Abbott suggests sacking bank regulators as ASIC feels the heat


Michelle Grattan, University of Canberra

Former prime minister Tony Abbott has strongly condemned the performance of financial sector regulators, suggesting they should be sacked and replaced by “less complacent” people.

With increasing attention on the apparently inadequate performance of the Australian Securities and Investments Commission (ASIC), Abbott raised the question of what the regulators had been doing as the scandals had gone on.

“We all know there are greedy people everywhere, including in the banks,” he told 2GB on Monday. “But banking is probably the most regulated sector of our economy. What were the regulators doing to allow all this to be happening?”

Abbott said his fear was “that at the end of this royal commission we will have yet another level of regulation imposed upon the banks when frankly what should happen is, I suspect, all the existing regulators should be sacked and people who are much more vigilant and much less complacent go in in their place.”

He said the analogy was, “yes, punish the criminals but if the police are turning a blind eye to the criminals, you’ve got to get rid of the police and get decent people in there”.

Meanwhile Malcolm Turnbull, speaking to reporters in Berlin, defended refusing for so long to set up a royal commission, although he said commentators were correct in saying that “politically we would have been better off setting one up earlier”.

Turnbull said that by taking the course it had the government “put consumers first”.

“The reason I didn’t proceed with a royal commission is this – I wanted to make sure that we took the steps to reform immediately and got on with the job.

“My concern was that a royal commission would go on for several years – that’s generally been the experience – and people would then say, ‘Oh you can’t reform, you can’t legislate, you’ve got to wait for the royal commissioner’s report.’

“So if we’d started a royal commission two years ago, maybe it would be finishing now and then we’d be considering the recommendations … With the benefit of hindsight and recognising you can’t live your life backwards, isn’t it better that we’ve got on with all of those reforms?”

Turnbull dismissed Bill Shorten’s call for the government to consider a compensation scheme for victims by saying this matter was already in the commission’s terms of reference.

Among the reforms it has made, the government highlights giving ASIC more power, resources and a new chair.

But Nationals backbencher senator John Williams, who has been at the forefront of calls for tougher action against wrongdoing in the financial sector, told the ABC that ASIC has got to be “quicker, they’ve got to be stronger, they’ve got to be seen as a feared regulator.

“That is not the situation at the moment,” he said.

He had sent a text message to Peter Kell, ASIC deputy chair, a couple of nights ago “and I said, mate, Australia is waiting for you to act”.

Asked how the culture within ASIC could be changed, Williams said, “I suppose you keep asking them questions at Senate estimates, keep the pressure on them, keep the message going on with the management of ASIC regularly.

“As I have said to the new boss [chair James Shipton], you’ve got to act quickly, you’ve got to be severe, you’ve got to be feared. If you’re not a feared regulator, people are going to continue to abuse the system, do the wrong thing without fear of the punishment”.

He welcomed the increased penalties announced by the government last week.

The chair of the Australian Competition and Consumer Commission (ACCC), Rod Sims, while declining to comment on ASIC, said he agreed with Williams “that you really do have to be feared. And frankly I’d like to think the ACCC is.

“I won’t comment on others but you want people to be really watching out – watch out for the ACCC, watch out that you don’t get caught because if they catch us it’s going to be really dire consequences. And I think we’ve got that mentality,” he told the ABC.

Updated at 4:30pm

The ConversationIn an interview on Sky late Monday, Finance Minister Mathias Cormann admitted, “With the benefit of hindsight, we should have gone earlier with this inquiry.” This was in stark contrast with his colleague, Minister for Financial Services, Kelly O’Dwyer, refusing to make the concession when she was repeatedly pressed in an interview on Sunday.

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

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View from The Hill: Shorten puts heat on government over bank victim compensation, as Coalition gets better poll news


Michelle Grattan, University of Canberra

Sometimes it’s not a bad idea to have a lie-in on Sunday morning. Financial Services Minister Kelly O’Dwyer might wish she’d done so at the weekend.

O’Dwyer should not have gone out – or been put out – on the ABC’s Insiders program with the lines she had on the banking royal commission. The interview was agony to watch, and counter-productive for the government, as she steadfastly refused to admit the Coalition had been wrong in not agreeing earlier to the inquiry, which has produced such devastating disclosures.

So often the government seems to take the public for fools. Scott Morrison’s attempts to turn everything to a discussion of Bill Shorten are ludicrous. O’Dwyer’s effort to avoid any confession of error just drew more attention to the bad call.

Remember O’Dwyer is well-versed in the financial services area. Look at her CV. She was a senior advisor to then-treasurer Peter Costello. Later she worked at the National Australia Bank. She has seen the banking system from inside as well as from her ministerial and advisory roles.

And yet, because of the government’s “admit nothing” strategy, she visibly struggled at every turn in Sunday’s interview.

Asked about her 2016 claim that “for the Labor party to propose a royal commission into banks is reckless and ill-conceived”, she could only fall back to the weak defence that “you can obsess and Labor can obsess about these issues. I’m actually obsessed about fixing the problems”. In other words, the government can be political when convenient but if brought to book, that’s just others “obsessing”.

Labor’s idea of a royal commission had been “a stunt”, she said, but then “there is no question we got it right in establishing the royal commission”. The difference is that the government did it soberly and deliberately, according to O’Dwyer. Grudgingly and belatedly would be a better description.

The alternative strategy would have been for the government to say, “Yes, in retrospect we did not move quickly enough. We were concerned about shaking confidence in the banking system. We did not appreciate how systemic the problems were. We thought we were doing enough but we weren’t”.

Everyone knows the government’s hand was forced in the end by rebel Nationals. Conceding it had been wrong would have been humiliating. But by doing so the government would have gone some way to clearing its own decks. That might have given it a fighting chance of being seen as part of the solution rather than having the attention so sharply focused on its abysmal failure.

Morrison in an interview in AFR Weekend also tried a convoluted avoidance game, as he sought to reconcile being surprised by the royal commission’s revelations with earlier arguing it wouldn’t find issues government didn’t know.

“When I say they were known to government, they were known to government agencies”, he told the newspaper.

