By Dr Joan Staples
July 2014

The Federal Council of the Liberal Party, Federal Ministers, Coalition MPs, the Minerals Council of Australia and representatives from the Institute of Public Affairs (IPA) are targeting the advocacy role of Australia’s environmental NGOs.  In recent weeks, there have been calls for the removal of tax deductible status for these NGOs, and for changes to the Competition and Consumer Act and the Corporations Act to restrict their advocacy.

Under the Howard Coalition government, there were concerted attacks on NGOs over a decade aimed at silencing advocacy. While there is now a similar theme of silencing NGO voices, a significant difference is that the current attacks focus strongly on the environment movement and its climate change campaigns.  Increasingly, NGOs are questioning the corporate social responsibility and long-term economic viability of the fossil fuel industry, because of climate change.  They have also publicised what they consider to be unsustainable practices in other industries such as forestry and fishing.  Conservative forces are marshalling their considerable power.  The overall result is that legitimate debate by community voices is under attack.

Tax Deductibility

For community organisations that do not receive government support, their main source of income is usually donations from the public that are tax deductible.  In June, the Liberal Party Federal Council unanimously recommended that the federal government strip environmental NGOs of their charity status and ability to receive tax deductible donations.  They cited NGO engagement in ‘illegal activities’.  The move came from Tasmanian MP, Andrew Nikolic, the Member for Bass.  He named the Wilderness Society, the Australian Conservation Foundation (ACF), the Bob Brown Foundation and the Environmental Defenders Offices (EDOs) as engaging in ‘untruthful, destructive attacks on legitimate business’ and characterised their work as ‘political activism’.  Nikolic claimed NGO activism was at odds with his state’s ‘future prosperity’, and that NGOs engaged in ‘boot camps’ and that their activism was ‘illegal’.

The ACF and the Environmental Defenders Offices’ (EDOs), responded strongly to the Nikolic/Federal Council attack, with ACF calling on Nikolic to withdraw his comments, because the allegations were damaging to ACF’s reputation.  Their legal counsel, Elizabeth McKinnon, pointed out that the Charities Act makes it very clear that advocacy and lobbying activities on behalf of the environment are not unlawful or inconsistent with charitable purposes and that protection of the natural environment is fully entrenched in charitable law.  The EDOs referred to their significant contributions to law reform at the invitation of government agencies and that ICAC had recognised the key safeguard against corruption provided by EDO cases, which are run on behalf of individuals and community groups.

At the same time as the Federal Council resolution, Coalition MP George Christianson, Member for Dawson in north Queensland, attacked environmental NGOs in parliament calling for a ‘cleansing’ of the Dept of Environment’s list of organisations that can receive tax deductible donations.  His attack was focussed on GetUp and Friends of the Earth that were featured in a News Limited article, but he also targeted the local Mackay Environment Group.  The group is trying to protect the Great Barrier Reef with a legal challenge to the federal minister’s approval of dredging for Abbot Point coal port.  There have also been reports of some NGOs being audited by the Australian Tax Office (ATO) and questioned by the Department of Environment in relation to their tax deductibility.  Repeated ATO audits were experienced by the Wilderness Society during the Howard government – a tactic that found no wrongdoing, but which seriously disrupted the work of the organisation.

Attacks on the advocacy role of NGOs are misguided.  A significant High Court case in 2010 upheld the right to advocate of a small NGO called, AID/WATCH.  The case was the culmination of a series of appeals because the ATO had removed the NGO’s charity status and its ability to receive tax deductible donations. AID/WATCH successfully fought its case on the implied right in the Australian Constitution of freedom of political communication and freedom of speech.  In 2011 following the High Court decision, the ATO issued guidelines that clarified the issue, making it clear that it is legitimate for charities to advocate publicly, and that there is no limitation on charities if their purpose is to influence government policy.

Defunding

In December, the national network of legal centres, Environmental Defenders’ Offices (EDOs), abruptly had their funding cut by Attorney General, George Brandis. The EDOs provide advice and assistance to individuals, and groups wanting to challenge local and state government planning decisions.  With limited resources, the EDOs have also taken on high profile cases that their lawyers consider to be of some legal significance. Recently some of these have been community challenges to coal-seam gas and coal mining, including supporting farmers in rural areas.  Kelly O’Shannassy, now CEO of ACF commented that,

This is not a matter of government budget savings.  If the Federal Government can give $10 billion to wealthy mining corporations every year in fossil fuel subsidies, they can spare some change for the Environmental Defenders’ Offices (19 Dec 2013, ABC News Melbourne).

Attorney General Brandis, has also indicated that the service agreements of community legal centres (CLCs) will be reframed to prevent them advocating for legal reform.  CLCs are not environment organisations, but are victims of the same attack.  They help a broad cross-section of the community, but particularly those unable to afford legal assistance and who are at the margins of society.  They are therefore strongly placed to give advice on systemic issues requiring legal reform – a fact that has been recognised by the Productivity Commission Access to Justice Arrangements inquiry.

A number of writers have pointed out the irony of the fact Senator Brandis is currently attempting to change section 18C of the Racial Discrimination Act on the grounds of encouraging and protecting freedom of speech.  This follows the high-profile case in which conservative journalist, Andrew Bolt, was found guilty of racial discrimination under that Act.  At the same time, Senator Brandis is trying to silence the voices of environmental lawyers and community law centres in commenting on public policy!

The 2014 Budget saw the abolition of Grants to Voluntary Environment, Sustainabililty and Heritage Organisations – a scheme that assisted state conservation councils and their member groups, as well as hundreds of grass-roots groups throughout the country. It had been in place since 1973.

