24 December 2014

Medicines and Devices Regulation Review

The 110 page Review of Medicines and Medical Devices Regulation Discussion Paper noted here features a large number of questions in eight chapters, with a chapter on Complementary Medicine issues to be released in future.

Public submissions in response to the paper are due 5 January, with a report to the Government by 31 March.

The paper is strongly predicated on cutting what is described as "red tape" and might be construed as exacerbating the regulatory incapacity - if not regulatory capture - criticised by observers of the Therapeutic Goods Administration (TGA), ie the Australian counterpart of the FDA and the EMA.

The paper follows a succession of inquiries into the TGA and into associated matters such as pharmaceutical patents and ACCC recognition of the Medicines Australia Code, along with controversy over fraud and other problems regarding generic medicines.

Chapter Four of the paper states that "opportunities for improvement" reflect five themes:
1. There is duplication of regulatory processes, which creates an unnecessary additional burden on industry.
2. The regulatory framework lacks the necessary flexibility required to facilitate early access to innovative products.
3. Some regulatory requirements are not considered to be commensurate with the risk posed by the regulated products.
4. The regulatory framework is overly complex and poorly understood by many of those who have to interact with it.
5. Some TGA processes are considered to be overly burdensome and out of step with technology. 
Those themes determine the questions asked by the Review panel, which are as follows -