“There is a difference between individual ministers being aware of particular things and the regulatory agencies being aware of them.”

Morrison likened his position to that of a police minister not knowing every criminal investigation underway. “I am not aware of every court case and every decision and every practice of every bank in the country any more than anyone else is – indeed than the executives in the banks and they run the things,” he said.

But the issue was not one of knowing “every practice of every bank”. It was a case of being aware of broad malfeasance – and there was plenty of evidence of that, through parliamentary inquiries and what was being said by victims, financial journalists and government backbenchers such as senator John Williams.

When politicians are unwilling to take responsibility, that just adds to the distrust and anger voters feel towards them. It’s a sign they are treating the people with disrespect, so is it any wonder they don’t get respect in return?

This bald-faced refusal to acknowledge their own inconvenient history in part comes from the politicians’ belief that if you just burnish the “spin”, you can get away with saying anything. The idea is that you brainstorm some “lines”, repeat them shamelessly, and hope they will be accepted – regardless of their disconnect from reality.

It might work for an occasional glitch when life generally is going well for a government and the public are in a good mood. These days, neither condition is present.

Meanwhile, as the government implausibly denies being out-manoeuvred over the commission, Shorten is pushing ahead again in the banking debate.

He has released a letter to Turnbull in which he says: “Given the shocking evidence that has been revealed so far, it is time the government gave serious consideration to a compensation scheme for the victims of proven wrongdoing. It’s unacceptable for people to suffer because of the misconduct of others, with no dependable access to justice.”

It will be a popular pitch out in the electorate, just as Labor’s call for a royal commission was.

POSTSCRIPT

The ConversationThe government has received some good news in Monday’s Newspoll in The Australian, with Labor now leading only by a narrow 51-49% in two-party terms. This compares with a 52-48% ALP lead in the poll a fortnight ago, when the Turnbull government passed the 30th consecutive loss landmark. The current poll is the Coalition’s best two-party preferred result since September 2016.

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

Tech giants are battling it out to supply the global internet – here’s why that’s a problem


Claudio Bozzi, Deakin University

The US Federal Communications Commission last month granted Elon Musk’s SpaceX permission to launch 4,425 satellites that will provide affordable high speed broadband internet to consumers.

The Starlink network will be accessible in the US and around the world – including in areas where the internet is currently unavailable or unreliable.

SpaceX isn’t the only company investing in global internet infrastructure. Facebook, Google and Microsoft all have various projects underway to deliver high speed connectivity to remote and rural areas.

It’s all part of a trend of private companies attempting to breach the digital divide and wage a battle for the global internet.




Read more:
Connecting everyone to the internet won’t solve the world’s development problems


But entrusting market forces to build critical internet resources and infrastructure is problematic. These companies aren’t obligated to operate in the interest of consumers. In some cases their practices could serve to further entrench the existing digital divide.

Half the world’s population can’t access the internet

The internet is embedded in social, personal and economic life across the developed world.

But access varies significantly between industrialised nations that boast high per capita incomes, and developing nations with largely poor, rural populations.

For example, 94% of South Korean adults and 93% of Australian adults have access to the internet, compared with just 22% of Indians and 15% of Pakistanis.

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As society becomes increasingly dependent on the internet, nations and communities need equal access. Otherwise legacy inequalities will become further entrenched and new divides will emerge, potentially creating a “permanent underclass”.

Tech giants battle it out

The tech giants have been investing heavily in critical infrastructure in recent years.

Google owns the FASTER trans-Pacific undersea cable link, which has carried data (at 60 terabits per second) between the US, Japan and Taiwan since 2016. Meanwhile, the Microsoft and Facebook funded MAREA trans-Atlantic cable has connected the US to southern Europe (at 160 terabits per second) since in 2017.

New investments centre on atmospheric, stratospheric and satellite delivery strategies.

Along with SpaceX’s constellation of small satellites, Facebook’s internet.org uses atmospheric drones to deliver internet to rural and remote areas. Google’s Project Loon uses high altitude navigable balloons for the same purpose.

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The privatisation of a public good is problematic

Private investors who build infrastructure are driven by commercial imperatives rather than a need to deliver social benefits. And that dynamic can entrench and exacerbate existing – and create new – digital, social and economic divides.

This can be innocuous enough, such as when the company that makes League of Legends built its own internet network to ensure its players weren’t upset by slow speeds.

But it’s more of a problem when faster connections can tilt investment and trading playing fields in favour of those with access, leaving ordinary investors out in the cold.




Read more:
How the internet is failing to drive economic development where promised


Facebook’s Free Basics is a program that aims to provide cheap internet services to consumers in developing countries. It currently operates in 63 developing nations.

Critics say the service is a blatant a strategy to extend Facebook’s global dominance to the developing world. It’s also been accused of violating net neutrality by strictly controlling participating sites to eliminate Facebook’s competitors.

Technology is not neutral

Privately owned and operated internet infrastructure can also become a means of social control.

Termination of internet services is a notorious tactic used by authoritarian regimes to repress dissent by disrupting communication and censoring information. But private entities may also exercise control over infrastructure outside of government regulation.

For example, when WikiLeaks published government correspondence in 2010, Amazon and AnyDNS withdrew the services that maintained the Wikileaks website. Mastercard, Paypal and VISA terminated services through which the organisation received funding for its activities.

These companies were not acting under government direction, citing violations of their Acceptable Use policies to justify their decisions. Harvard professor Yochai Benckler said at the time:

Commercial owners of the critical infrastructures of the networked environment can deny service to controversial speakers, and some appear to be willing to do so at a mere whiff of public controversy.

SpaceX must meet a host of technical conditions before Starlink can be activated. But we shouldn’t assume that providing internet access to developing countries will lead to an ecosystem from which economic or social benefits will flow.

The ConversationWhen the logic of corporate capitalism dominates the provision of internet services, there’s no guarantee that the internet’s founding principles – an egalitarian tool where users share information for the greater good – will be upheld.

Claudio Bozzi, Lecturer in Law, Deakin University

This article was originally published on The Conversation. Read the original article.

