Adi Limited & Ors and Commissioner for Equal Opportunity & Ors [2005] WASAT 259 (28 September 2005)

Adi Limited & Ors and Commissioner for Equal Opportunity & Ors [2005] WASAT 259 (28 September 2005) - WASAT 2005 case summary — Zoe

[31]

1 This decision concerned an application by ADI Limited and various related companies, major defence contractors, to be exempted from the operation of s 37 and s 39 of the Equal Opportunity Act 1984 (WA), so that ADI and its related companies could fulfil their obligations under defence contracts that they have with the Australian Government without breaching the Act. Those contracts required the applicants to access American technology, which they could do only if they complied with American regulations prohibiting "nationals" of some countries from accessing that technology. The applicants could be in breach of the Equal Opportunity Act 1984 when they comply with their contractual obligations; in particular their conduct could constitute racial discrimination.

2 The Tribunal granted the exemption. Traditionally, the authorities provide that for an exemption application to be granted, the applicant must show that the exemption would be within the scope and purpose of the Act and that it would further the objects of the Act. The application could not be motivated primarily by economic interests - it had to be motivated by other sound reasons consistent with the objects of the Act. In line with a growing tendency in Western Australia and the other States to consider the public interest in deciding an application for exemption, the Tribunal in this matter looked to the public interest as the framework against which the objects of the Act were tested. On this basis, although there would be some commercial advantage or benefit to ADI in granting the exemption, the Tribunal found that the public interest in ADI fulfilling its defence contract obligations to the Australian Government in accordance with the requirements of the Australian Government, out-weighed any possible commercial benefit or advantage it would receive and it outweighed the need to expressly further the objects of the Act.

3 The terms of the exemption limit its application to conduct necessary to enable ADI and its related companies to undertake defence projects where they are required to access American controlled technology and where the otherwise unlawful conduct is a last resort and unavoidable. The exemption is for a term of 5 years from 28 September 2005.

[44]

9 ADI provided a substantial amount of evidence to the Tribunal in support of its application. That evidence was primarily given by way of three affidavits of Mr Andrew Ian McKibbin, the Commercial Manager of ADI. Mr McKibbin's affidavits also had attached to them a substantial number of annexures including the United States International Traffic in Arms Regulations (ITARs) and United States Export Administration Regulations (EARs) and extensive technological information. Mr McKibbin gave oral evidence at a hearing on 6 and 7 April 2005 and was subject to cross-examination by both Mr Ritter SC and Mr Rosales-Castaneda.

10 ADI also provided to the Tribunal four ring binder folders of information, including the documents that it had discovered, to the parties, which included extensive correspondence with US sponsors, the Commonwealth of Australia, the Australian Defence organisation and various others. The documents also included examples of Technical Assistance Agreements (TAAs) and Manufacturing Licences (sometimes Licensing) Agreements (MLAs) together with amendments to them.

11 The objecting parties filed affidavits from Ms S Mayman, Secretary of the Trades and Labour Council of Western Australia (also known as Unions WA), Mr M Newhouse, Chairperson of Western Australians for Racial Equality and Ms Y Henderson, the Commissioner for Equal Opportunity (the Commissioner).

12 The Tribunal also had before it a bundle of authorities, written submissions from ADI and from Mr Ritter and Mr Rosales-Castaneda and further submissions from ADI in reply. Each counsel also gave detailed and comprehensive oral opening and closing submissions to the Tribunal.

13 A representative of the Commonwealth, the Australian Government Solicitor based in Perth, Mr Macliver, was present throughout directions hearings leading up to the hearing and through most of the hearing. Although not a party, the Commonwealth at times made submissions regarding various aspects of the proceedings, including confidentiality of some of the material before the Tribunal.

14 On 31 March 2005 the Tribunal heard an application from ADI to hold the hearing of this matter in private. The Tribunal declined that application but did make a suppression order with respect to some parts of Mr McKibbin's written and oral evidence. See ADI Limited & Ors and Equal Opportunity Commission & Ors [2005] WASAT 49.

15 The facts set out in these reasons for decision are gleaned from those affidavits and other documents together with that oral evidence, and are accepted by the Tribunal as being a proper and accurate representation of ADI's position.