The Regulator
  • How might a trusted overseas regulator be defined? Most countries assess medicines for safety and efficacy prior to approving them for market, but the nature and extent of the assessment that is undertaken can vary markedly. 
  • If Australia were to register medicines based on an assessment by an overseas regulator, how is the Australian public to be reassured that this assessment will have been conducted with the same skill, depth of knowledge, and rigour as currently occurs in Australia? One option may be to develop a set of transparent criteria against which overseas regulators would be assessed in order to designate them as ‘trusted’. 
  • What options are available for determining ‘trusted overseas regulators’? 
  • If a criteria based approach were to be adopted, what criteria should apply in determining whether or not an overseas regulator is trusted? 
  • If the TGA receives an application for registration of an NCE in Australia and the NCE has been approved by one trusted overseas regulator but rejected by another, should the submission be assessed by the TGA? If not, why not? 
  • What other options would ensure that the health and safety of Australian consumers is protected? 
  •  If a trusted overseas regulator rejects an application for marketing of a medicine for the same indications for which that medicine has been registered in Australia, should this spark a review by the TGA? 
Additional Requirements?
  • Should the TGA approve the registration of a medicine on the ARTG on the basis that it has been approved for the same indications by a trusted overseas regulator? If not, why not? 
  • What value do you believe an assessment by the TGA adds in cases where such an assessment has already been undertaken by a trusted overseas regulator? 
  • Are there aspects of safety, quality or efficacy that need to be considered in the Australian context? If so, what aspects? 
  • Would consideration of these aspects necessitate a full assessment of the entire application by the TGA? If so, why? 
  • Should sponsors of medicines that have been approved by a trusted overseas regulator have to submit an Australian specific Module 1 of the CTD to the TGA for assessment? If not, why not? 
  • What do you see as the risks and benefits of not requiring sponsors to submit an Australian specific Module 1? 
  • What would be the likely quantum of savings to industry per application, if Australia was to accept assessments of trusted overseas regulators, with or without a requirement to submit an Australian specific Module 1 of the CTD to the TGA for assessment? 
  • Would such an approach: Result in delayed access to new medicines by the Australian public? If not, why not? If yes, are there strategies that could be put in place to prevent this from occurring? Undermine TGA PBAC parallel processing mechanisms? If so, how might this be managed? 
Meaning of Product Approval
  • Should a change to a medicine that has been approved by a trusted overseas regulator necessitate a further assessment by the TGA in circumstances where that change may impact safety, quality or efficacy? If not, why not? If yes, should the assessment by the TGA be limited only to those aspects of the application that are impacted by the change? 
  • If Australia was to accept approvals of medicines by trusted overseas regulators, should this include conditional/provisional approvals? If not, why not? If yes, should the marketing conditions/provisions imposed by the trusted overseas regulator also apply in Australia? If not, why not? 
  • Should there be capacity for Australia to impose its own conditions, either in addition to, or in place of, those imposed by the trusted overseas regulator and if so, why? Should Australia introduce an accelerated approval program(s)? 
  • What are the potential risks and benefits of such programs and how might the risks be managed and the benefits maximised? 
  • If Australia were to introduce an accelerated approval program: Should there be a single pathway (as per the EU model) or multiple pathways (as per the US approach) to apply? What eligibility criteria should apply to the pathway(s)? That is, under what circumstances could a sponsor apply for accelerated approval of an NCE? 
  • If medicines were to be provisionally approved, based on more limited clinical data than is traditionally required for a full approval: What additional requirements, if any, might be appropriate to alert prescribers and/or consumers to the provisional approval and its implications? What requirements would need to be in place to manage withdrawal of the medicine from the Australian market if safety or efficacy concerns emerged? 
Approval of variations
  • Should Australia adopt a risk based regime for variations, which allows notifications and/or annual reporting for changes that are at low risk of impacting the quality, safety or efficacy of the product? If not, why not? If yes, what might such a regime look like? 
  • How might notification/reporting procedures be designed so as to minimise burden on sponsors? How might the process for minor variations for export only medicines be streamlined so as to facilitate more timely access to export opportunities without compromising health and safety? 
  • Is the Special Access Scheme efficient and effective for Category A patients? Are there issues or concerns with the way in which the Scheme currently runs?
  • Should the Special Access Scheme be revised to narrow the range of circumstances in which TGA approval is required for use of an unregistered medicine in a Category B patient? If yes, what criteria might be applied to determine when an approval is required? If no, why not? 
  • What do you perceive as the risks of such an approach? 
Inadequate post-market surveillance?
  • Does Australia’s post market surveillance of medicines need to be enhanced? If so, how might this occur? 
  • What would be the features of an effective post market surveillance system? If not, why not? Why do you consider the current system effective? 
Regulatory advice to foster innovation
  • Is there a role for the TGA in providing a regulatory advice service to product developers/sponsors? If yes, what should the nature and scope of this advice service be? 
  • How could risks of regulatory capture be avoided? If not, why not?
  •  Is current guidance material easy to locate, navigate and understand? If not, what are the main issues and concerns? 
  • How might this material be improved? 
  • Is the TGA website easy to navigate? If not, how might it be improved? 
Burdensome processes
  • What TGA processes do you consider most burdensome and why? How might these be improved? 
  • Do current regulatory requirements, costs, and timeframes act as a disincentive to the registration of additional indications for medicines? 
  •  If yes, how might the regulatory framework or processes be changed to reduce the disincentives and/or provide incentives for the registration of additional indications, especially in paediatric populations? 
Trusted overseas regulators for generic medicines
  • What options are available for determining ‘trusted overseas regulators’? 
  • If a criteria based approach were to be adopted, what criteria should apply in determining whether or not an overseas regulator is trusted?
  •  If the TGA receives an application for registration of a generic medicine or biosimilar in Australia which has been approved by one trusted overseas regulator but rejected by another, should the submission be appropriately assessed by the TGA? If not, why not? 
  • What other options would ensure that the health and safety of Australian consumers is protected? 
  • Should a change to a biosimilar that has been approved by a trusted overseas regulator necessitate a further assessment by the TGA in circumstances where that change may impact the comparability of the biosimilar? If not, why not? If yes, should the assessment by the TGA be limited only to those aspects of the application that are impacted by the change? 
Additional requirements re generics
  • Should the TGA approve the registration of a generic medicine on the ARTG on the basis that: a trusted overseas regulator has assessed it as being bioequivalent to a reference product available in the overseas market; and the sponsor provides evidence that the overseas reference product and the Australian reference product are identical or interchangeable? If not, why not? 
  • What value do you believe an assessment of bioequivalence by the TGA would add in such circumstances? Could work sharing initiatives between regulators improve timeframes for approval of generic medicines? If so, how? 
  • In what ways could TGA processes for assessment of generic medicines be better harmonised with international practice? 
  • Should the TGA approve the registration of a biosimilar on the ARTG on the basis that: a trusted overseas regulator has assessed it as being biosimilar to a reference product available in the overseas market; and the sponsor provides evidence that the overseas reference product and the Australian reference product are identical? If not, why not? 
  • What value do you believe an assessment of biosimilarity by the TGA would add in such circumstances? 
  •  Should Australia adopt a risk based regime for variations, which allows notifications and/or annual reporting for changes that are at low risk of impacting the quality, safety or efficacy of the product? If not, why not? If yes, what might such a regime look like? 
  • How might notification/reporting procedures be designed so as to minimise burden on sponsors? 
Variations for Export
  •  How might the process for minor variations for export only medicines be streamlined so as to facilitate more timely access to export opportunities without compromising health and safety? 
Burdens on registration of generics
  •  Do you consider the timeframes for assessing applications for registration of new generic medicines to be unreasonable? 
  • How do they compare with timeframes achieved by overseas regulators such as the FDA and the EMA? What do you think are the main factors impacting TGA timeframes for assessment of generic medicines and how might these factors be addressed? 
  • Would the creation of a separate registration pathway for generic medicines achieve more timely approvals and more appropriately align regulatory processes with risk? If not, why not? If yes, what would the generic approvals pathway look like? How would it differ from the process for NCEs? 
  • Should an update to the indications for a generic medicine which is in line with the originator medicine, be treated as a variation, rather than as creating a separate and distinct good? 
  • What are the risks and benefits of this approach? 
Generics trade names
  •  Do you believe that the process for applying for an additional trade name is burdensome? If yes, how do you propose it could be modified? 
  • What do you think would be a reasonable statutory assessment timeframe for consideration of an application for an additional trade name? 
Risks re OTC medicines
  • Do Australian decisions regarding the scheduling and/or rescheduling of medicines appropriately balance risk and benefit? If not, why not? 
  • Are the current scheduling classifications and factors suitable for appropriately assessing substances based on risk? If not, in what way could they be improved? 
  • What would be the advantages/disadvantages of adopting a formal methodology for assessment of risks and benefits to inform scheduling decisions? 
  • What might such a methodology look like? How could the transparency of the scheduling process be improved? 
  • What are the risks and benefits of allowing direct to consumer advertising of Schedule 3 Medicines? 
  • How might any risks be managed? 
Risks re therapeutic goods
  •  Is the threshold at which some products are classified as medicines too low? If so, what criteria could be used to determine which types of products were more suited to regulation as consumer goods? 
  • What are the advantages and disadvantages of excluding some low risk products from the Therapeutic Goods Act 1989
Variations re OTC medicines