A closer look at business cases raises questions about ‘priority’ national infrastructure projects


Glen Searle, University of Sydney and Crystal Legacy, University of Melbourne

Infrastructure Australia’s latest infrastructure priority list has been criticised for being “too Sydney-centric” and for giving Melbourne’s East West Link, cancelled in 2014, “high priority” status. The cancelled Roe 8 project in Perth was removed from the list.

So how does a project get onto Infrastructure Australia’s list? This requires submission of a full business case, which then needs to be “positively assessed” to be given priority status.

But our research, yet to be published, has found these business cases leave out highly significant costs. This article looks at three prominent projects – the WestConnex and East West Link motorways in Sydney and Melbourne respectively, and Cross River Rail in Brisbane – to illustrate how business cases submitted to Infrastructure Australia do not follow its requirements in key respects. This casts serious doubt on the business cases used to justify major motorway projects, as well as on how priority projects are selected.


Read more: FOI reform needed in Victoria amid East West Link fallout

Read more: Roe 8 fails the tests of responsible 21st-century infrastructure planning


What do business cases assess?

Ensuring business cases are completed before investment decisions are finalised is critical to “good planning”. Part of Infrastructure Australia’s remit is to head off concerns that projects are committed to before business cases are fully evaluated. This can help minimise “optimism bias” and ensure investments deliver community benefit.




Read more:
WestConnex audit offers another $17b lesson in how not to fund infrastructure


But we must also examine what the business case is actually showing us. The main part of each business case is the cost-benefit analysis. This compares the money value of project benefits and project costs. Economically viable projects should have a benefit-to-cost ratio above 1:1.

Infrastructure Australia requires project business cases to consider non-monetised benefits and costs, including community impacts. These benefits and costs are required to be quantified in some other way, or at least described. The basis used to estimate “external costs” must also be provided.

The cost-benefit methodology requires any significant positive or negative impacts on third parties – externalities – to be included. Examples include air quality, carbon emissions, noise, biodiversity and climate adaptation.

Social impacts to be covered include equity or the distribution of benefits (which Infrastructure Australia says need to be identified since cost-benefit analysis does not explicitly take these into account), and affected local communities and other individuals/groups. The non-monetised benefit and cost categories listed as relevant are: social impacts, cultural impacts, visual amenity/landscape, biodiversity and heritage impacts.

In support of monetary estimates, proponents must “describe and provide supporting material that demonstrates how land use, population and employment projections are modelled”.

The guidelines stress that the supporting conditions for expected land use impacts will be in place – for instance, necessary infrastructure investment where densification is assumed. Factors that can hinder the realisation of such benefits (such as local opposition to increasing density) must also be included.

This process would seem to produce a rational prioritisation of national infrastructure projects. The problem is that the business cases submitted to Infrastructure Australia do not follow its requirements.

High-priority projects with problematic business cases

To illustrate this, we analysed the business cases of three projects designated as “high priority” for Commonwealth funding:

  • East West Link, to which the Commonwealth allocated A$1.5 billion before the new Victorian government cancelled the project

  • WestConnex, which has been allocated A$3.5 billion

  • Cross River Rail, which is yet to receive funding.

A key problem in these business cases is that significant project cost items have not been monetised. These include costs relating to environmental effects such as noise and visual amenity and to other impacts on businesses, households and property values.

For example, none of the three cases includes a valuation of the costs of lost business and disruption to household travel and amenity during construction. (This is a big issue with Sydney’s southeast light rail project.)

There is also no costing of the loss of property values along motorways, especially around exhaust emission vents. The East West Link and Cross River Rail business cases make some allowance for this by including the value of general changes in amenity from noise, urban landscape and visual amenity. None of these are costed in the WestConnex case.

Another significant omission relates to the costing of land use impacts. The WestConnex and East West Link business cases both forecast more, and longer, road trips across the network as a result of the projects.

The WestConnex scheme will increase vehicle kilometres by 600,000 per day and make outer suburbs more accessible relative to the inner city. The potential extra costs from greater sprawl are high, estimated at A$4.99 billion for Sydney over 25 years from 2011 if greenfield housing was 50% of new dwellings rather than 30%.

The opposite is the case for Cross River Rail. Increased higher-density development around rail stations would produce infrastructure savings, but the business case does not give these a value.

Furthermore, the valuation of changes in transport mode resulting from each project is inconsistent.

The Cross River Rail business case includes savings resulting from motorists switching from road to rail after the line is built.

The WestConnex project will have the reverse effect, with 45,000 public transport trips per day being switched to the motorway. But the business case does not put a value on the costs of this. These include bus and train revenue losses, or reduced service frequency and increased waiting time to reduce losses.

Debatable ‘wider economic benefits’

The most contentious business case component is wider economic benefits. These are productivity improvements arising from increased central city job density as a result of the projects improving access.

These benefits needed to be included to lift the East West Link benefit-cost ratio above one. But this is only achieved through sleight of hand – public transport improvements into central Melbourne are included as part of the full project cost. As the public transport component of the business case had low costs compared to its benefits, including these wider economic benefits was enough to push the overall ratio above 1.

Similar benefits are part of the WestConnex cost-benefit analysis. However, these benefits are to be achieved from extra car trips to the centre. This takes no account of the disincentives of road congestion and lack of parking.

Current central Sydney planning controls allow a maximum of one new parking space per 75 square metres of floor area for not-so-tall offices – or one space for about five new workers – and even fewer spaces relative to floor area for higher buildings. This means most increased job density will not come from people driving to work.

By contrast, the wider economic benefits of the Cross River Rail resulting from increased job density in central Brisbane are not valued for inclusion in the cost-benefit analysis.




Read more:
Brisbane’s Cross River Rail will feed the centre at the expense of people in the suburbs


Rethinking the business case

Our work points to several real concerns:

  • a lack of consistency in what is included in business cases
  • questions about how cases can be reasonably compared across projects
  • discretionary inclusion or exclusion of critical items that bias results in favour of projects.

The ConversationWe need more holistic and integrated analysis of projects. This will take into account not only the “nation-building” aspects – the jobs and growth projects might inspire – but also the disrupting and displacing effects they produce across transport modes, land uses and people’s experiences of the city.