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16 The applicants (ADI Limited, ADI Munitions Pty Ltd, ADI Advanced Systems Pty Ltd, Thales Underwater Systems Pty Ltd and Thales Training and Simulation Pty Ltd) manufacture and provide a broad spectrum of technologies, services and systems, both in the defence and commercial sectors but primarily in the defence sector. They have numerous contracts with the Australian government through the Department of Defence and indirectly through other companies in Australia and the United States of America.

17 In 1989, the accumulated assets of the Department of Defence Production were corporatised into Australian Defence Industries Pty Ltd. That name was changed in January 1996 to "ADI". In 1999, the Department of Defence approved the sale of that company to Transfield Holdings Ltd and Thomson-CSF (now Thales).

18 Thales SA (France) is one of the world's largest systems and electronics groups with its headquarters in France. It operates in Australia as Thales Underwater Systems Pty Ltd and Thales Training and Simulation Pty Ltd. Thales Underwater Systems has 360 employees and is involved in projects related to sonar technology, especially for submarines and surface ships. Thales Simulation and Training employs 173 people and produces simulators for military and civilian aircraft, sea vessels and armoured vehicles. In HMAS Stirling, in Western Australia, Thales Training and Simulation Pty Ltd has a Collins class submarine simulator for use by the Royal Australian Navy.

19 Each of the applicant companies is incorporated in Australia. ADI Group Holdings Pty Ltd is the parent company of ADI Limited. ADI Group Holdings Pty Ltd is a 50:50 joint venture between Thales SA (France) and Transfield Holdings Ltd. ADI has two active subsidiaries: ADI Advanced Systems Pty Ltd and ADI Munitions Pty Ltd.

20 ADI Munitions Pty Ltd holds land and facilities at Benalla (Victoria). The cash flow from this operation forms security for the lenders to the joint venture between Thales SA (France) and Transfield Holdings Pty Ltd. As such, ADI is one of Australia's largest defence, engineering and systems contractors, by reference to employee numbers, revenue and the number of contracts ADI has with the Australian government (Second McKibbin affidavit: 25/11/04 [10]). ADI conducts business throughout Australia and around the world and teams with leading international companies.

21 ADI has five operating divisions (Second McKibbin affidavit: 25/11/04 [11] and [12):

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26 To obtain access to US controlled technology necessary for ADI to be able to perform its obligations under defence related contracts with the Australian government, ADI enters into agreements or obtains licences (TAAs or MLAs) under US law which make that technology available to it.

27 That access to US technology is regulated by various US laws; the relevant ones here are the EARs and the ITARs. Those US regulations prohibit persons who are dual nationals, or third country foreign nationals of some countries, from having access to the US controlled technology. Those US regulations also require that US defence related technology cannot be provided to a company outside of the US unless the provider of the technology is a US incorporated company and the company to which the technology is to be provided enters into an agreement with that US incorporated company, known as a US sponsor. The agreements must oblige the foreign company to comply with relevant US regulations.

28 Therefore to obtain access to the US technology, ADI must enter into and comply with agreements known as TAAs and MLAs. ADI is currently party to 49 of these agreements and they affect projects which generate annual sales in excess of $400 000 000 or 57% of ADI's annual turnover (First McKibbin affidavit: 7/7/04 [9]).

29 The other party to each of the TAAs and MLAs is a US sponsor which provides the US controlled material or US sourced technology to ADI. These sponsors include major US defence companies and companies with international operations such as Lockhead Martin Corporation, Baron, Rolls Royce (USA) and Hughes Missile Systems.

30 Under the TAAs and MLAs, the US sponsors seek and are obliged to pass on their US law obligations to ADI by way of contractual obligations. The contracts made between the US sponsor and ADI are subject to the ITARs which are regulated by the US Department of State. The interpretation and regulation of compliance with the provisions of the ITARs is therefore controlled by the US Department of State. Without assuming the obligation to comply with ITAR, ADI would not be allowed access to the US controlled technology, which it says is fundamental to its fulfilment of its defence contract obligations to the ADF. ADI is therefore party to agreements which oblige it to ensure that US defence related technology is not accessed by dual nationals or third country foreign nationals of certain countries. These terms require ADI to discriminate on the ground of nationality in the area of employment. This conduct potentially infringes s 37 and s 39 of the EO Act.