  • Should Australia adopt a risk based regime for variations, which allows notifications and/or annual reporting for changes that are at low risk of impacting the quality, safety or efficacy of the product? If not, why not? If yes, what might such a regime look like? 
  • How might notification/reporting procedures and mechanisms be designed so as to minimise burden on sponsors? 
  •  How might the process for minor variations for export only medicines be streamlined so as to facilitate more timely access to export opportunities without compromising health and safety? 
Burdens re OTC Trade names
  •  Do you believe that the process for applying for an additional trade name is burdensome? If yes, how do you propose it could be modified? 
  • What do you think would be a reasonable statutory assessment timeframe for consideration of an application for an additional trade name? 
 Scheduling burdens
  • Are scheduling and registration processes poorly aligned? If so, what approach could be adopted to achieve better harmonisation? 
  • Would efficiency be improved and complexity reduced by introducing parallel processing of: scheduling and registration applications?; and rescheduling applications and related labelling alterations? 
  • What are the advantages/disadvantages of such an approach? 
Recognition of overseas device regulators?
  • Should the TGA undertake its own assessment of the competency of EU notified bodies? If yes, how might this occur? If not, why not? 
  • Alternatively, given the concerns with the EU system, should Australia look to recognise other international regulators as ‘trusted’ for the purpose of device approvals? If yes, what criteria should apply in determining whether or not an overseas regulator is trusted? 
  • Should any criteria take into account different device classifications? For example, a regulator could be designated trusted for some classes of devices but not others. 
Additional requirements re devices?
  • Should the TGA approve the inclusion of a medical device on the ARTG on the basis that it has been approved for the same purpose by a ‘trusted’ overseas regulator?  If yes: ­ should this occur regardless of the class of the device? 
  • ­ How could concerns about the quality of some overseas conformity assessments be managed? If not, why not? 
  • What value do you believe an assessment by the TGA adds? Are there aspects of safety, quality or efficacy that need to be considered in the Australian context? If so, what aspects? 
  • Where there are differences in device classification between Australia and the EU, should sponsors be required to meet additional conformity assessment requirements? If not, why not? 
  • Should Australia adopt the EU classification system? If not, why not? 
  • What are the strengths of the Australian device classification system that cannot be found in the EU system? 
  • Should Australia maintain Australian specific requirements with respect to labelling and post market monitoring? If not, why not? If yes, what value do these requirements add? 
Device approval
  • Should a difference in a medical device that has been approved by a trusted overseas regulator necessitate a further assessment by the TGA in circumstances where that difference may impact safety, quality or performance? If not, why not? If yes, should the assessment by the TGA be limited only to those aspects of the application that are impacted by the difference? 
  • Would this approach apply to all classes of medical devices? 
  • If Australia was to accept approvals of medical devices by trusted overseas regulators, should this include conditional/provisional approvals? If not, why not? 
  • Would this approach apply to all classes of medical devices? If yes, should the marketing conditions/provisions imposed by the trusted overseas regulator also apply in Australia? If not, why not? 
  • Should there be capacity for Australia to impose its own conditions, either in addition to, or in place of, those imposed by the trusted overseas regulator and if so, why? 
  • Should Australia introduce an accelerated approval program(s) for higher risk medical devices? If yes:  What eligibility criteria should apply to the accelerated approval pathway? That is, under what circumstances could a sponsor apply for accelerated approval of a device?  What are the potential risks and benefits of such programs and how might the risks be managed and the benefits maximised? 
  •  If higher risk medical devices were to be provisionally approved, based on more limited clinical data than is traditionally required for a full approval:  What additional requirements, if any, might be appropriate to alert clinicians and/or consumers to the provisional approval and its implications? 
  • What requirements would need to be in place to manage withdrawal of the device from the Australian market if safety or efficacy concerns emerged?
  • What additional post market surveillance would need to be in place for medical devices that were provisionally approved? 
Flexibility
  •  Is the current regulatory framework and classification system flexible enough to accommodate new and emerging medical device technologies? If not, why not? How could it be improved? 
Device risk and regulatory burdens
  • Does the current regulatory framework for medical devices in Australia provide an appropriate balance between managing risk and minimising unnecessary regulatory burden? If not, why not?
  • Should low risk medical devices that are not subject to an independent conformity assessment be included on the ARTG? If not, why not? 
  • Are there any risks involved in not including such products on the ARTG? If yes, why? 
  • What are the benefits of these products being included on the ARTG? 
  • Should Australia adopt a risk based regime for variations, which allows notifications and/or annual reporting for changes to medical devices that are at low risk of impacting the quality, safety, or performance of the device? If yes, what might such a regime look like? 
  • How might notification/reporting procedures be designed so as to minimise burden on sponsors? If not, why not? 
Post-market surveillance
  • Does Australian have the balance right between pre market and post market regulation of medical devices? If not, why not? How could it be improved?
  •  What are the features of an effective post market surveillance system? 
Access to unapproved devices
  •  Is the Special Access Scheme efficient and effective for Category A patients? Are there issues or concerns with the way in which the Scheme currently runs? 
  •  Should the Special Access Category B and the Authorised Prescriber schemes be revised to narrow the range of circumstances in which TGA approval is required for use of an unregistered medical device?  If yes, what criteria might be applied to determine when an approval is required? If no, why not? 
  • What do you perceive as the risks of such an approach? 
In vitro diagnostics
  • Has the regulatory framework for IVD’s resulted in a reduced emphasis on clinical best practice? If so, how.
  • Should there be statutory timeframes for assessment of applications for inclusion of an IVD on the ARTG? 
Process burdens
  • What TGA processes do you consider most burdensome and why? How might these be improved? 
  •  How might the processes required to include a device family on the ARTG be streamlined without undermining public health and safety? 
  •  Are there other concerns with the inclusion of devices on the ARTG? How might these be addressed? 
  • Should the TGA allow a broader range of permissible formats for instructions for the use of medical devices? If not, why not? 
  • Do current regulatory requirements, costs, and timeframes act as a disincentive to the registration of additional intended purposes for medical devices? If yes, how might the regulatory framework or processes be changed to reduce the disincentives and/or provide incentives for the registration of additional intended purposes? 
Classification of devices
  •  Is the classification system for medical devices too complex? If yes, how might it be simplified without impacting public health and safety? 
  • Do manufacturers require assistance, such as online decision tools, to assist them to correctly classify medical devices? If not, why not? If yes, what sorts of assistance would be most effective? 
  •  Is the pre market assessment of medical devices considered overly complex in other ways? If yes, in what way? 
  • What are the major pressure points and how might these be addressed? Is there a role for the TGA in providing a regulatory advice service to product developers/manufacturers/sponsors? If not, why not? If yes, what should the nature and scope of this advice service be? 
  • How could risks of regulatory capture be avoided? 
  • Is current guidance material easy to locate, navigate and understand? If not, what are the main issues and concerns? How might this material be improved? 
  • Is the TGA website easy to navigate? If not, how might it be improved? 
Transparency
  •  Should information about regulatory decisions in respect of medical devices be publicly available? For example, an evaluation report or other relevant information. If not, why not? 
  • What do you see as the risks? If yes, how would this benefit consumers, clinicians and industry? 
  • How could any risks be managed? 
  • Should other regulatory findings relating to medical devices be made public, for example, reports on audits or post market reviews?  If not, why not? What do you see as the risks?  If yes, how would this benefit consumers, clinicians and industry? How could any risks be managed? 
  • Could the regulation of medical devices be made more transparent in other ways? If so how, and what would be the risks and benefits of the proposed approach? 
Interaction with other frameworks (eg the GTR)
  •  Is the system overly complex for manufacturers/sponsors of devices using hybrid/convergent/ co dependent technologies? If yes, how could the process be streamlined without undermining public health and safety? 
Consumer understanding
  • Is the regulation of medical devices transparent enough in terms of informing health professionals and consumers about the level of scrutiny that a device has undergone? If not, how could it be improved? 
  • Should there be a system for medical devices similar to the AUST R and AUST L system for medicines? If not, why not? 
Advertising Framework
  • Should Australia allow advertising of prescription medicines to the general public? If not, why not? If yes, what risks might this create and how could these be mitigated? 
  • What are the risks and benefits of allowing direct to consumer advertising of Schedule 3 medicines? How might any risks be managed? 
Co-regulation
  •  Should Australia continue to require compulsory pre vetting of medicines advertised direct to consumers or should it move towards a self regulatory, or combined statutory and self regulatory, model? 
  • If Australia was to adopt a self regulatory model or a model which combined risk based regulation with self regulation (such as the UK) what key elements would need to be in place to ensure that public health and safety was protected, while minimising regulatory burden? 
Advertising enforcement
  • Should there be a single authority for receiving complaints about the advertising and marketing of therapeutic products? If yes, which agency would be best placed to act in this capacity? 
  • Does the current regulatory framework for advertising medicines direct to consumers: Provide adequate incentives to promote compliance with requirements? If not, why not. What additional incentives should be included? Contain adequate sanctions and penalties for non compliance? If not, what additional sanctions and penalties should be available? 
  • Should the TGA have the power to take immediate action to suspend an advertisement that it considers places at risk public health and safety? 
  •  If yes, why and how might any risks be mitigated? If not, why not? 
  • Is the current self regulatory scheme for advertising of medical devices effective? If not, why not? Please provide examples of where the system has failed.