Glen Searle, Honorary Associate Professor in Planning, University of Queensland and, University of Sydney and Crystal Legacy, Senior Lecturer in Urban Planning, University of Melbourne

This article was originally published on The Conversation. Read the original article.

We cannot rely morally on ‘deterrence’ to justify our harsh refugee policies



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Offshore detainees suffer deliberately inflicted harm from their incarceration.
AAP/Eoin Blackwell

Tony Coady, University of Melbourne

When debate about refugees ascends from slogan swapping (“stop the boats”, “bring them here”) to specific reasoning, there seems only one argument worth considering for the ignominious detention of asylum seekers on Manus Island and Nauru and the refusal to ever settle any in Australia.

That argument, advanced by both the government and the opposition (occasionally in a less strident form), stems from deterrence. It’s worth considering the argument even as a handful of these detainees are resettled in the US or possibly other distant and politically ambiguous destinations.

Deterrence involves an action or policy designed to instil fear of the consequences of committing some other action. But there are considerations relevant to the assessment of deterrent measures, especially when those measures inflict pain, damage or harm on some to deter others.

One is the measures’ likely success. Another is their independent moral acceptability.

Another concern is the acceptability of the purpose for which deterrence is employed – that is to say, why is it good to stop the boats? This opens up too many questions to be dealt with here, so assume (what would otherwise be questioned) that the purpose is a good one – for example, stopping deaths at sea. It will rather be the morality of the means (deterrence) that will concern me.

First, the harm issue. It is clear the offshore detainees suffer deliberately inflicted harm from their incarceration. This is so even if we manage to suspend judgement on how extreme that harm is – something made even more difficult by a variety of dramatic and credible testimonies.

Even if detainees are not humiliated, beaten, raped, murdered, or had their health and education gravely neglected, they are effectively and indefinitely imprisoned and often separated from family and friends. This last is usually a profound human harm though less immediately palpable than some others.

As for success, there is room for debate since the associated policy of turning back the boats is already sufficient to deter future boat people and smugglers, or at least stop them landing here. If so, the infliction of serious harm on the refugees through indefinite detention is unnecessary and hence immoral.

In any case, even granting the success of extreme incarceration, there remains the fact that the efficiency of the policy to the desired deterrence outcomes does not justify “whatever it takes”. It may be that the most morally monstrous actions might work as deterrents but be unacceptable morally even to the most casual conscience.

Consider the suggestion we should have deterred further refugees from embarking for Australia by taking a selected group of mothers and children from the earlier arrivals by sea and publicly executing them.

This has the merit of almost certain success and avoiding the extravagant financial cost of offshore detention. But I believe this measure, whatever its success, would strike most Australians as morally repellent.

One reason for the dubious nature of severe deterrent measures is that the morality of deterrence is most at home when those harmed to deter others are guilty of some crime or offence themselves and when the harm is proportional to the offence. This is precisely how deterrence is offered as a (partial) defence of the legal imprisonment of offenders, or more dubiously of capital punishment.

Certain forms of guilt can lead to deprivation of rights, such as imprisonment, and this in turn allows that deprivation to function as a deterrent to others. But asylum seekers are not guilty of any legal or serious moral offence – merely, at most, of irregularity in entering the country.

In any case, execution would be disproportionate to such irregularity, especially when that irregularity is legitimised by international law.

Nor is the situation much changed if, instead of killing them, we had them publicly tortured.

Perhaps, aside from waterboarding or electric shocks, we might try more subtle tortures like separating parent from child, inducing despair by isolating refugees in demeaning conditions on remote islands with no hope of anything like a normal life, and ensuring inadequate access to life-saving medical treatment or educational improvement. And instead of a selected few, we could do it to a large number of those who had arrived seeking refuge from disaster.

We could endeavour to make this policy secretive but just public enough to make deterrence work, while softening the effect of any moral outrage at home by rejecting our responsibility and shifting it to the governmental authorities on those islands and a variety of largely unaccountable private security companies.

The ConversationAgain, this is morally repellent and impossible to justify ethically. But that’s more or less what Australia has been and is doing on Manus Island and Nauru. And that is not a morally permissible resort to deterrence.

Tony Coady, Professor of Philosophy, University of Melbourne

This article was originally published on The Conversation. Read the original article.

Heavy penalties are on the table for banks caught lying and taking fees for no service


Dimity Kingsford Smith, UNSW and Alex Steel, UNSW

Another week of hearings of the Financial Services Royal Commission has seen financial services company AMP admitting it mislead the Australian Securities and Investment Commission (ASIC) on 20 occasions. The commission also saw evidence of both AMP and the Commonwealth Bank of Australia paying themselves client money when there was no adviser allocated to provide services, or the client had passed away.

It seems ASIC and the Director of Public Prosecutions will have no lack of evidence to pursue civil penalties and criminal cases. The bigger issue is what charges to go with.

In deciding what to pursue, ASIC and the DPP will need to weigh up the costs, the charges individuals are willing to plead guilty to, and the outcomes that will best serve the public interest.

Convicting individuals clearly “sends a message”, but these employees are easily replaced with others just as willing to commit the offences, unless the organisation’s culture is changed.

ASIC has confirmed it has a broad-ranging investigation into AMP already underway, and the Treasurer has suggested the behaviour might attract jail time.

Whether or not bankers get jail time will depend on the actual offences charged and a range of sentencing factors. However, the courts are increasingly emphasising the importance of substantial sentences for white collar crime.

Offences with similar maximum penalties in the UK led to a UBS banker who manipulated the London Interbank Offered Rate being sentenced to 14 years jail in 2015. Another joined him in 2016 for two years and nine months and three others were also convicted.

What AMP and CBA did

AMP and CBA have admitted they failed to provide information and report breaches to ASIC as required by the Corporations Act. Misleading Australian government agencies is also a criminal offence under the Act and the Commonwealth Criminal Code.

As well as dealing truthfully with ASIC, all entities licensed to offer financial services must act “efficiently, honestly and fairly” and take reasonable steps to ensure their employees do likewise.