The Coalition has also been moving to abolish the Australian Charities and Not-for-profits Commission, a relatively new body that the NGO sector had hoped would facilitate accountability, as well as reduce government red tape.  Any changes to the governance regime overseeing charities raises concerns how that might play out when the government is trying to silence advocacy.

Competition and Consumer Act

For some months there have been calls from Coalition MPs, Ministers, MPs and the Australian Minerals Council to amend Section 45DD of the Competition and Consumer Act.  The relevant Section is an industrial relations provision aimed at unions conducting boycotts unrelated to their immediate wages and conditions.  It also has exemptions if,

• the dominant purpose for which the conduct is engaged in is substantially related to environmental protection or consumer protection; and  

• engaging in the conduct is not industrial action.

The amendments would remove the exemption for ‘environmental protection’.  Calls for amendments appear to be aimed at groups that provide public information about the environmental effects of products (such as unsustainable timber extraction and seafood harvesting), as well as information on the effects of investing in, extracting and using fossil fuel.

As the threat of climate change increases, NGOs are questioning the corporate social responsibility of the fossil fuel industry because of its contribution to climate change.  They have also been pointing out the danger to investors if assets become ‘stranded’ or lose their value as international climate change regulations develop. The fossil fuel divestment campaign in the US has been described by the New York Times as ‘the fastest growing student campaign in generations’.  Similar campaigns have dramatically taken off in Australia with a number of sophisticated NGOs demonstrating both effectiveness and the ability to attract strong support.

A review of competition law announced by the government has been used as a platform to promote the idea of changes to Section 45DD.  The week before the review panel released its issues paper, parliamentary secretary for agriculture, Tasmanian Senator Richard Colbeck, stated that, ‘I think there is an appetite in the government for changing these laws’.   Submissions such as that from the Australian Forest Products Association have called for the removal of the exemption.  The review is due to provide its draft report in September.

The Minerals Council of Australia released a document in June written by Spencer Davidson a Senior Fellow of the IPA, entitled A Critique of the Coal Divestment Campaign.  In it, he welcomed the Abbott government’s ‘announced plans’ to remove the Section 45DD exemption ‘to provide a level playing field and hold environmental groups to the same standard as business’.

Community boycotts against unethical products and practices have a long and honourable history.  British slave traders were called to account with a boycott on slave-grown sugar in the late 18^th century.  Slaves were being taken to sugar plantations by British ship owners.  A campaign led by women who were disenfranchised at the time saw over 400,000 people giving up the use of slave-grown sugar in protest.

Respected economist, John Quiggin, noted that calls to amend section 45DD are against freedom of speech. Quiggin mused ironically that they should be of concern to new Human Rights Commission, Tim Wilson, formerly from the IPA.   It should also be noted that where such changes to go ahead they would also impact on the anti-wind farm lobby!

Corporations Act

Davidson went further in his paper for the Minerals Council and claimed that organisations such as 350.org and Market Forces were in violation of Section 1041E of the Corporations Act by encouraging investors to divest from fossil fuel companies because of climate change impacts.  He argued that by stigmatising the industry, the NGOs were infringing the property rights of fossil fuel companies.  Davidson repeated his arguments about both the Competition and Consumer Act and the Corporations Act in the Conversation in July.

A proposition that NGOs were in breach of Section 1041E would require very high thresholds to prove according to Ian Ramsay, Professor of Commercial Law at Melbourne University.  He was quoted in the Australian Financial Review as saying that first the Minerals Council would have to prove the statements by environmentalists were materially false and misleading.  He also went on to say,

You also need to prove that the ­environmentalists who made the statements or disseminate them don’t care whether the statements are true or false or that they know or ought reasonably to know the statements are materially false or misleading.  Again, it may not be easy to prove this. And a third requirement is that the statements are likely to induce someone to buy or sell financial products, or else the statements have the effect of reducing the price for trading in financial products on a financial market.

Conclusion

During the Howard government, its attempts at silencing NGO advocacy were well-documented by writers such as Hamilton and Maddison. I wrote at the time on the theoretical background to the attacks pointing out that the Howard government and representatives of the IPA denied the legitimacy of NGOs in our community life and rejected Australia’s long-held model of democracy in which many voices contribute to public policy. Instead, our democracy was portrayed as a market in which NGOs ‘interfered with the market’ by proposing public policy when they were not elected representatives or ‘accountable’.

These current attacks continue that theoretical push, but are more focussed on silencing climate change advocacy and protecting the corporations that NGOs are rightly targeting as being responsible for emissions and unsustainable practices.  The charges are of being ‘illegal’, of conducting ‘political activism’ and ‘economic sabotage’.

It goes without saying that NGOs need to have good internal governance, with transparent accurate accounting at all times.  Those who find their tax deductibility status targeted by government will need to respond to the immediate line of attack. But, as well, their defence should always be to publicly defend their democratic right to speak publicly. AIDWATCH set an excellent example of this.   The defence it mounted in its long and successful campaign did not waver in calling the attacks for what they were – an attack of freedom of speech.

There is good reason why the NGO sector is also called the Third Sector – with government and business being the first and second sectors.  All three sectors make up our democratic arrangements and each is needed.  The essential role of the NGO sector is in giving voice to the average citizen, in calling governments and business to account, in promoting policy that has a longer time frame than the next election, and in providing debate that enriches options in public policy. All three sectors need equal respect, but we seem to have a situation in which the business sector is paramount and government is its lackey.  Attacking the NGO sector’s ability to advocate and trying to silencing this essential voice can only undermine the health of our democracy.