Bad brokers

The New York Times reports that the Federal Trade Commission is alleging that Nevada-based data broker LeapLab "sold intimate details about several hundred thousands of people, including their Social Security numbers and bank account numbers, to marketers and other companies that had no legitimate need for that information".
One of the data purchasers, Ideal Financial Solutions of Las Vegas, reportedly used the records it bought to make unauthorized withdrawals from consumers’ bank accounts, according to a separate federal lawsuit.
The complaints are part of a multiyear government crackdown on fraudulent debt collection and other scams that target people in financial distress. But the case against LeapLab indicates that federal regulators are now widening their investigation to include the middlemen who traffic in the kind of secret consumer details that can make consumers vulnerable to financial scams.
“We have been targeting the actual fraudsters for years. Now we are really trying to move behind the scenes and target the data brokers,” Jessica Rich, the director of the F.T.C.’s Bureau of Consumer Protection, said in a phone interview Tuesday. “The message is that selling consumers’ highly sensitive data to third parties, with either the knowledge or a strong suspicion that they have no legitimate need for it, violates the law.”
Litigation by the FTC against LeapLab features the claim that the broker
obtained files on hundreds of thousands of consumers who were applying for payday loans from lead generators. These are companies that set up consumer-friendly sites, typically asking users to provide their contact information and specific financial details, with the goal of marketing access to potential customers to businesses like payday lenders and insurers.
According to the complaint, LeapLab bought payday loan applications containing consumers’ names, addresses, phone numbers, employer name, Social Security numbers, bank account numbers and bank routing numbers. But federal regulators say that the company sold only about 5 percent of those records to online lenders, who paid between $10 to $150 to acquire each loan application. The remaining records were sold, without consumers’ knowledge or consent, for about 50 cents each to non-lenders including “fraudsters, spammers and telemarketers,” the complaint said.
“They sold information that could only be used for illegitimate purposes and that is what happened,” said James A. Kohm, associate director of the division of enforcement in the F.T.C.’s consumer protection bureau.
Federal regulators said that one company, Ideal Financial Solutions, bought at least 2.2 million consumer dossiers from LeapLab and other information middlemen. The company used the information to make about $43 million in unauthorized bank withdrawals or charges without providing any product or services to consumers in exchange for the money

23 December 2014

Homeopathy Minus

The ACCC has announced that the Federal Court in Australian Competition and Consumer Commission v Homeopathy Plus! Australia Pty Limited [2014] FCA 1412 has found Homeopathy Plus! Pty Ltd and its director Frances Sheffield, in breach of the Australian Consumer Law, engaged in misleading conduct and made false or misleading representations regarding the effectiveness of the whooping cough vaccine and homeopathic remedies as an alternative.

The ACCC media release states -
The Homeopathy Plus! website contained statements to the effect that the whooping cough vaccine is “unreliable at best” and “largely ineffective” in preventing whooping cough, and that homeopathic remedies are a proven safe and effective alternative for the prevention of whooping cough.
The Court found that Homeopathy Plus! and Ms Sheffield engaged in misleading and deceptive conduct and made false or misleading representations by publishing statements on the Homeopathy Plus website to the effect that:
  • the whooping cough vaccine is short lived, unreliable and no longer effective; 
  • the vaccine may not be the best solution for, of limited effect, and is unreliable at best in protecting against whooping cough; and 
  • the vaccine is largely ineffective in protecting against whooping cough, when in fact the whooping cough vaccine is effective in protecting a significant majority of people from contracting whooping cough.
The Court also found that Homeopathy Plus! and Ms Sheffield engaged in misleading and deceptive conduct and made false and misleading representations to the effect that there was an adequate foundation in medical science for the statement that homeopathic treatments are a safe and effective alternative to the whooping cough vaccine, when in fact no such foundation exists and the vaccine is the only treatment currently approved for use and accepted by medical practitioners for the prevention of whooping cough.
"Representations that may mislead consumers about the effectiveness of medical products or treatments are of significant concern to the ACCC", ACCC Commissioner Sarah Court said.
"In this case, there was a real risk that consumers might be influenced by the representations not to use the whooping cough vaccine and instead to rely solely on homeopathic products for the prevention of whooping cough. This is against the advice of medical professionals and the Commonwealth Department of Health."
The matter returns to court on 4 February 2015 to set a timetable for further evidence on penalties and other remedies.
The ACCC is seeking injunctions and pecuniary penalties, in addition to the declarations already made by the Court.
The media release notes that
In April 2012, Homeopathy Plus! removed representations from its website at the request of the ACCC [noted here], after the ACCC had expressed concerns they were misleading. Similar claims were then reinstated in January 2013, after which the ACCC instituted proceedings against Homeopathy Plus! and Ms Sheffield.
Homeopathy Plus and Sheffield have attracted criticism under the  permissive TGA framework for advertising, a framework that is within the scope of the latest TGA review - noted here.