It is not hard to see how taking clients’ money without providing a service is not efficient, honest or fair.

Civil penalties

Civil sanctions could apply to conduct at AMP and CBA which could ultimately involve disqualification for up to 20 years from working as a corporate officer and/or a fine of up to A$200,000.

Officers of a corporation are very senior employees and usually immediately below board level. They have a duty to be careful and diligent and act in the best interests of the company under the Corporations Act. There is a range of lesser charges from general dishonesty to false documentation offences.

Officers of a corporation have duties which require them to be careful and diligent. This is because the officers may have failed to follow up or failed to prevent conduct) after finding out about what was going on.

If ASIC and the DPP can go further and prove that AMP and CBA officers have intentionally caused their company to break the law, it is virtually impossible that conduct could be in the interests of the corporation. AMP and CBA officers may have also breached criminal offences in the Corporations Act if the wrongdoing was reckless or intentionally dishonest.

Criminal charges

Turning to more general offences, here criminal penalties range from 12 months in jail for misleading ASIC, to significant penalties for conspiracy to defraud.

Any bank employee who was involved in the creation of misleading documentation might well be exposed to fraud charges. Under Commonwealth and state law, fraud can involve reckless deception of another (either ASIC or the clients) with an intention to gain a financial advantage for another (AMP or CBA) Those offences have maximum penalties of 10 years jail. There is a range of lesser charges from general dishonesty to false documentation offences.
Those who assisted might well also be liable through accessorial liability.

Prosecutors could also turn to the conspiracy to defraud offence. The Commonwealth version of the offence involves an agreement to dishonestly influence a public official’s decisions. An agreement to provide false documents to ASIC would seem easily to fit this offence. Again, this has a maximum penalty of 10 years.

Similarly, common law conspiracy to defraud charges could be available for dishonestly misleading customers in a way that caused them financial loss. There are no prescribed maximum penalties for this version of the offence.

Multiple offences could mean sentences served concurrently, or partly cumulatively.

The ConversationAlthough the wrongdoing may seem clear to the public, it is likely that complex matters of proof will emerge and ASIC will need to make a range of decisions about the best approach to ensuring cultural change occurs. While convictions might be deserved, the public interest is best served by ensuring that prosecutions are part of wider regulatory action leading to better banking practices.

Dimity Kingsford Smith, Professor and Director, Centre for Law Markets and Regulation, UNSW Law, UNSW and Alex Steel, Professor, UNSW Scientia Education Fellow, UNSW

This article was originally published on The Conversation. Read the original article.

Yes, Syria’s Assad regime is brutal. But the retaliatory air strikes are illegal and partisan



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Civil war has raged in Syria for seven years.
AAP/ Youssef Badawi

Amy Maguire, University of Newcastle and Jason von Meding, University of Newcastle

The mainstream media have broadly accepted the justifications from the United States, France and Britain of humanitarian motivation for the retaliatory strikes against Bashar al-Assad’s Syrian regime.

Journalist Adam Johnson analysed US mainstream coverage and reported that:

major publications take the bulk of the premises for war for granted — namely the US’s legal and moral right to wage it — and simply parse over the details.

The air strike proceeded without publication of proof that Syria was responsible for the alleged atrocity in Douma. Reports are emerging that cast doubt on the official narrative.

Regardless, swift action was demanded and taken. Inspectors from the Organisation for the Prohibition of Chemical Weapons are only now gaining access “to establish facts around the allegations of chemical weapons use in Douma”.

Strikes illegal under international law

Alongside claims for justification from the Trump administration, similar rhetoric featured in statements from French and British leaders. French President Emmanuel Macron claimed there was no doubt Syria was responsible for a chemical attack on civilians, in gross violation of international law. He said:

We cannot tolerate the trivialisation of chemical weapons, which is an immediate danger for the Syrian people and our collective security.

British Prime Minister Theresa May agreed, saying “we cannot allow the erosion of the international norm that prevents the use of these weapons”. May identified the lack of consensus in the UN Security Council as a driving factor in the joint military action.

Even this week the Russians vetoed a resolution at the UN Security Council which would have established an independent investigation into the Douma attack. So there is no practicable alternative to the use of force to degrade and deter the use of chemical weapons by the Syrian regime.

The United Nations Charter contains a prohibition on the threat or use of force against another state. Exceptions to this rule of international law are tightly constrained:

  • Under Article 51 of the Charter, states retain a right to individual and collective self-defence in the case of an armed attack.

  • Under Chapter VII of the Charter, the Security Council may authorise military force to restore international peace and security, if non-forceful measures have failed.

The British government has published a brief asserting the legality of the air strike on Syria as an exercise of “humanitarian intervention” (effectively invoking the doctrine of the “Responsibility to Protect” or R2P, without explicitly mentioning it).

The argument is that the UK and its allies were entitled to use force against Syria because:

  • there was convincing evidence of large-scale and extreme humanitarian distress;
  • there was no practicable alternative to using force in order to save lives; and
  • the use of force in response was proportionate and time-limited to relieve humanitarian suffering.

Yet the R2P doctrine does not establish a new legal basis for the use of force. It allows for the use of force as “humanitarian intervention” only within the provisions of Chapter VII of the Charter, in the case of grave international crimes.

The Labour opposition in the UK has released its own legal opinion, sharply contradicting the government and asserting that the strikes were illegal.

Illegal but legitimate?

The allies responsible for this week’s air strike have not claimed explicit authorisation under the Charter. Instead, their aim has been to establish the legitimacy of the strike. This approach was endorsed by the European Union and Australian Prime Minister Malcolm Turnbull.

According to President Trump:

The nations of Britain, France, and the United States of America have marshalled their righteous power against barbarism and brutality.

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The Assad regime cannot be absolved of its brutality. Indeed, it is a fundamental objective of the post-second world war international legal order to save humanity from the “scourge of war” and promote human rights.

And there can be little doubt that the international legal system is far from perfect, having failed to protect populations around the world from gross violations of humanitarian and human rights law.

