15 Jul 2009

Managing legislative instruments: some guidance for agencies from the new Report

by Philip Harrison

A recent review of the Legislative Instruments Act 2003 (Cth) provides some valuable guidance for agencies in managing their legislative instruments.

The Commonwealth Attorney-General's committee to review the operation of the Legislative Instruments Act 2003 (Cth) has now reported.

The Report into the operation of the Legislative Instruments Act will now be considered by the Government, before it makes a legislative response to its recommendations.

In the meantime, agencies could profitably adopt some of the Report's guidance on managing legislative instruments.

Undertake appropriate consultation before making a legislative instrument

It is unlikely that changes to the Act will be made mandating specific consultation requirements in developing legislative instruments, or making the validity of legislative instruments dependent on consultation. The Report favours neither approach. In any case, a legislative response would be difficult to frame and near impossible to enforce.

However, the Report was not silent on the practical value of undertaking appropriate, substantive consultation before making a legislative instrument. As was noted in the Report, more needs to be done by rule-makers to fulfil their existing responsibilities under the Act to ensure that satisfactory consultation does take place.

The obvious, practical benefit of satisfactory consultation is an increased awareness among stakeholders, and those likely to be affected by the legislative instrument, of its intended effects. Consultation also carries with it the prospect of improvement in the quality of the legislative instrument that is eventually made, following the input of those consulted, who may often have a significant appreciation of the likely impact (and, perhaps, any unintended consequences) of the legislative instrument on their activities.

By consulting properly before a legislative instrument is made, agencies could conceivably save themselves the effort of having to subsequently amend the instrument to ensure its more efficient application, or to eliminate unintended effects that may have been identified through an appropriate consultation process.

The Office of Best Practice Regulation's Best Practice Regulation Handbook outlines the seven best practice consultation principles applicable to all agencies, and is a sound starting point for any agency developing a consultation strategy.

If it is intended to be a legislative instrument, make it clear that it is

The Act can fix on the sometimes elusive concept of an instrument "of a legislative character" which requires registration. However, legal opinions sometimes differ on whether or not something is of a legislative character.

For example, in Roche Products Pty Limited v National Drugs and Poisons Schedule Committee (2007) 163 FCR 451, the Federal Court decided that an instrument was of a legislative character where rules already set out in an Act were to apply, even though the instrument itself did not contain any rules. Unfortunately, up to that time, instruments of that kind had been widely thought not to require registration as legislative instruments. The consequence is that instruments of a like kind, made since the commencement of the Act, may not be taken to be enforceable - and those made before the commencement of the Act may be taken to have been repealed.

This lack of clarity surrounding the definition of a legislative instrument was addressed in the Report by supporting the current practice of explicitly declaring whether or not an instrument is a legislative instrument in its enabling legislation. In addition, it was suggested that agencies review legislation that they administer to examine the desirability of including declarations about whether or not existing instruments are legislative instruments.

Agencies would do well to follow the recommended approach of ensuring that, if an instrument is intended to be a legislative instrument, it is declared so in the legislation which enables the making of the instrument. Otherwise, the treatment of that instrument could be left to the problematic definitions section of the Act, or, ultimately, the view of the courts.

Ensure that each legislative instrument is clear, intelligible, and legally effective

Section 16 of the Act requires the Secretary of the Attorney-General's Department to cause steps to be taken to promote the legal effectiveness, clarity and intelligibility of legislative instruments. However, the Act is silent on drafting standards for the preparation of explanatory statements and compilations.

As the Committee observed in its Issues Paper, experience has shown that the quality of explanatory statements and compilations provided by rule-makers can vary considerably. Yet, such accompanying material forms an important part of the Federal Register of Legislative Instruments (FRLI), established under the Act.

The Report recommended that the Attorney-General's Department (AGD) monitor and report to the Attorney-General on standards for the drafting of legislative instruments and the preparation of compilations. Agencies identified as not meeting appropriate standards may be required to arrange training for their officers as agreed with the AGD.

Agencies would be well advised to focus their own efforts on ensuring that each legislative instrument is as clear, intelligible, and legally effective as it can be. This will avoid the prospect of AGD-imposed drafter training, and, more importantly, ensure that their legislative instruments are as comprehensible as possible, so ensuring a greater likelihood of compliance with their terms (or, at least, reducing the prospect of non-compliance through a lack of understanding). Those efforts should also be directed to the accompanying explanatory statements, which are often relied upon to understand the legislative instrument and to assess its purpose.

Review all legislative instruments to establish they have a continuing purpose

The Report concluded that agencies are not sufficiently active in reviewing and culling legislative instruments for which they are responsible. Legislative instruments should continue in force for only so long as they are needed; all legislative instruments should be subject to ongoing review and culling; and agencies should make arrangements to manage the commencement and ongoing operation of sunsetting provisions.

Without a rigorous approach to reviewing all legislative instruments, not only will the FRLI become clogged, but the risk of inconsistencies arising between more recent, and potentially redundant, legislative instruments increases.


While the Government's response to the Report will not be made for some time yet, and the legislative response to recommendations for changes to the Act will only then follow, agencies would be well served to study the Report to refine their day-to-day approach to the production and maintenance of their legislative instruments.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.