The judgment states
1. The First Respondent and the Second Respondent have in trade and commerce:
a) engaged in conduct that was misleading and deceptive or was likely to mislead and deceive, in contravention of section 18 of the Australian Consumer Law (“ACL”); and
b) in connection with the supply or possible supply of homeopathic treatments or products (“Homeopathic Treatments”), and in connection with the promotion of the supply of Homeopathic Treatments, made false or misleading representations that the vaccine publicly available in Australia for whooping cough (“Vaccine”) is of a particular standard or quality in contravention of sections 29(1)(a) and (b) of the ACL,
by publishing, or causing to be published, on the website www.homeopathyplus.com.au (“Website”):
c) from 1 January 2011 until around 26 April 2012, an article entitled “Whooping Cough – Homeopathic Prevention and Treatment” (the “First Whooping Cough Article”) in which a representation was made to the effect that the Vaccine is short-lived, unreliable and no longer effective in protecting against whooping cough; 
d) from 11 January 2013 until around March 2013, an article entitled “Whooping Cough – Homeopathic Prevention and Treatment” (the “Second Whooping Cough Article”) in which a representation was made to the effect that the Vaccine may not be the best solution for, is of limited effect, and is unreliable at best, in protecting against whooping cough; and 
e) from 3 February 2012 until around March 2013 an article entitled “Government Data Shows Whooping Cough Vaccine a Failure” (the “Government Article”) in which a representation was made to the effect that the Vaccine is largely ineffective in protecting against whooping cough;
when, in fact, the Vaccine is effective in protecting a significant majority of people who are exposed to the whooping cough infection from contracting whooping cough. 
2 The First Respondent and the Second Respondent have in trade or commerce:
a) engaged in conduct that was misleading and deceptive or was likely to mislead and deceive, in contravention of section 18 of the ACL;
b) in connection with the supply or possible supply of Homeopathic Treatments, and in connection with the promotion of the supply of Homeopathic Treatments, made false or misleading representations that the Homeopathic Treatments are of a particular standard or quality in contravention of section 29(1)(a) and (b) of the ACL; and
c) in connection with the supply or possible supply of Homeopathic Treatments, and in connection with the promotion of the supply of Homeopathic Treatments, made false or misleading representations that Homeopathic Treatments have a use or benefit in contravention of section 29(1)(g) of the ACL,
by publishing, or causing to be published, on the Website:
d) the First Whooping Cough Article;
e) the Second Whooping Cough Article; and
f) the Government Article in conjunction with the Second Whooping Cough Article,
in which representations were made to the effect that there was a reasonable basis, in the sense of an adequate foundation, in medical science to enable it or them (as the case may be) to state that Homeopathic Treatments are a safe and effective alternative to the Vaccine for the prevention of whooping cough when, in fact:
g) there is no reasonable basis, in the sense of an adequate foundation, in medical science to enable the First Respondent and the Second Respondent to state that Homeopathic Treatments are safe and effective as an alternative to the Vaccine for the Prevention of Whooping Cough; and 
h) the Vaccine is the only treatment currently approved for use and accepted by medical practitioners in Australia for the prevention of whooping cough.
The judgment states
1. The first respondent, Homeopathy Plus! Australia Pty Ltd (“Homeopathy Plus”), is an Australian proprietary company limited by shares which was registered in New South Wales on 20 November 2008. It is not in dispute that, among other activities, Homeopathy Plus sells homeopathic products and treatments through its website at www.homeopathyplus.com.au (“the Website”). 
2. The second respondent, Mrs Frances Sheffield, has been the sole director of the first respondent since 18 November 2009. It is common ground that she is the author of three articles which she uploaded onto the Website, namely: (a) “Whooping Cough – Homeopathic Prevention and Treatment” (“First Whooping Cough Article”); (b) “Whooping Cough – Homeopathic Prevention and Treatment” (“Second Whooping Cough Article”); and (c) “Government Data Shows Whooping Cough Vaccine a Failure” (“Government Article”) (collectively referred to as the “Three Articles”). 
3. The domain name of the Website is registered to Mrs Sheffield and her husband. 
4. The applicant (“the ACCC”) seeks declarations, injunctions, penalties and ancillary orders in respect of alleged contraventions by the Respondents of the Australian Consumer Law (“ACL”), being Schedule 2 to the Competition and Consumer Act 2010 (Cth) (“CCA”). The CCA and ACL came into force on 1 January 2011. The contraventions are said to arise from statements made in the Three Articles published on the Website. 
5. This judgment addresses only the question of whether the alleged contraventions have taken place. As foreshadowed before the trial and confirmed at the hearing with the parties, the hearing covered all matters relating to the alleged contraventions of the ACL, the circumstances in which they occurred and the severity of those contraventions. The issues addressed by these reasons are similarly confined. That approach leaves open the option to the parties for evidence to be led otherwise in mitigation of penalty and the like, and for separate submissions to be made as to the pecuniary penalty, injunctive relief and other final orders sought by the ACCC aside from the declaratory relief sought which I will grant for the reasons I explain in the conclusion. 
6. The dispute centres upon the proper characterisation of the representations made in the Three Articles and whether those representations were made in trade and commerce. The ACCC alleges that the Three Articles contained false, misleading and/or deceptive representations contrary to ss 18 and 29(1)(a), (b) and (g) of the ACL concerning: (a) the effectiveness of the Vaccine publicly available in Australia for the prevention of whooping cough; and (b) the safety and effectiveness of homeopathic treatments as an alternative to the Vaccine for the prevention of whooping cough. 
7. No allegations are made with respect to any statements as to the effectiveness of homeopathic treatments for the treatment, as opposed to prevention, of whooping cough, or as a complementary treatment more broadly, or in respect of any vaccine other than that for Whooping Cough (“the Vaccine”). 
8. Section 18 of the ACL provides that: A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. 
9. Section 29 has more specific elements and relevantly provides that:
(1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services in connection with the promotion by any means of the supply or use of goods or services: 
(a) make a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use; or 
(b) make a false or misleading representation that services are of a particular standard, quality, value or grade; or ... 
(g) make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits;... 
10. The ACCC alleges that Homeopathy Plus and Mrs Sheffield engaged in the impugned conduct as principal contraveners. For the reasons I set out below, I find the contraventions of the ACL alleged by the ACCC to be established.

22 December 2014

Australian Health Spending

'Health expenditure Australia 2012–13: analysis by sector' from the Australian Institute of Health and Welfare indicates that
In 2012–13, $55.9bn was spent on hospitals in Australia, $52.9bn on primary health care and $29.9bn on other areas of health spending.
Capital expenditure accounted for a further $8.6bn.
All funders increased their expenditure on Hospitals between 2002-03 and 2012-13. Growth in state and territory government funding, at $10.6bn (a 78.6% increase), was almost double the growth of Australian Government expenditure ($5.4bn, up 37.2% growth).
Non-government expenditure grew by $5.6bn (88.6%).
Over the decade, total spending on Primary health care grew from $32.7 billion to $52.9 billion. Primary health care spending is shared relatively evenly between Australian Government (about 43%) and non-government sources (about 41%).
In 2012-13, the Australian Government accounted for $17.9 billion, or nearly 60%, of the total recurrent expenditure in Other recurrent areas of health care. Individuals provided the next largest source of funds, with an expenditure of $5.4 billion in 2012-13.
In the past 5 years, from 2008-09 to 2012-13, the share of recurrent expenditure on Primary health care has increased slightly from 37.1% to 38.1%, whereas expenditure on Other recurrent areas has declined marginally from 22.2% to 21.5%. There has been no clear trend in the Hospitals proportion over this time, beginning at 40.5% in 2008-09 and ending at 40.3% in 2012-13.
The ratio of Australian Government expenditure on health to tax revenue was 24.8% in 2012-13, down from 26.9% in 2011-12.
The ratio of state and territory government expenditure to tax revenue rose from 17.7% in 2002-03 to 24.5% in 2012-13.
The ratio of non-government health expenditure to individual net worth varied throughout the decade, beginning the period at 0.61% in 2002-03 and ending the period at a decade high of 0.66% in 2012-13.
In 2002–03, medical services attracted the highest share of primary health care funding at 21.9%. This was a change from previous years, where benefit-paid pharmaceuticals had tended to attract the most spending. This change occurred as a result of a decline in the benefit-paid pharmaceuticals proportion between 2009–10 and 2012–13.
The share of recurrent funding for All other medications in 2002–03 was 10.2%. Over the decade, the share increased to 17.5% in 2012–13. All other medications includes pharmaceuticals for which no Pharmaceutical Benefits Scheme (PBS) or Repatriation Pharmaceutical Benefits Scheme (RPBS) benefit was paid, such as private prescriptions, under copayment prescriptions and over-the-counter medicines.
Public health and Other health practitioner services attracted the smallest share of primary health-care funding, at around 5% and 10%, respectively, across the decade.
The share of primary health care funding for dental services was 18.1% in 2012–13. This share gradually declined to 15.9% in 2007–08 before rising to 17.2% in 2009–10. In 2012–13, the share was 16.4%.

