‘Carbon Cops’ Destined To Join Mega-Regulators Club

The powers which the Gillard Government intends to give the Clean Energy Regulator are unquestionably illiberal.

The climate body will be able to enter and search workplaces and compel people to provide self-incriminating evidence – a clear breach of the basic right to silence.

Those powers are counter to the Western liberal legal tradition, which should provide protection against self-incrimination, and defend the sanctity of private property against state intrusion.

But, that said, the Clean Energy Regulator’s powers are not at all surprising. They’re not even unusual.

It’s a feature of Australia’s regulatory state that government regulators are granted extraordinary powers – often more substantial powers than the police hold.

The Australian Securities and Investments Commission can compel people to give evidence in private hearings, under oath, entirely separate from the court system.

ASIC uses its suite of coercive information-gathering powers around 26 times every single working day, a Senate committee hearing revealed last year. The standard rules of evidence and privilege against self-incrimination do not apply at ASIC hearings.

ASIC’s powers are still being bolstered. In 2010 they had their wire-tapping and phone records access powers increased.

Then there’s the Australian Building and Construction Commission (ABCC), which can bring anyone in for questioning, in secret, and force them to hand over documents, or report on private conversations.

In the Sydney Morning Herald last year, George Williams reported one person was pulled in front of the ABCC because they simply walked by a dispute between a union representative and a building manager.

Last week the ABCC admitted it had issued 203 summonses defectively: the same failure which last year led to the acquittal of Ark Tribe, a building worker who refused to give evidence to the commission.

The Australian Taxation Office has the capacity to ban people from leaving the country if they are in a dispute over tax owed. Paul Hogan learned this first hand. And the ATO can enter and search premises for documents without having requested those documents first.

The Australian Prudential Regulatory Authority and the Australian Competition and Consumer Commission also have substantial coercive powers. They round out Australia’s mega-regulators, a club the Gillard Government’s climate body is destined to join.

Unfortunately the illiberalism of all these powers is obscured by politics.

Conservatives suggest the ABCC’s powers are a necessary evil because they restrain union thugs. Progressives suggest the extraordinary coercive powers of bodies like ASIC are necessary because cartels and corporate fraud and insider trading are endemic.

That’s how the basic principles of the liberal rule of law gets chipped away: through an endless list of exceptions.

Partisans on each side can point to their opponent’s hypocrisies. Hopefully the union movement, which has been rightly vocal defending the rule of law against the ABCC, will be able to recognise the problems inherent in vesting yet another regulator with coercive powers.

After all, does anybody believe the Clean Energy Regulator won’t have its powers extended over time? Every regulator pesters Parliament to have its jurisdiction expanded, its funds increased, and its scope widened. This is the inexorable logic of the regulatory state.

Yes, the creeping thicket of regulation demands growing regulatory powers. If you’re going to impose a regulation you’ll want mechanisms to make sure the regulated comply.

But those powers are being steadily augmented to give independent regulatory agencies an increasing degree of unchecked power.

Typically the powers held by regulatory agencies lack oversight. Richard Gilbert, of the Rule of Law Institute of Australia, has pointed out these regulators are reluctant to disclose data on the use of their coercive powers. And without reliable data, Parliament and the public are unable to assess whether those powers are being used judiciously.

That’s a particular problem because the entire purpose of making a regulatory agency “independent” is to deliberately separate them from the traditional ministerial and parliamentary lines of responsibility. By definition, they lack accountability.

This causes a very real governance problem. Each of these agencies are little fiefdoms, with reputations they feel they need to defend, particular interests, ideological preferences, and obsessions.

This is no more evident than ASIC’s behaviour in recent years.

In one of the most celebrated recent cases, ASIC pursued the mining company Fortescue with such fervour the judges started questioning the regulator’s motives – because there’d been no suggestion anyone lost money out of Fortescue’s actions.

And ASIC’s attempt to have the activity of “rumourtage” (spreading false rumours for profit) penalised failed, after the only rumours ASIC could identify which had altered market outcomes turned out to have been, in retrospect, true.

ASIC seeks more power and influence. It’s an independent body, so it acts independently.

While it eagerly sought its new wiretapping abilities, in June ASIC admitted it had not even used them since they were granted late last year.

We can infer the need for those extra coercive powers may not have been as pressing as originally made out. But it must feel nice to have them on the shelf.

ABCC, ASIC, APRA, ATO, ACCC, and now the CER: it’s rarefied company which the Clean Energy Regulator joins.

No doubt the partisan fluffery will die down and the political roadshow will move on from this week’s debate about ‘carbon cops’.

But we will be left with just another mega-regulator, desperate to expand its domain, and gathering more and more powers.