[58]

31 The Tribunal finds that, to be able to do the work required of it under its contracts with the ADF, ADI needs access to the US controlled technology which it obtains through agreements with US sponsors which are regulated by US regulations, specifically EARs and ITARs. The agreements that ADI has with the US sponsors and that are relevant to this application are TAAs and MLAs.

32 Under the ITARs (and the TAAs and MLAs), ADI must not allow people who are dual nationals and some people who are third country foreign nationals to access the US controlled technology; nor can ADI transfer any data or defence services or equipment to those people.

33 Mr McKibbin gave evidence and we accept that the issue of potential breach of the EO Act has arisen only in recent years. Prior to August 2002, ADI proceeded on the understanding that Australian citizens, whether or not they held another passport and were therefore dual nationals, were entitled and eligible to access US controlled technology. In August 2002, one of the US sponsors pointed out to ADI that dual national employees were not entitled to access US controlled technology without the agreement of the United States authorities regardless of whether or not one of their nationalities was Australian (T16 - T21 and First McKibbin affidavit: 7/7/04 [12] - [50]).

34 Subsequent to that, and as a consequence of it, ADI voluntarily disclosed its potential breach to the US regulatory authorities, through the channel of the relevant US sponsor company. Ultimately, on 5 March 2004, the US government closed its file on that breach and since then ADI has applied what it believes to be the appropriate interpretation of the ITARs. Consequently, ADI believes it is in breach or could potentially be in breach of s 37 and s 39 of the EO Act, in that it needs to discriminate on the basis of race when it employs people, if it is to comply with the US government's interpretation of the ITARs.

35 ADI is a project-based company - this means that it moves its employees from project to project depending on their relevant skills or background and also depending on their ability and qualification to access US controlled technology. ADI also employs or seeks to employ people with specific qualifications and experience to work on particular projects.

36 Nationals of some specified countries are absolutely barred from accessing US controlled material. However, there is a discretion in the US Department of State to allow nationals of some countries to be included, depending on the nature of the technology and the nationality (or dual nationality) of the person involved. As ADI is a project-based company, employees and prospective employees need to disclose their nationality for each project. Obtaining approval for a particular nationality or a particular person to work on a project involving US controlled material does not necessarily mean that approval will be given for that nationality or that person on the next project.

37 Therefore, August 2002 was a turning point. It was the first time that ADI became aware of the US State Department interpretation of ITARs with respect to the meaning of dual nationality. ADI negotiated with the US sponsor regarding voluntary disclosure of the breach. The US definition of national then became clear to ADI and it was necessary to change its approach to nationality. During this process of negotiating the voluntary disclosure with the US sponsor, ADI had no direct contact with the US Department of State. Everything was done through the US sponsor company. It took several years to resolve, during which ADI was not permitted to amend other TLAs and MLAs (T21 and First McKibbin affidavit: 7/7/04 [45]). And it provides the background as to why this application is before us.

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42 In response to a question from counsel, Mr McKibbin confirmed that marital status is also relevant. Mr McKibbin was quite clear in his evidence that ADI has little knowledge of what is actually considered and what is vitally relevant when the US State Department makes its decision. Ultimately, in fact, the absolute discretion as to whether access will or will not be granted, lies with the US President (First McKibbin affidavit: 7/7/04 [46]). However, Mr McKibbin was of the view that the sensitivity of the technology with respect to the particular project was very important and in particular the sensitivity that the US government attaches to it (T26).

43 There was evidence that each stage of amendment (either adding a country or a particular individual) took three to nine months for processing by the US State Department (T24 - T27). The amendment to a TAA or MLA becomes effective when the last party, usually the US sponsor company, signs it and sends it back to the US State Department. ADI provided to the Tribunal a number of amended TAAs and MLAs which showed the path to approval. Therefore, if ADI is required to go through both amendment processes, it can take up to 18 months.

44 Mr McKibbin gave evidence that while an application for amendment to the TAA or MLA was being processed by the US government, the relevant person would be re-deployed in another area where they did not have to access US controlled technology. Therefore, the application for amendment process did not or has not to date, held up progress of a project; it has merely meant that the person that ADI might perceive to be the best qualified to work on it is not available to ADI for that project at that time (T27).