21 December 2014

Normalisation

The 57 page  2014 Public Perceptions of Privacy and Security in the Post-Snowden Era report [PDF] from the Pew Research Center Internet Project comments
More than a year after contractor Edward Snowden leaked documents about widespread government surveillance by the NSA, the cascade of news stories about the revelations continue to register widely among the public. Some 43% of adults have heard “a lot” about “the government collecting information about telephone calls, emails, and other online communications as part of efforts to monitor terrorist activity,” and another 44% have heard “a little.” Just 5% of adults in our panel said they have heard “nothing at all” about these programs.
The Center's conclusions are - 
Widespread concern about surveillance by government and businesses
Perhaps most striking is Americans’ lack of confidence that they have control over their personal information. That pervasive concern applies to everyday communications channels and to the collectors of their information—both in the government and in corporations. For example: 91% of adults in the survey “agree” or “strongly agree” that consumers have lost control over how personal information is collected and used by companies. 88% of adults “agree” or “strongly agree” that it would be very difficult to remove inaccurate information about them online. 80% of those who use social networking sites say they are concerned about third parties like advertisers or businesses accessing the data they share on these sites. 70% of social networking site users say that they are at least somewhat concerned about the government accessing some of the information they share on social networking sites without their knowledge.
Yet, even as Americans express concern about government access to their data, they feel as though government could do more to regulate what advertisers do with their personal information
80% of adults “agree” or “strongly agree” that Americans should be concerned about the government’s monitoring of phone calls and internet communications. Just 18% “disagree” or “strongly disagree” with that notion. 64% believe the government should do more to regulate advertisers, compared with 34% who think the government should not get more involved. Only 36% “agree” or “strongly agree” with the statement: “It is a good thing for society if people believe that someone is keeping an eye on the things that they do online.”
In the commercial context, consumers are skeptical about some of the benefits of personal data sharing, but are willing to make tradeoffs in certain circumstances when their sharing of information provides access to free services.
61% of adults “disagree” or “strongly disagree” with the statement: “I appreciate that online services are more efficient because of the increased access they have to my personal data.” At the same time, 55% “agree” or “strongly agree” with the statement: “I am willing to share some information about myself with companies in order to use online services for free.” There is little confidence in the security of common communications channels, and those who have heard about government surveillance programs are the least confident. The public feels most secure using landline phones, least secure on social media
Across the board, there is a universal lack of confidence among adults in the security of everyday communications channels—particularly when it comes to the use of online tools.
Across six different methods of mediated communication, there is not one mode through which a majority of the American public feels “very secure” when sharing private information with another trusted person or organization: 81% feel “not very” or “not at all secure” using social media sites when they want to share private information with another trusted person or organization. 68% feel insecure using chat or instant messages to share private information. 58% feel insecure sending private info via text messages. 57% feel insecure sending private information via email. 46% feel “not very” or “not at all secure” calling on their cell phone when they want to share private information. 31% feel “not very” or “not at all secure” using a landline phone when they want to share private information.
Americans’ lack of confidence in core communications channels tracks closely with how much they have heard about government surveillance programs.
For five out of the six communications channels we asked about, those who have heard “a lot” about government surveillance are significantly more likely than those who have heard just “a little” or “nothing at all” to consider the method to be “not at all secure” for sharing private information with another trusted person or organization.
Most say they want to do more to protect their privacy, but many believe it is not possible to be anonymous online
When it comes to their own role in managing the personal information they feel is sensitive, most adults express a desire to take additional steps to protect their data online: When asked if they feel as though their own efforts to protect the privacy of their personal information online are sufficient, 61% say they feel they “would like to do more,” while 37% say they “already do enough.” Just 24% of adults “agree” or “strongly agree” with the statement: “It is easy for me to be anonymous when I am online.”
When they want to have anonymity online, few feel that is easy to achieve.
Just 24% of adults “agree” or “strongly agree” with the statement: “It is easy for me to be anonymous when I am online.” Not everyone monitors their online reputation very vigilantly, even though many assume others will check up on their digital footprints Some people are more anxious than others to keep track of their online reputation. Adults under the age of 50 are far more likely to be “self-searchers” than those ages 50 and older, and adults with higher levels of household income and education stand out as especially likely to check up on their own digital footprints. 62% of adults have ever used a search engine to look up their own name or see what information about them is on the internet. 47% say they generally assume that people they meet will search for information about them on the internet, while 50% do not. However, just 6% of adults have set up some sort of automatic alert to notify them when their name is mentioned in a news story, blog, or elsewhere online.
Context matters as people decide whether to disclose information or not
One of the ways that people cope with the challenges to their privacy online is to employ multiple strategies for managing identity and reputation across different networks and transactions.  ... users bounce back and forth between different levels of disclosure depending on the context. This survey also finds that when people post comments, questions or other information, they do so using a range of identifiers—using a screen name, their actual name, or posting anonymously.
Among all adults: 59% have posted comments, questions or other information online using a user name or screen name that people associate with them. 55% have done so using their real name. 42% have done so anonymously. In some cases, the choices people make about disclosure may be tied to work-related policies.
Among employed adults: 24% of employed adults say that their employer has rules or guidelines about how they are allowed to present themselves online. 11% say that their job requires them to promote themselves through social media or other online tools.
Different types of information elicit different levels of sensitivity among Americans 
Social security numbers are universally considered to be the most sensitive piece of personal information, while media tastes and purchasing habits are among the least sensitive categories of data. Social security numbers, health info and phone conversations among the most sensitive data. At the same time that Americans express these broad sensitivities toward various kinds of information, they are actively engaged in negotiating the benefits and risks of sharing this data in their daily interactions with friends, family, co-workers, businesses and government.
Relatively few report negative experiences tied to their digital footprints.
11% of adults say they have had any bad experiences because embarrassing or inaccurate information was posted about them online. 16% say they have asked someone to remove or correct information about them that was posted online.

Chills

The PEN American Center Chilling Effects: NSA Surveillance Drives U.S. Writers to Self-Censor [PDF] report from last year offers a perspective on responses to news of pervasive surveillance in the US.

The report was based on 528 interviews conducted online with PEN members between 10 and 21 October 2013.