In Syria, hundreds of thousands have been killed over seven years of civil war, and millions are now refugees or internally displaced. The complexity of the conflict has seen monitors cease to estimate a death toll.

However, efforts to establish an alternative foundation for military action, beyond what is currently legal, pose risks that must be grappled with.

If states are permitted to determine when force is warranted, outside the existing legal framework, the legitimacy of that framework may be fatally undermined. How could any consistency of response be ensured? By what standard will states distinguish between benevolent and “rogue” regimes?

Leader of the UK opposition, Jeremy Corbyn, challenged Prime Minister May on these grounds:

Does the humanitarian crisis in Yemen entitle other countries to arrogate to themselves the right to bomb Saudi positions in Yemen, given their use of cluster bombs and white phosphorous?

Jeremy Corbyn | Response to Prime Minister’s Syria Statement.

It is relevant in this context that Saudi Arabia is a highly valued client of the British arms industry. According to War Child UK, total sales to the kingdom have topped £6 billion since the conflict in Yemen began. The UK has refused to support a proposed UN inquiry into allegations of Saudi war crimes in Yemen.

Meanwhile, crimes against humanity and gross human rights violations are alleged against Myanmar, the Philippines and Israel, among other states, without attracting the kind of “humanitarian intervention” undertaken in Syria.

Humanitarian intervention or regime change

Jeremy Corbyn has made the case for diplomacy as the only reasonable way forward. Syria should not be a war theatre in which the agendas of external actors take precedence, he argues.

The US has long envisaged regime change in Syria, and stepped up sponsorship of opposition groups since 2009.




Read more:
How the aid community responds in Syria will dictate its role in future crises


Robert Kennedy Jr. traced the history of US intervention in Syria from the first CIA involvement in 1949. He argues that this is another oil war, and says of broader interventionism in the Middle East:

The only winners have been the military contractors and oil companies that have pocketed historic profits, the intelligence agencies that have grown exponentially in power and influence to the detriment of our freedoms and the jihadists who invariably used our interventions as their most effective recruiting tool.

Central to US strategic thinking is the relationship between Syria and Iran. US Ambassador to the UN, Nikki Haley, seemed to say that a condition for US withdrawal is that Iran cease to function as an ally of Syria.

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The ConversationWith the US gaze so firmly fixed on Iran and Russia, the rationale for “humanitarian intervention” can and should be more firmly critiqued.

Amy Maguire, Senior Lecturer in International Law and Human Rights, University of Newcastle and Jason von Meding, Senior Lecturer in Disaster Risk Reduction, University of Newcastle

This article was originally published on The Conversation. Read the original article.

Legal highs: arguments for and against legalising cannabis in Australia



File 20180417 32339 16n0gjo.jpg?ixlib=rb 1.1
Many of the harms associated with cannabis use are to do with its illegality.
from http://www.shutterstock.com

Nicole Lee, Curtin University and Jarryd Bartle, RMIT University

Greens leader Richard Di Natale wants Australia to legalise cannabis for personal use, regulated by a federal agency. This proposal is for legalisation of recreational use for relaxation and pleasure, not to treat a medical condition (which is already legal in Australia for some conditions).

According to the proposal, the government agency would licence, monitor and regulate production and sale, and regularly review the regulations. The agency would be the sole wholesaler, buying from producers and selling to retailers it licences.

The proposed policy includes some safeguards that reflect lessons we’ve learned from alcohol and tobacco. These include a ban on advertising, age restrictions, requiring plain packaging, and strict licensing controls. Under the proposal, tax revenues would be used to improve funding to the prevention and treatment sector, which is underfunded compared to law enforcement.




Read more:
Greens want cannabis to be made legal


Cannabis legislation around the world

In Australia, cannabis possession and use is currently illegal. But in several states and territories (South Australia, ACT and Northern Territory) a small amount for personal use is decriminalised. That means it’s illegal, but not a criminal offence. In all others it’s subject to discretionary or mandatory diversion usually by police (referred to as “depenalisation”).

Several jurisdictions around the world have now legalised cannabis, including Uruguay, Catalonia and nine states in the United States. Canada is well underway to legalising cannabis, with legislation expected some time this year, and the New Zealand prime minister has flagged a referendum on the issue.

In a recent opinion poll, around 30% of Australians thought cannabis should be legal. Teenagers 14-17 years old were least likely to support legalistaion (21% of that age group) and 18-24 year olds were most likely to support it (36% of that age group).




Read more:
Australia’s recreational drug policies aren’t working, so what are the options for reform?


In the latest National Drug Strategy Household Survey, around a quarter of respondents supported cannabis legalisation and around 15% approved of regular use by adults for non-medical purposes.

What are the concerns about legalisation?

Opponents of legalisation are concerned it will increase use, increase crime, increase risk of car accidents, and reduce public health – including mental health. Many are concerned cannabis is a “gateway” drug.

The “gateway drug” hypothesis was discounted decades ago. Although cannabis usually comes before other illegal drug use, the majority of people who use cannabis do not go on to use other drugs. In addition, alcohol and tobacco usually precede cannabis use, which if the theory were correct would make those drugs the “gateway”.




Read more:
Could a regulated cannabis market help curb Australia’s drinking problem?


There is also no evidence legalisation increases use. But, studies have shown a number of health risks, including:

  • around 10% of adults and one in six teens who use regularly will become dependent

  • regular cannabis use doubles the risk of psychotic symptoms and schizophrenia

  • teen cannabis use is associated with poorer school outcomes but causation has not been established

  • driving under the influence of cannabis doubles the risk of a car crash

  • smoking while pregnant affects a baby’s birth weight.

What are the arguments for legalisation?

Reducing harms

Australia’s official drug strategy is based on a platform of harm minimisation, including supply reduction, demand reduction (prevention and treatment) and harm reduction. Arguably, policies should therefore have a net reduction in harm.

But some of the major harms from using illicit drugs are precisely because they are illegal. A significant harm is having a criminal record for possessing drugs that are for personal use. This can negatively impact a person’s future, including careers and travel. Decriminalisation of cannabis would also reduce these harms without requiring full legalisation.

