The Foreign Investment Review Board (FIRB) has operated under a veil of secrecy since it was established in 1975, with its deliberations kept from public view, distorting markets and benefitting multinationals. That secret vault has just been cracked open. Transparency Warrior Rex Patrick reports.
The Foreign Investment Review Board (FIRB) was established in 1975 to advise the Treasurer on foreign investment matters. It is a non-statutory body that examines certain proposed investments subject to the Foreign Acquisition and Takeover Act 1975 (FATA) to determine whether they would be in the national interest.
The FIRB makes recommendations to the Treasurer, although some less important decisions are delegated to senior FIRB officers. Some applications are also decided by other Treasury portfolio ministers.
The Act permits the Treasurer to impose conditions on an investment, but the conditions can only be imposed if required to ensure the investment is not contrary to Australia’s national interest.
Of the 1,310 commercial applications (worth $171.5B) that were approved in 2022/23, 760 of those ($131.6B) were approved with conditions attached.
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No sunlight, please
In a report of the 2019 to 2021 Senate inquiry into foreign investment, the Economics Committee observed in its report:
In comparison to foreign investment regimes elsewhere, Australia’s foreign investment regime is secretive.
The FATA Act defines a class of “protected information” as information obtained under, in accordance with or for the purposes of this Act. That is, information that is supplied to it externally from government (e.g. information from the prospective foreign buyer) is to be secret.
But FIRB has taken that secrecy inch and tried to turn it into a secrecy mile.
Again, the Senate observed, “This (protected information) definition is taken by Treasury officials to cover all information on foreign investment proposals, conditions and compliance, beyond the anonymised statistical reporting of the Foreign Investment Review Board (FIRB).”
And if an Australian citizen wants to peer into the process, the FIRB threatens to use taxpayer’s money against them to defend its secrecy in the courts. Noting the test for foreign acquisition is national interest, FIRB’s insistence on functioning in total secrecy is quite incredible.
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Treasury’s loss
In 2020, I thought I’d take on this most unreasonable secrecy.
Imagine the idea that officials get to decide on whether something is in the national interest, but for that decision-making process to be above and beyond any scrutiny. How odd!
In May 2020, I requested access to the documents comprising the full decision and conditions imposed by the then Treasurer in relation to the approval for China Mengniu Dairy Company Limited to acquire baby food company Bellamy’s Australia Ltd.
Treasury refused outright, but after a long delay has had their decision overturned. At the objection of Treasury and the new owners of Bellamy’s, the FOI Commissioner, Toni Pirani, has granted full access to the Treasurer’s decision (and conditions) letter.
This precedent opens up the public’s access to foreign investment decisions of all Treasurers and their delegates. It’s a significant transparency victory.
FOI Commissioner succumbs
In addition to the Treasurer’s decision letter, another document fell within the scope of my request: the FIRB’s decision minutes provided to the Treasurer.
This is an important document because it would contain the national interest analysis associated with the acquisition. This is the nuts-and-bolts document that most deserves scrutiny. The FOI Commissioner only granted partial access to this, however.
The FOI Commissioner found, as a matter of fact, that the FIRB decision minute was not ‘obtained’ by the FIRB, rather it was generated by them and as such was not “protected information’.
She found that it comprised of analysis, advice and recommendations provided by the Department to the then Treasurer to assist him in his consideration of the China Mengniu Dairy Company’s application, and went on to determine that “some of the analysis and advice includes information obtained by the Department from various sources (including information provided by [China Mengniu Dairy Company] as part of their application) that are not publicly available”.
To the extent that that information came from third parties, it should properly be withheld from the public.
FIRB Processing and Information Status
Legal error
The FOI Commissioner fell into legal error. She somehow found that releasing information (analysis, advice and recommendations) generated by FIRB would cause harm because the Parliament had somehow placed a ‘secrecy aroma’ around the process when it made information obtained from a company secret.
In doing so, she betrayed her role as the FOI guardian. The FATA Act goes no further than classifying information received from outside government as secret. That does not mean that the Parliament meant anything more than that, and she was wrong to conclude that.
Treasury doesn’t want their operations to be ‘infected’ with transparency and scrutiny, and the FOI Commissioner seems content with that proposition. Her own transparency failure will have to be dealt with separately.
Transparency fight to continue
Thus far the Albanese Government has spent a million dollars losing to me in transparency fights.
Noting the obstructive nature of the FIRB in protecting the secrecy of its operations – secrecy for the sake of it – I’m expecting an appeal will be lodged.
FIRB arrogantly have no desire to allow the public to see how well or poorly they are discharging their public duties.
And besides, it’ll be your money paying for an appeal to stop government information from being made available to you. So, as far as they’re concerned, who cares?
There’s a long way to go yet in the fight for greater transparency in our all too often dysfunctional Australian government. Only with much more transparency will we get better public policy, more efficient administration and better outcomes for all.
So, it’s a fight very much worth having, whatever the obstruction from the FIRB and so many other self-interested bureaucrats and their political masters.
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Rex Patrick is a former Senator for South Australia and earlier a submariner in the armed forces. Best known as an anti-corruption and transparency crusader, Rex is running for the Senate on the Lambie Network ticket next year - www.transparencywarrior.com.au.