In 2015 the European Union hailed its new Transparency Register and disclosure system as a major step forward in shedding greater light on lobbying activities across the European Union (EU).

In support of the Register and its associated processes, European Ombudsman Emily O’Reilly stated that transparency and related issues have “come right in from the margins and onto centre stage.

In 2017 the Australian Foreign Influence Transparency Act followed the EU lead, and indeed the global trend towards greater transparency.

However, whilst Australia followed suit it didn’t include any significant enforcement measures within the Act. This is about to change.

The Foreign Influence Transparency Scheme (Charges imposition) 2017 Bill currently before Parliament proposes to impose a charge for applications for registration or renewal of registration under the 2017 Act and seeks to impose criminal offences for non-compliance.

The Bill provides inter alia, that “ …..The scheme will provide transparency of the nature and extent of influence activities (sic) undertaken by persons acting on behalf of foreign actors in Australian political and governmental processes.  The scheme is intended to provide oversight of the many and varied ways in which foreign actors seek to exercise influence for the purpose of affecting political and governmental systems and processes, including the views of the Australian public on such matters. This will provide decision-makers and the Australian public with the information to accurately assess the interests being brought to bear in such processes. …..”

It is not clear as to how the term  “activities “ will be defined and experience shows that this will be something that will inevitably be tested in the Courts as part of their Statutory Interpretation processes.

For example, would such activity extend to government tendering processes? We can therefore expect a period of some uncertainty and no doubt a few early headlines.

Similarly, lawyers are likely to have a field day in terms of the interpretation of “influence”. Some actions will be readily defined, and identifiable, as attempts at “influence” and as such unlawful.

There is no question that the Australian public has to be protected against subversive foreign influence, but how this will play out in the commercial cut and thrust of major deals is another question.

In many major projects financed by internationalised capital, the lines blur continually between the political, the commercial and the governmental processes.

Clear legislative guidance will be required to help practitioners negotiate what could be a minefield of potential reputational as well as financial risk.

There is a pattern emerging here when one also considers the recent changes to the Foreign Investment rules offering greater protections to the Australian public in relation to key property, energy and infrastructure assets.

I would opine that all of these changes may be in large part a reaction to Chinese investments in Australia which have become increasingly prevalent over the past decade.

High levels of such investment have also come with a corresponding level of unease in some quarters highlighted recently by a furore over the $506 million 99 year lease of Darwin  Port by a Chinese company.

What is clearly the case however, is that investors and those representing them will require new and urgent, risk management approaches to ensure compliance with the proposed legislation as this crouching tiger legislation will shortly have teeth.