Reducing crime and social costs

A large proportion of the work of the justice system (police, courts and prisons) is spent on drug-related offences. Yet, as Mick Palmer, former AFP Commissioner, notes “drug law enforcement has had little impact on the Australian drug market”.

Decriminalisation may reduce the burden on the justice system, but probably not as much as full legalisation because police and court resources would still be used for cautioning, issuing fines, or diversion to education or treatment. Decriminalisation and legalistaion both potentially reduce the involvement of the justice system and also of the black market growing and selling of cannabis.




Read more:
Assessing the costs and benefits of legalising cannabis


Raising tax revenue

Economic analysis of the impact of cannabis legalisation calculate the net social benefit of legalisation at A$727.5 million per year. This is significantly higher than the status quo at around A$295 million (for example from fines generating revenue, as well as perceived benefits of criminalisation deterring use). The Parliamentary Budget Office estimates tax revenue from cannabis legalisation at around A$259 million.

Civil liberties

Many see cannabis prohibition as an infringement on civil rights, citing the limited harms associated with cannabis use. This includes the relatively low rate of dependence and very low likelihood of overdosing on cannabis, as well as the low risk of harms to people using or others.

Many activities that are legal are potentially harmful: driving a car, drinking alcohol, bungee jumping. Rather than making them illegal, there are guidelines, laws and education to make them safer that creates a balance between civil liberties and safety.

What has happened in places where cannabis is legal?

Legalisation of cannabis is relatively recent in most jurisdictions so the long-term benefits or problems of legalisation are not yet known.

But one study found little effect of legalisation on drug use or other outcomes, providing support for neither opponents nor advocates of legalisation. Other studies have shown no increase in use, even among teens.

The ConversationThe research to date suggests there is no significant increase (or decrease) in use or other outcomes where cannabis legalisation has occurred. It’s possible the harm may shift, for example from legal harms to other types of harms. We don’t have data to support or dispel that possibility.

Nicole Lee, Professor at the National Drug Research Institute, Curtin University and Jarryd Bartle, Sessional Lecturer in Criminal Law, RMIT University

This article was originally published on The Conversation. Read the original article.

The public has a vital role to play in preventing future cyber attacks



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Numerous cyber attacks in recent years have targeted common household devices, such as routers.
Shutterstock

Sandeep Gopalan, Deakin University

Up to 400 Australian organisations may have been snared in a massive hacking incident detailed today. The attack, allegedly engineered by the Russian government, targeted millions of government and private sector machines globally via devices such as routers, switches, and firewalls.

This follows a cyber attack orchestrated by Iranian hackers revealed last month, which targeted Australian universities.




Read more:
Explainer: how internet routers work and why you should keep them secure


A joint warning by the US and UK governments stated that the purpose of the most recent attack was to:

… support espionage, extract intellectual property, maintain persistent access to victim networks, and potentially lay a foundation for future offensive operations.

The Russians’ modus operandi was to target end-of-life devices and those without encryption or authentication, thereby compromising routers and network infrastructure. In doing so, they secured legitimate credentials from individuals and organisations with weak password protections in order to take control of the infrastructure.

Cyber attacks are key to modern conflict

This is not the first instance of Russian aggression.

The US city of Atlanta last month was crippled by a cyber attack and many of its systems are yet to recover – including the court system. In that case, attackers used the SamSam ransomware, which also uses network infrastructure to infiltrate IT systems, and demanded a ransom payment in Bitcoin.

Baltimore was hit by a cyber attack on March 28 that disrupted its emergency 911 calling system. Russian hackers are suspected to have taken down the French TV station TV5Monde in 2015. The US Department of State was hacked in 2015 – and Ukraine’s power grid and military infrastructure were also compromised in separate attacks in 2015 and 2017.

But Russia is not alone in committing these attacks.

In December 2017, North Korean hackers were blamed for the WannaCry attack that infected over 300,000 computers in 150 countries, affecting hospitals and banks. The UK’s National Health Service was particularly bruised and patients had to be turned away from surgical procedures and appointments.

Iran has conducted cyber attacks against numerous targets in the US, Israel, UAE, and other countries. In turn, Iran was subjected to a cyber attack on April 7 that saw computer screens display the US flag with the warning “don’t mess with our elections”.

Prosecuting hackers is ineffective

The US government has launched prosecutions against hackers – most recently against nine Iranians for the cyber attacks on universities. However, prosecutions are of limited efficacy when hackers are beyond the reach of US law enforcement and unlikely to be surrendered by their home countries.

As I have written previously, countries such as Australia and the US cannot watch passively as rogue states conduct cyber attacks against targets within our jurisdiction.




Read more:
Is counter-attack justified against a state-sponsored cyber attack? It’s a legal grey area


Strong countermeasures must be taken in self defence against the perpetrators wherever they are located. If necessary, self defence must be preemptive – any potential perpetrators must be crippled before they are able to launch strikes on organisations here.

Reactive measures are a weak deterrent, and our response should include a first strike cyber attack option where there is credible intelligence about imminent attacks. Notably, the UK has threatened to use conventional military strikes against cyber attacks. This may be an overreaction at this time.

Educating the public is essential

Numerous cyber attacks in recent years – including the current attack – have targeted common household devices, such as routers. As a result, the security of public infrastructure relies to some extent on the security practices of everyday Australians.

So, what role should the government play in ensuring Australians are securing their devices?

Unfortunately, cybersecurity isn’t as simple as administering an annual flu shot. It’s not feasible for the government to issue cybersecurity software to residents since security patches are likely to be out-of-date before the next attack.

But the government should play a role in educating the public about cyber attacks and securing public internet services.

The city of New York has provided a free app to all residents called NYC Secure that is aimed at educating people. It is also adding another layer of security to its free wifi services to protect users from downloading malicious software or accessing phishing websites. And the city of Jonesboro, Georgia is putting up a firewall to secure its services.




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Artificial intelligence cyber attacks are coming – but what does that mean?


Australian city administrations must adopt similar strategies alongside a sustained public education effort. A vigilant public is a necessary component in our collective security strategy against cyber attacks.