The Center comments -
1. There is widespread concern among writers about government surveillance. Few dismiss it as a trivial or unavoidable matter.
  • 85% say they are worried about the current levels of government surveillance of Americans – 51% very worried and 35% somewhat worried 
  • 73% say they have never been as worried about privacy rights and freedom of the press as they are today – 46% very close and 27% somewhat close 
  • 89% are concerned about the government’s secret program to collect and analyze metadata on phone calls, e-mails, browsing, and other activity of Americans – 66% very concerned and 23% somewhat concerned 
  • 83% are following news stories about US government surveillance – 33% very closely and 50% somewhat closely 
  • There is outright rejection of the notions that:
  • “Surveillance is something that all governments do – there’s really nothing new or worrisome about what’s happening now.” Nearly 8 in 10 (78%) reject this view. 
  • “The government’s primary concern is monitoring communication with foreigners – it’s not really interested in domestic eavesdropping.” Nearly 8 in 10 (78%) reject this view. 
  • “Widespread data surveillance is an absolutely essential tool for the government in the fight against terrorism.” Nearly 3 in 4 (73%) reject this view.
2. Writers are especially concerned about the impact of government surveillance on their ability to do their jobs.
  • The vast majority of survey participants self-described as writers (86%); the remainder are editors, translators, and agents. A comparison of responses of writers vs. not writers indicated no substantive differences in opinions or experiences, so we use the term “writers” throughout this report as a general descriptor of survey participants. 
  • 81% are very concerned about government efforts to compel journalists to reveal sources of classified information (another 15% are somewhat concerned) 
  • 76% believe that increased government surveillance is especially harmful to writers because it impinges upon the privacy they need to create freely
3. As a consequence, self-censorship among writers is now commonplace. Sizeable – perhaps even alarming – numbers say they have altered their behavior (or seriously considered doing so) in the following ways because they thought the government was monitoring their communications:
  • Curtailed or avoided activities on social media – 28% have done this and 12% have seriously considered it (40% total) 
  • Deliberately steered clear of certain topics in personal phone conversations or e-mail messages – 24% have done this and 9% have seriously considered it (33% total) 
  • Avoided writing or speaking on a particular topic – 16% have done this and 11% have seriously considered it (27% total) 
  • Refrained from conducting Internet searches or visiting Web sites on topics that may be considered controversial or suspicious – 16% have done this and 12% have seriously considered it (27% total) 
  • Took extra steps to cover or disguise digital footprints – 13% have done this and 11% have seriously considered it (24% total)  Took extra precautions to protect the anonymity of sources – 14% have done this and 6% have seriously considered it (20% total) 
  • Declined opportunities to meet – physically or electronically – people who might be deemed security threats by the government – 3% have done this and 4% have seriously considered it (6% total)
4. Writers are self-censoring because they genuinely believe that government surveillance has touched them directly. Sizeable numbers are either certain or suspect that the following things have happened to them in the past year or two:
  • Donations and organizational affiliations have been monitored by the government – 16% are certain this has happened and 41% suspect it (57% total) 
  • Metadata from phone calls or e-mails has been collected and analyzed by the government – 17% are certain this has happened and 34% suspect it (51% total) 
  • Things like Internet searches, Web site visits, and book purchases have been tracked by the government – 13% are certain this has happened and 36% suspect it (49% total) 
  • A personal profile has been built by the government that diagrams relationships and connections to others – 10% are certain this has happened and 23% suspect it (32% total) 
  • The actual content of phone calls or e-mails has been listened to or read – 7% are certain this has happened and 20% suspect it (28% total) 
  • The numbers of writers who say they are certain or suspect that these things have happened to “a friend or colleague” in the past year or two are even higher:
  • Donations and organizational affiliations have been monitored by the government (64% total) 
  • Metadata from phone calls or e-mails has been collected and analyzed by the government (65% total) 
  • Things like Internet searches, Web site visits, and book purchases have been tracked by the government (63% total) 
  • A personal profile has been built by the government that diagrams relationships and connections to others (56% total) 
  • The actual content of phone calls or e-mails has been listened to or read (54% total)
5. Writers believe that the data-trove of personal information now being collected about Americans will be mishandled by the government. This is not to say that they think data are being collected for the express purpose of wrongdoing; but rather that massive data collection of this nature will inevitably lead to mismanagement or abuse, regardless of intent.
  • Virtually all (92%) believe that personal data collected by the government will be vulnerable to abuse for many years because it may never be completely erased or safeguarded – 68% very close and 24% somewhat close 
  • The overwhelming majority (88%) also say that what really worries them is that a vast amount of data is already in government hands and vulnerable to bureaucratic bungling, misuse, and partisan abuse – 64% very close and 23% somewhat close
6. In qualitative interviews conducted prior to the online survey, PEN members indicated that they are cautious when communicating with people outside the US, because they believe those exchanges are especially susceptible to government monitoring. The survey, which asked respondents to respond to hypothetical scenarios, indicates that such concerns are widely shared: 
  • 4% say it is very likely – and 48% that it is realistically possible – that their own e-mail message to someone abroad who was affiliated with an anti-American organization would end up being read by government officials 
  • 39% say it is very likely – and 52% that it is realistically possible – that a phone call they would make to someone living in an area of the world known for its antipathy toward the US would be monitored and recorded by government officials 
  • 35% say it is very likely – and 49% that it is realistically possible – that if they were to (hypothetically) publish a story or poem depicting anti-American militants in a positive light, it would place them on a list of people to be tracked and monitored by government officials 
  • Even among writers who communicate regularly (weekly or more than that) with people who live outside the US, the percentages in the three hypothetical scenarios described above are virtually the same
7. We hypothesized that writers would be more sensitized and worried about the issue of government surveillance than the general public. Comparisons with recent Pew Research Center surveys of the general public support this hypothesis.
  • By a margin of 22 percentage points, writers are more likely than the general public to disapprove of “the government’s collection of telephone and Internet data as part of anti-terrorism efforts” – 66% vs. 44%. Only 12% of writers approve, compared with 50% of the general public. There’s also a wide gap in the percentage saying “not sure” – 22% of writers vs. 6% of the general public. 
  • Similarly, writers are far more likely than the general public to say they would feel that their “personal privacy had been violated” if they knew that the federal government had collected data about their telephone or Internet activity – 81% vs. 63%. Just 10% of writers say they would not feel that their privacy was violated, compared with 36% of the general public. Again there’s a wide gap in the percentage saying “not sure” – 10% of writers vs. 1% of the general public. 
  • 78% of writers believe that most Americans are unconcerned and uninformed about government surveillance
8. Writers are troubled by other ways in which people’s privacy has eroded – their unease is not restricted to surveillance by the US government. 
  • 57% are very concerned about corporations gathering data to track and analyze consumer behavior and preferences (and another 33% are somewhat concerned, for a total of 89%). 
  • 78% are very concerned about technology companies collaborating with the government to provide vast amounts of personal information on Americans (and another 17% are somewhat concerned, for a total of 94%). 
  • And – not surprisingly given that this is a survey of PEN members – the overwhelming majority of writers surveyed (72%) is also very concerned about suppression of free speech and press freedom in countries other than the US (and another 24% are somewhat concerned, for a total of 97%).
9. The vast majority of these findings are consistent across demographic categories – whether young or old; journalist or not; frequent communicator overseas or not; professional or associate member status; female or male; or those who follow the news very closely and those who don’t. Here are a few areas where noteworthy differences were found:
  • Younger writers (under 50 years old) sometimes differ from their older counterparts (50+). They are less likely to express concern about surveillance and more likely to take precautionary measures in their work. Younger writers are:
  • o Less likely to “very closely” follow news stories about government surveillance efforts within the US (22% vs. 37%) 
  • Less likely to be “very concerned” about corporations gathering data to track and analyze consumer behavior and preferences (47% vs. 60%) 
  • Less likely to say this statement comes “very close” to their view: Most Americans are unconcerned and uninformed about government surveillance (24% vs. 36%) 
  • Less likely to be certain or suspect that a personal profile has been built by the government that diagrams their relationships and connections to others (25% vs. 35%) 
  • More likely to have done or seriously considered avoiding writing or speaking on a particular topic (38% vs. 23%) 
  • More likely to have done or seriously considered curtailing or avoiding activities on social media (51% vs. 36%) 
  • More likely to have done or seriously considered refraining from conducting Internet searches or visiting Web sites on topics that may be considered controversial or suspicious (37% vs. 24%) 
  • More likely to have done or seriously considered taking extra steps to cover or disguise digital footprints (35% vs. 20%)
  • Journalists differ from the non-journalists (other types of writers and/or editors, agents, and translators) in that they are more attuned to issue around sources. Journalists are:
  •  More likely to be “very concerned” about government efforts to compel journalists to reveal sources of classified information (93% vs. 78%) 
  • More likely to have taken extra precautions to protect the anonymity of sources (30% vs. 11%) 
  • Writers who communicate frequently with people living outside the US differ from those who do not. Frequent communicators are more likely to have self-censored in these three ways and to believe the government has monitored them: (Comparison is between those who communicate overseas weekly or more vs. a few times a month or less)
  • More likely to have done or seriously considered avoiding writing or speaking on a particular topic (34% vs. 22%) 
  • More likely to have done or seriously considered deliberately steering clear of certain topics in personal phone conversations or e-mail messages (38% vs. 29%) 
  • More likely to have done or seriously considered taking extra precautions to protect the anonymity of sources (29% vs. 13%) 
  • More likely to be certain or suspect that metadata from their phone calls or emails has been collected and analyzed by the government (58% vs. 47%) .

