Foreign influence laws survive free-speech challenge but doubt is cast on the implied freedom

The High Court of Australia has rejected a free-speech challenge to the Commonwealth’s Foreign Influence Transparency Scheme Act 2018 (FITS Act).  

In LibertyWorks Inc v Commonwealth of Australia, the Court held that the implied freedom of political communication was not impermissibly infringed by a requirement to register before undertaking communication activities on behalf of a foreign entity (registration requirement).

In a previous Insight, we explained the implied freedom and how, according to LibertyWorks, it was undermined by the registration requirement.

In short, the Court has recognised that Australia’s system of representative and responsible government carries with it the freedom to communicate on political and governmental matters.[1] 

In most cases that come before the Court, it is uncontroversial that freedom to communicate has been restricted by a law. It is also common that such a law has a legitimate purpose that is not inimical to Australia’s democratic system. The point of contention is whether the law is ‘reasonably appropriate and adapted’ to achieve its purpose, or whether it goes too far.

The FITS Act

The FITS Act establishes a registration scheme for individuals and entities that undertake ‘registrable activities’ on behalf of foreign entities, or enter into arrangements to do so. Registrants provide information to the Secretary of the Attorney-General’s Department, who then publishes online:

• the name of the registrant and their foreign principal;
  
  
• a description of the kind of registrable activities the registrant undertakes on behalf of that foreign principal; and
  
  
• any other information prescribed by the Foreign Influence Transparency Scheme Rules.

Under the FITS Act, ‘registerable activities’ includes parliamentary lobbying on behalf of foreign governments and activities in Australia for the purpose of political or governmental influence, including general political lobbying, communications activity and disbursement activity. There are criminal penalties for failing to register when required, providing false or misleading information, and destroying records.

LibertyWorks

The High Court has long debated the approach to determining whether a law is ‘reasonably appropriate and adapted’. The decision in LibertyWorks shows that a majority of the Court will use a structured proportionality test in implied freedom cases, including the Court’s newest justices, Steward and Gleeson JJ. The structured proportionality test requires assessing whether the law is suitable, reasonably necessary, and adequate in the balance.

The majority 

The majority (Kiefel CJ, Keane, Gleeson JJ) found that, while the registration requirement burdened free speech, it was enacted to fulfil a legitimate purpose. That purpose was to create transparency in order to prevent or minimise the risk that foreign entities will undermine the integrity of Australia's political or electoral processes.  

Using the structured proportionality test, the majority found that the restriction was appropriate and adapted to the fulfilment of that transparency purpose. 

The majority noted that foreign entities may ordinarily participate in political and government debate or communicate to the Australian public without registering, and the FITS Act only requires registration when using an intermediary because an intermediary may disguise the involvement of the foreign entity.

Dissents

In separate dissents, Justices Gageler and Gordon found that the registration requirement infringed the implied freedom and was invalid.  Both Justices have previously laid out critiques of the structured proportionality test, and in LibertyWorks continued to apply their preferred alternatives.  

The previous critiques of structured proportionality given by the Justices include that it fails to adequately deal with differences in the subject-matter of laws and the extent of the burden on the implied freedom,[2] and that it is too rigid[3] and prescriptive.[4]

The FITS Act requires a registrant to provide information, some of which is made public and some of which is not, whereas its apparent purpose is to increase the transparency of influence on public debate. 

Justice Gageler observed that registration information that was not made public could not improve transparency.  

By requiring that information to be provided but not published, the Act “… burdens political communication … to a substantially greater extent than is necessary to achieve the sole identified legislative object of improving the transparency of that communication”.  

Similarly, Gordon J found that there was no rational connection “between the non-public information stored on the register and the purpose of the FITS Act”.

Concurrence

In contrast, Edelman J, concurring with the majority in the result, found the non-public information to be a necessary part of the administrative process required to prepare the public disclosure.  

His Honour said that “for the website to serve its intended function as a clear and transparent repository of information, it cannot simply be the site of an information dump”.  

The majority did not address the distinction between public and non-public information at length but saw the non-public register as supportive of processes that had a legitimate purpose.

Justice Edelman agreed with the majority that the FITS Act had a legitimate purpose, and endorsed the structured proportionality approach. His Honour explained that, in contrast to other approaches, “structured proportionality analysis provides a transparent manner in which to determine whether a law which burdens political communication for some legitimate purpose” is reasonably appropriate and adapted.   

His Honour also rebutted the critique that structured proportionality is too rigid. His view was that each test has enough flexibility to deal with the reasons for which a law ought to be valid or invalid. 

Doubt cast on the implied freedom

In a surprise to most observers, Steward J effectively called for the implied freedom to no longer be recognised by the Court. His Honour said that the freedom “may not be sufficiently supported by the text, structure and context of the Constitution”. 

In doing so, Steward J drew on judicial and academic critiques that the finding of an implied freedom is not consistent with the interpretive concepts, rules and principles that govern legal reasoning in Australia. His Honour also argued that the continued division of the High Court over the application of structured proportionality in implied freedom cases “may justify a reconsideration of the implication itself”.

However, his Honour considered himself bound to assume that the freedom existed because neither party had argued to the contrary. He did invite challenge on that point in a future case.   

Justice Steward largely agreed with the majority but said that he might have found the registration requirement on a person who is “under an arrangement with” a foreign entity to be an impermissible burden on the freedom, if it had been raised by LibertyWorks.

That was because the definition of an ‘arrangement’ in the FITS Act is broad and “arguably extends to occasions when a person does not in fact act for another, but instead wholly for themselves”.  

His Honour said that the breadth of the registration requirement as engaged by the definition of ‘arrangement’ may not be adequate in the balance because it may create a burden that is manifestly excessive compared to the demands of the purpose of the FITS Act.

Implications

While it is highly unlikely that the current Court will abandon the implied freedom, Steward J’s judgement raises important questions for the way in which rights and obligations may properly be implied from the Constitution.  

It also reinforces the Court’s longstanding reluctance to identify new rights and freedoms, and has re-enlivened calls for the legislature to enact a bill of rights. The decision of the High Court in LibertyWorks is a reminder to organisations in the political sphere that they must comply with the FITS Act.

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