The Foreign Relations Bill will undermine our universities’ global status

The bill, which would enable Foreign Minister Marise Payne to overturn Victoria’s deal with China, has also been extended to public universities. Picture: Sean Davey

The Morrison government had an important win last week when the Senate backed its funding reforms for university places. It now faces a battle on another front over a bill for a government veto of arrangements with foreign partners. The bill would undermine the international competitiveness of our universities and divert resources from teaching Australian students. The proposal requires a fundamental rethink.

It is right for the commonwealth to be concerned about the management of foreign relations at a time of enormous geopolitical complexity. It wants the nation to speak with one voice and is acting on the warnings of our security agencies about the risk of foreign interference. This is reflected in new laws that include stronger measures to prevent espionage and requirements to disclose foreign influence.

The government is taking this one step further with its Foreign Relations Bill, which was introduced last month and is the subject of hearings today and tomorrow by the Senate Foreign Affairs, Defence and Trade Committee. The Bill is motivated by disquiet over agreements by state and territory governments with other nations. A prime example is the Victorian government’s 2018 memorandum of understanding with the Chinese National Development and Reform Commission to work together on China’s Belt and Road initiative.

The bill would enable the Foreign Minister to overturn this or any future like arrangement. It is based on the idea that the commonwealth has exclusive responsibility for setting foreign policy and representing Australia internationally. This may give rise to legal challenge. The Constitution establishes external affairs as a shared responsibility between the commonwealth and states, and indeed the states have a long history of global engagement on trade, investment and other matters. The bill may trespass into state functions that are immune from commonwealth control.

What is surprising is that the bill has also been extended to public universities. It is not clear why this occurred. Indeed, universities appear to have been added as an afterthought given the lack of consultation and attention to the costs of compliance.

It is notable that the bill does not extend to other organisations that routinely enter partnerships with foreign organisations, such as private universities, other not-for-profits and corporations.

The legislation is objectionable on many fronts when it comes to universities. One problem is its sheer scope. It will apply to any “written arrangement, agreement, contract, understanding or undertaking” between an Australian public university and any foreign government or foreign entity associated with a foreign government. This includes arrangements between Australian universities and a foreign university lacking “institutional autonomy”.

Minor arrangements that pose no concern will fall within the law. The arrangements do not need to be legally binding and might simply be an informal understanding to do something with a foreign partner. There are no monetary or other thresholds for which arrangements are included, unlike regimes for foreign acquisitions. This means the bill will cover inconsequential communications such as an email exchange agreeing on the timing of a panel for an academic conference.

The number of affected arrangements is vast. At the University of New South Wales alone, a conservative estimate is that more than 10,000 arrangements will be included. It is possible the total number of present arrangements across the higher education sector will exceed 500,000.

Every one of these arrangements will need to be notified to the government within six months. Systems will also need to be put in place so all new arrangements are captured and notified within 14 days. This will be time-consuming and expensive at a time when universities are cash-strapped, and the pandemic has caused thousands of job losses. Resources will need to be redirected to legal compliance from classroom teaching and research.

The government will have the power to veto or vary these arrangements, including by way of retrospective effect on agreements that have been in force for decades. The Foreign Minister can do so without giving reasons. She need only form the view the arrangement adversely affects Australia’s foreign relations or is inconsistent with Australia’s foreign policy.

These terms lack clarity, with the bill even providing that it extends to foreign policy that has not been released or approved. The ability to apply secret criteria that can change from minister to minister will make it impossible for the community to know which arrangements might be overturned. It will also undermine the ability of universities and their partners to enter new arrangements with confidence.

The Foreign Relations Bill looms as a major, negative impact on the nation’s universities and students. Where arrangements are vetoed or varied, universities may be liable to pay compensation to foreign parties that have entered an agreement in good faith. Foreign governments and entities will also be wary about entering new partnerships with Australian universities.

They may instead turn to universities in other democratic nations such as the US, Canada and the UK. As in these nations, it is important that our universities retain the independence to make arrangements and form partnerships free of government control.

George Williams is a deputy vice-chancellor and professor of law at the University of NSW.