Unions Royal Commission

The two volume interim report by the Royal Commission into Trade Union Governance and Corruption states that it is structured as follows -
Part 2: The legal landscape
69. Part 2 sets the legal landscape by providing an overview in respect of the duties of officers of registered organisations, the use of union resources in elections, and financial reporting obligations on registered organisations.
Part 3: Generic slush funds
70. Part 3 considers funds with variety of purposes. The most notorious fund, the Australian Workers’ Union – Workplace Reform Association, is considered in Chapter 3.2.
71. Funds of this kind pose significant governance issues. The officials who operate those funds owe statutory and general duties to the union. On the other hand, the officials deploy their energy and sometimes their employer’s resources for the benefit of the fund. This gives rise to actual or potential conflicts of interest. Often these funds have no or no adequate record keeping. Management decisions are made informally or without due process. Directors’ or shareholders’ meetings are not held. If they are held, minutes are not kept. Transactions are often effected by cash. When records are maintained, they are often maintained in a haphazard fashion.
72. The Australian Workers’ Union – Workplace Reform Association case study concerned allegations of fraudulent and other misconduct by Bruce Wilson and Ralph Blewitt, former officials of the AWU. A recommendation is made that this Interim Report be referred to the relevant prosecuting authorities in Western Australia and Victoria to consider whether Bruce Wilson and Ralph Blewitt may have committed criminal offences. Findings are made that Julia Gillard did not commit any crime and was not aware of any criminality on the part of these union officials.
73. Industry 2020 is another generic fund. It was associated with Cesar Melhem, the former State Secretary of the Victorian branch of the Australian Workers’ Union (AWU). Industry 2020 organised lucrative fundraisers by using the name, influence and resources of the AWU. The AWU or its members received no recompense or benefit from Industry 2020’s activities. The funds raised were deployed to support political causes associated with Mr Melhem, including members of the Labour Unity faction of the Australian Labor Party (to which Mr Melhem belonged) and the Asmar campaign for the HSU.
74. Other generic funds examined in Part 3 are Building Industry 2000, IR 21 and TLATA. The issues arising for consideration in relation to these funds include the fiduciary duties of union officials, conflicts of interest and corporate governance.
Part 4: Fighting funds
75. These are the most common type of relevant fund considered by the Commission so far. Commonly an election fund is maintained by a union through amounts deducted automatically from the salaries of members and paid into a designated bank account. On its face there is nothing objectionable about such a fund. A member who decides voluntarily to contribute to an election fund is free to do so.
76. However, a number of problems with such funds in practice have emerged. Often there is no or insufficient disclosure to contributors or union members as to the activities of the fund. Record keeping is commonly very limited. The voluntariness of members’ decisions to contribute to a number of funds is questionable. A fund may give rise to a lopsided election or no election at all. An incumbent may have a disproportionate benefit if he or she has significant resources which are not available to his or her opponent. Candidates for election can close their eyes to the sources, propriety and legality of funding received for their campaigns and disclaim responsibility for that funding on the basis of ignorance.
Part 5: Income protection and redundancy funds
77. Funds of this kind are significant sources of union revenue. The two funds considered in Part 5, the BERT Fund (Chapter 5.2) and the Protect scheme (Chapter 5.3), both illustrate the problems that arise when unions are too closely connected with the governance of important income protection and redundancy funds.
Part 6: Superannuation
78. The two case studies considered by the Commission in this Part vividly illustrate the difficulties which employees face in light of the current lack of choice of superannuation fund available to workers under an enterprise agreement.
79. Chapter 6.2 concerns Paul Bracegirdle’s Herculean attempts to choose his own superannuation fund, rather than having his superannuation contributions made to TWUSUPER. TWUSUPER is a fund associated with the Transport Workers’ Union (TWU): approximately $2 million has flowed from TWUSUPER to the TWU over the last two financial years.
80. Chapter 6.3 concerns Katherine Cole’s similar struggle. She was required to join the Labour Union Co-operative Retirement Fund (LUCRF), an industry superannuation fund associated with the National Union of Workers (NUW). Her attempts to get out of the fund were rebuffed. Ultimately, Katherine Cole she took the drastic step of resigning her position, rather than continuing in LUCRF.
Part 7: Training funds
81. The only fund examined in this Part of the report is TEACHO, a fund associated with the TWU. Issues arising in connection with other funds, such as METL, a fund associated with the Maritime Union of Australia, will be considered in more detail next year.
82. As with many of the other funds already mentioned, the relevant arrangements in respect of TEACHO came into existence as part of the enterprise agreement bargaining process. In part the problem with TEACHO derives from a lack of clarity as to the appropriateness or efficacy of its functions. Another problem involves the fact that Toll agreed in a side deal, negotiated at the same time as its EBA with the TWU, to make payments to TEACHO provided that the TWU in return supplied reports to Toll concerning the activities of competitors. The information required for the purposes of the reports would be obtained by the TWU in pursuit of its statutory functions as a trade union. Toll sought to keep this information suppressed at the hearings of the Commission, an application which was refused. In his evidence Damian Sloan of Toll, a very impressive witness, accepted that Toll had agreed to provisions in the EBA relating to TEACHO in order to achieve industrial peace.
Part 8: CFMEU
83. Part 8 is the largest part of the Interim Report. It contains a number of case studies associated with the CFMEU. Together they raise fundamental issues about the regulation of the building and construction industry, and the culture of wilful defiance of the law which appears to lie at the core of the CFMEU.
84. Chapter 8.2 concerns Boral Ltd. Boral is a multinational company listed on the ASX. It was the victim of a ‘black ban’ imposed by the CFMEU. The evidence of the conduct of the CFMEU and its officers towards Boral and its customers has led to findings that blackmail and contraventions of the Competition and Consumer Act may have been committed.
85. Chapter 8.3 concerns Cbus, which manages employees’ superannuation. Senior executives at Cbus, namely Ms Butera and Ms Zanatta, covertly provided contact information for Cbus members employed by the Lis-Con companies to Mr Brian Parker, the NSW State Secretary of the CFMEU. This was done at the request of Mr Parker, who wanted the information to cause employees of Lis-Con to be personally contacted to make trouble with their employer.
86. Chapter 8.4 deals with the question of whether, on 27 March 2013, Mr Darren Greenfield, a CFMEU official, made a death threat to Brian Fitzpatrick, another CFMEU official. The finding is that the conversation was as Mr Fitzpatrick described in his evidence.
87. Chapter 8.5 deals with the unsavoury views held and expressed by Mr Parker about another member of the Branch Committee of Management who had been compelled to give evidence to the Commission and who, when called, gave truthful evidence.
88. Chapter 8.6 addresses two case studies relating to the unacceptable way in which the CFMEU has dealt with its records, including those which may have been relevant to the Terms of Reference.
89. Chapter 8.7 is devoted to the Universal Cranes case study. It raises similar issues to those in respect of Boral, and thus involves issues of extortion, unlawful threats and breaches of the Competition and Consumer Act 2010 (Cth). Officials at the CFMEU in Queensland embarked on a campaign against it by banning it from sites, and threatening to continue the ban unless Universal Cranes signed the CFMEU’s form of enterprise bargaining agreement.
90. The Hindmarsh case study is dealt with briefly in Chapter 8.8. There are two reasons for brevity at this stage. The first concerns the fact that there are Federal Circuit Court proceedings due to be heard shortly which raise some of the issues raised in the Commission hearings. The second is that, in relation to the remaining discrete issues, it is desirable to afford the CFMEU and its officers a further opportunity to provide submissions which they have so far chosen not to provide.
91. Chapter 8.9 concerns the treatment of FWBC Inspectors by CFMEU officers. There was evidence of intimidating, abusive and verbally violent treatment towards FWBC inspectors by members of the CFMEU. In one case the verbal violence was captured on video. It involved a CFMEU official standing in close proximity to an FWBC inspector and screaming abuse of a particularly insulting and violent kind. Other evidence, equally insulting although not captured on video, related to the treatment of FWBC inspectors at the Barangaroo site.
92. Chapter 8.10 concerns the Pentridge Prison site and activity by the Victorian branch of the CFMEU. The activity in question included the making of abusive and threatening calls by union officials, and the application of improper pressure on subcontractors to sign the CFMEU’s form of enterprise bargaining agreement and on workers to become CFMEU members.
93. Chapter 8.11, which is extremely brief, relates to allegations made by Andrew Zaf. As those allegations remain under investigation, no findings are made at this stage.
94. The final chapter in Part 8 is Chapter 8.12. It concerns relations between the Lis-Con companies and the CFMEU in Queensland.
Part 9: HSU
95. The only issue relating to the HSU considered in this Interim Report concerns the activities of the HSU Victorian No 1 Branch (now named the Health Workers’ Union). A number of officials at this branch have alleged that their Right Entry Permit tests were undertaken by others on their behalf. This issue is considered and resolved in Chapter 9. As noted above, other issues concerning the HSU which have also been the subject of evidence before the Commission to date will be addressed in a future report.
Part 10: TWU
96. A number of funds associated with the TWU or its officials – namely the McLean Forum, the New Transport Workers’ Team, TWUSUPER and TEACHO – are dealt with in the Parts summarised above.
97. This Part also considers questions relating to the NSW Branch of the TWU’s electoral roll. For a number of years the NSW Branch of the TWU provided documents to the ALP which overstated the number of members of the NSW Branch eligible to vote in a ballot for an office in the union. The significance of this matter is that the TWU was exercising voting rights at ALP conferences based on an inflated number of members.
Part 11: SDA
98. This case study involves the then Secretary-Treasurer of the Queensland Branch of the Shop, Distributive, Allied and Employees’ Association terminating the employment of an organiser because – on the evidence, although this was not the stated reason – the organiser had decided to run against him at a forthcoming election. Confidential Report
99. There is a recommendation that one volume of this Interim Report be kept confidential. On 12 December 2014 an order was made directing that any information in the Confidential Report that might enable a person named in that report who has given evidence before the Commission to be identified not be published. That recommendation and that order were made because the confidential volume deals with threats to witnesses. It is necessary for that volume to be confidential in order to protect the physical well-being of those witnesses and their families. This is unfortunate, because the confidential volume reveals grave threats to the power and authority of the Australian state.
Recommendations for referral
100. It is recommended that this Interim Report and any other relevant materials be referred, pursuant to s 6P of the Royal Commissions Act 1902 (Cth) and every other enabling power, to the:
(a) Commonwealth Director of Public Prosecutions in order that consideration may be given to whether:
(i) the CFMEU should be charged with and prosecuted for cartel conduct contrary to ss 44ZZRF and 44ZZRG of the Competition Policy Reform (Victoria) Act 1995 (Vic) (Chapter 8.2); (ii) Darren Greenfield should be charged with and prosecuted for using a carriage service to make a threat and/or to menace, harass or cause offence contrary to ss 474.15 and 474.17 of the Criminal Code (Cth) (Chapter 8.4); and (iii) each of John Perkovic, Luke Collier, Rob Kera, Brian Parker and Michael Greenfield should be charged with and prosecuted for obstruction of a Commonwealth public official contrary to s 149.1 of the Criminal Code (Cth) (Chapter 8.9); (iv) each of Diana Asmar, David Eden, Darryn Rowe, Nick Katsis, Saso Trajcevski-Uzunov and Lee Atkinson should be charged with and prosecuted for making a false statement in an application or recklessly making a false statement contrary to ss 136 and 137 of the Criminal Code (Cth) (Chapter 9); and (v) Kimberly Kitching should be charged with and prosecuted for aiding and abetting the contraventions of each of Diana Asmar, David Eden, Darryn Rowe, Nick Katsis, Saso Trajcevski-Uzunov and Lee Atkinson (Chapter 9);
(b) Australian Securities and Investments Commission in order that consideration may be given to whether:
(i) Michael Ravbar should be charged with and prosecuted for breaches of his duty as an officer contrary to s 184 of the Corporations Act 2001 (Cth), and whether a civil penalty proceeding should be commenced and carried on against Michael Ravbar for contraventions of ss 180, 181 and 182 of the Corporations Act 2001 (Cth) (Chapter 5.2); and (ii) the exemptions granted to employee redundancy funds by ASIC Class Order CO 02/314 remain appropriate (Chapter 5.2);
(c) Fair Work Building Inspectorate in order that consideration may be given to whether proceedings should be commenced and carried on against:
(i) each of Michael Ravbar and Peter Close for coercion to the existence, exercise or refusal to exercise a workplace right contrary to s 343 of the Fair Work Act 2009 (Cth) (Chapter 8.7); (ii) each of Michael Ravbar, Peter Close and Andrew Sutherland for taking adverse action against another person as a result of the existence, exercise or refusal to exercise a workplace right contrary to s 340 of the Fair Work Act 2009 (Cth) (Chapter 8.7); (iii) each of Anton Sucic and Ivan Dadic for taking adverse action against a person because they were not a member of an industrial association contrary to s 346 of the Fair Work Act 2009 (Cth) (Chapter 8.10); and (iv) each of John Setka and Gerard Benstead for coercion by allocating duties to a particular person contrary to s 355 of the Fair Work Act 2009 (Cth) (Chapter 8.10);
(d) Australian Competition and Consumer Commission in order that consideration may be given to whether proceedings should be commenced and carried on against:
(i) the CFMEU for conspiring with others to contravene s 45E of the Competition and Consumer Act 2010 (Cth) contrary to ss 45E and 76(1)(e) of that Act (Chapter 8.7); and (ii) each of Michael Ravbar, Peter Close, Andrew Sutherland, Ben Loakes and the CFMEU for a secondary boycott for the purpose of causing substantial loss or damage contrary to s 45D of the Competition and Consumer Act 2010 (Cth) (Chapter 8.7);
(e) General Manager of the Fair Work Commission, or a delegate of the General Manager, in order that consideration may be given to whether a proceeding should be commenced and carried on against the TWU for a pecuniary penalty order for failing to hold records for 7 years contrary to s 231 of the Fair Work (Registered Organisations) Act 2009 (Cth) (Chapter 10.2);
(f) Australian Information Commissioner in order that consideration may be given to whether the Queensland Branch of the Shop, Distributive, Allied and Employees’ Association contravened National Privacy Principle 10.1 or any provision of the Privacy Act 1988 (Cth) (Chapter 12);
(g) New South Wales Director of Public Prosecutions in order that consideration may be given to whether Darren Greenfield should be charged with and prosecuted for common assault contrary to s 61 of the Crimes Act 1900 (NSW) (Chapter 8.4);
(h) South Australian Director of Public Prosecutions in order that consideration may be given to whether:
(i) John Perkovic should be charged with and prosecuted for assault contrary to s 20(1) of the Criminal Law Consolidation Act 1935 (SA) (Chapter 8.9); (ii) John Perkovic should be charged with and prosecuted for accosting or impeding another in a threatening manner contrary to s 20(1)(e) of the Criminal Law Consolidation Act 1935 (SA) (Chapter 8.9); and (iii) John Perkovic should be charged with and prosecuted for the common law offence of assault (Chapter 8.9);
(i) Queensland Director of Public Prosecutions in order that consideration may be given to whether:
(i) each of Michael Ravbar and Peter Close be charged with and prosecuted for extortion contrary to s 415 of the Criminal Code 1899 (Qld) (Chapter 8.7); and (ii) each of Michael Ravbar and Peter Close be charged with and prosecuted for threats to cause detriment to another person contrary to s 359 of the Criminal Code 1899 (Qld) (Chapter 8.7);
(j) Victorian Director of Public Prosecutions in order that consideration may be given to whether:
(i) each of Ralph Blewitt and Bruce Wilson should be charged with and prosecuted for obtaining financial advantage by deception and conspiracy to commit an offence contrary to ss 82 and 321 of the Crimes Act 1958 (Vic) (Chapter 3.2); (ii) John Setka and Shaun Reardon should be charged with and prosecuted for blackmail contrary to s 87 of the Crimes Act 1958 (Vic) (Chapter 8.2); and (iii) Shaun Reardon should be charged with and prosecuted for being an accessory to blackmail contrary to s 323 of the Crimes Act 1958 (Vic) (Chapter 8.2);
(k) Western Australian Director of Public Prosecutions in order that consideration may be given to whether each of Ralph Blewitt and Bruce Wilson should be charged with and prosecuted for:
(i) fraudulent conduct contrary to s 409(1) of the Criminal Code (WA); and (ii) conspiracy to commit an indictable offence contrary to s 558 of the Criminal Code (WA) (Chapter 3.2); and
(l) Divisional Branch Management Committee of the New South Wales branch of the Construction and General Division of the CFMEU in order that consideration may be given to whether any action should be taken against Brian Parker under r 51 of the Rules for the Construction and General Division of the CFMEU to investigate whether Mr Parker:
(i) has engaged in gross misbehaviour; (ii) has grossly neglected his duty; (iii) has conversed in an abusive or derogatory manner towards any person; (iv) has made statements which impugn the character and integrity of fellow officials; or (v) should be removed from office (Chapter 8.4 and 8.5).