This cannot be achieved without significant investment. In addition to education campaigns, private organisations – banks, universities, online sellers, large employers – must be leveraged into ensuring their constituents do not enable attacks through end-of-life devices, unsupported software, poor password protection policies and lack of encryption.

Governments must also prioritise investment in their own IT and human resources infrastructure. Public sector IT talent has always lagged the private sector due to pay imbalances, and other structural reasons.

It is difficult for governments to attain parity of technical capabilities with Russian or North Korean hackers in the short term. The only solution is a strong partnership – in research, detection tools, and counter-response strategies – with the private sector.

The ConversationThe Atlanta attack illustrates the perils of inaction – an audit report shows the city was warned months in advance but did nothing. Australian cities must not make the same mistake.

Sandeep Gopalan, Pro Vice-Chancellor (Academic Innovation) & Professor of Law, Deakin University

This article was originally published on The Conversation. Read the original article.

Explainer: what’s new about the 2018 flu vaccines, and who should get one?


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The flu shot is free for at-risk groups, and available to others for around $10-$25.
Shutterstock

Kanta Subbarao, The Peter Doherty Institute for Infection and Immunity

As winter draws closer, many Australians are wondering whether this year’s influenza season will be as bad as the last, and whether they should get vaccinated.

For most of us, influenza (the flu) is a mild illness, causing fever, chills, a cough, sore throat and body aches, that lasts several days. But some people – especially the elderly, young children and those with chronic diseases – are at risk of serious and potentially deadly complications.

While not perfect, the seasonal influenza vaccine is the best way to protect against influenza viruses. It’s free for at-risk groups, and available to others for around A$10A$25 (plus a consultation fee if your GP doesn’t bulk bill). In some states people can also get influenza vaccines from pharmacies.

Different viruses

There are four influenza viruses that cause epidemics: two type A viruses, called A/H1N1 and A/H3N2 and two type B influenza viruses, called B/Yamagata and B/Victoria viruses. All four cause a similar illness called influenza.

In any season, one of the viruses may dominate, or two or even three viruses could circulate.




Read more:
Influenza: The search for a universal vaccine


Last year’s influenza seasons in Australia and the United States were caused by A/H3N2, while B/Yamagata viruses predominated in Asia, and a mix occurred in Europe.

Influenza A/H3N2 viruses cause more severe epidemics that affect the entire population, from the very young to the very old.

In contrast, influenza B and A/H1N1 viruses tend to cause disease in children and young adults, respectively, sparing the elderly.

Developing the vaccine

Although influenza activity around the world is monitored throughout the year, influenza viruses mutate continuously and we can’t predict which virus will dominate. For this reason, the influenza vaccine includes components that are updated to protect against all four influenza A and B viruses.

Vaccination is the best option to prevent influenza and is offered in the autumn, in anticipation of influenza season in the winter. Typically, the influenza season begins in June, peaks by September and can last until November.

For best protection, you need a flu vaccine each year. Roberty Booy, Head of the Clinical Research team at the National Centre for Immunisation Research and Surveillance, explains why (via the Australian Academy of Science).

It takes about two weeks for the vaccine to induce immunity and the resulting protection lasts about six months.

The 2017 influenza season was severe in all states except WA. The epidemic began earlier than usual, there were more reported cases than in previous years, and there were a large number of outbreaks in residential care facilities in several jurisdictions.




Read more:
Here’s why the 2017 flu season was so bad


Who is most affected?

People of all ages can get influenza but some people are at greater risk of severe illness and complications that require hospitalisation. These groups include:

  • older adults who are over 65 years of age
  • children aged under five years and especially children under one
  • pregnant women
  • Aboriginal and Torres Strait Islander persons
  • people with severe asthma or underlying health conditions such as heart or lung disease, low immunity or diabetes.
Anyone can get a flu vaccine but some people have to pay for it.
Shutterstock

While the National Immunisation Program provides vaccines free of charge for the groups listed above, anyone who wants to reduce their risk of influenza can get vaccinated.

What’s new this year?

There are two notable changes.

One change is that several states (Tasmania, Victoria, New South Wales, Queensland, Western Australia and the ACT) are now offering free vaccination for children under five years of age.




Read more:
Thinking about getting your child the flu vaccine? Here’s what you need to know


This is important because children are prone to severe illness and they spread the virus to their contacts, at home and in daycare. Previously, only WA offered children the influenza vaccine free of charge.

The second change is “enhanced” vaccines are available for adults over the age of 65. The standard influenza vaccine is not optimally effective in older adults.

Two products have been developed to improve the immunity offered by the vaccine: one is a high-dose vaccine four times the strength of the standard vaccine and the second is an “adjuvanted” vaccine, that contains an additive that boosts the immune response to the vaccine.




Read more:
Here’s what you need to know about the new flu vaccines for over-65s


These vaccines have been available in other countries for many years but are being introduced in Australia for the first time in 2018. Older adults will be offered one of the two enhanced vaccines for free.

What happens if you still get influenza?

Even if you’re vaccinated, you can still get influenza.

The effectiveness of the seasonal influenza vaccine varies and is usually around 40-50%. But last year’s vaccine was only around 33% effective overall, because it was not effective against the A/H3N2 virus though it was effective against the A/H1N1 and influenza B viruses.

While vaccines are given ahead of time to prevent influenza, antiviral drugs are available via GP prescription for people who get infected.

The antiviral drugs for influenza are most effective when taken within two days of illness and are only effective against influenza viruses. But they’re not effective against other respiratory viruses that cause colds and respiratory symptoms.

Influenza is a contagious virus that spreads through contact with respiratory secretions that are airborne (such as coughs and sneezes) or that contaminate surfaces (after wiping a runny nose, for instance). If you have influenza, stay home to avoid spreading the virus.

The ConversationUnfortunately, we can’t predict whether the 2018 influenza season will be mild or severe. Once we know which virus or viruses are circulating, we may be in a better position to predict how severe the season will be for older adults.

Kanta Subbarao, Professor, The Peter Doherty Institute for Infection and Immunity

This article was originally published on The Conversation. Read the original article.