operate in the current environment of co-operative engagement," it says. "If national security outcomes cannot be achieved on a co-operative basis, the Attorney-General can consider requiring compliance through the issue of a formal direction."
Move could raise costsThe government recognises that its moves could raise the cost of doing business and go against the duty of publicly listed companies to do the best thing for their shareholders.
"Fiduciary duties to shareholders can operate as a disincentive to invest in security measures for the purpose of protecting national security interests," it says. "For these reasons, a company board may prefer a clear mandate to govern its decision making."
The Communications Alliance is the telecommunications industry's peak body and its chief executive John Stanton told Fairfax Media that his members were "still digesting" the revised draft bill.
"The amendments that have been made to the draft bill are reflective of the concerns that Communications Alliance and other stakeholders expressed about the original draft, and certainly represent a more balanced approach to meeting the objectives outlined by government," he says.
"Communications Alliance and our members will work through the detail and look forward to engaging with government and the Parliamentary Joint Committee of Intelligence and Security to make any further necessary refinements to the legislation."
Submissions on the proposed bill are being accepted until January 18, 2016.
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Livio S. Nespoli has been a broker, registered investment advisor, and financial publisher since 1985.