45 Mr McKibbin gave evidence, though unsubstantiated by any real data, that it is a matter of inevitable fact that there will be a growing number of situations where dual nationals and third country foreign nationals will be required to work on ADI projects. Mr McKibbin stated that there are inadequate numbers of Australians appropriately and adequately qualified to work in these areas and that inevitably amendments to TAAs and MLAs will be required to facilitate ADI meeting its contractual obligations (T93 - T97). The Tribunal accepts this evidence as representing a likely scenario.

46 There was evidence that the current process for any employee who will be accessing or likely to access US controlled technology is that ADI asks them to disclose their nationality regardless of whether they are a prospective employee or existing employee (T48). Currently, employees' security and identity tags are colour-coded depending on their level of access to US controlled material (T49).

47 Mr McKibbin gave evidence that the Canadian government has in place an exemption from these requirements. He informed the Tribunal that there has been a similar arrangement developed for Australia but that it has been languishing in the US Congress since 2003 (T61) and that it is unlikely to proceed. The ITAR exemption held by Canada covers only 20-40% of work done under TAAs and does not cover any work done under a MLA. It would therefore be of limited use for ADI if it were granted, and ADI does not believe it would resolve what it perceives to be the fundamental dilemma that brings it before this Tribunal (T79).

[137]

54 ADI contends that it needs the exemption so that it can comply with its contractual obligations to the Australian government (the ADF in particular). ADI says it is concerned that it is in breach of the EO Act and will potentially be in breach in the future because of the requirements to comply with the US regulations with respect to US controlled technology subject to the ITARs. ADI says that its purpose in seeking the exemption is so that it can comply with its contractual obligations.

55 Mr Power on behalf of ADI, advised that ADI was "on the horns of a dilemma" in that it could not comply with both its obligations to its US sponsors and under the EO Act. He submitted that the only solution for ADI was therefore to seek an exemption, however he conceded, an exemption in limited terms to be granted only to the extent necessary for ADI to fulfil its obligations under the ITARs and EARs.

56 The effect of an exemption is to make lawful what would otherwise be unlawful as being prohibited by the EO Act. The EO Act gives no guidance as to the facts or circumstances to be taken into account by the Tribunal in the exercise of its power of exemption under s 135. Mr Power argues that accordingly, the Tribunal has an unfettered discretion in deciding whether or not to grant the exemption, however he concedes that in the exercise of that discretion the Tribunal must have recourse to the scope and purpose of the EO Act.

57 The inclusion of the exemption provision in the EO Act suggested, according to ADI, that Parliament envisaged certain situations and circumstances where discrimination could be appropriate or necessary. Mr Power relied on an extract from the Parliamentary Debates (Hansard), and in particular the second reading speech and related debates on the EO Act. Mr Rosales-Castaneda and Mr Ritter also relied on an extract from Hansard to emphasise their views that the discretion is fettered. That extract from Hansard is discussed below at [98]. The nature of the Tribunal's discretion is pivotal as to whether or not this exemption should be granted.

58 ADI quoted Stevens & Ors v Fernwood Fitness Centres Pty Ltd (1996) EOC 92-782 where the Victorian Equal Opportunity Tribunal discussed the principles to be applied when considering exemption applications. Counsel for the objecting parties also relied on Stevens & Ors v Fernwood Fitness Centres Pty Ltd (supra). Essentially, that case sets out the principles on which exemption applications can be determined. It provides that the Tribunal, when considering exemption applications, should have regard to:

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61 ADI was at pains to emphasise that it sought an exemption only to allow compliance with the US regulations and not to provide ADI with a wide discretion to merely disregard the EO Act. The exemption, ADI claims, would be intended as a last resort to avoid an intractable conflict between the requirements of the US regulations and the EO Act so that, although the exemption would not further the objects of the Act, the effect that it has on the objects of the Act, namely racial discrimination, is "strictly limited" (Applicants' Submissions, [22]).

62 In its submissions in reply, ADI refuted the submissions on this issue set out by the objecting parties. ADI argued that the discretion to grant the exemption should be construed broadly so as to permit the Tribunal to have regard to public interest considerations of the kind that underpin this application. ADI argued that any alternative construction would be inconsistent with the legislative scheme designed to allow the Tribunal maximum flexibility. ADI argued that this was reflected not only in the Parliamentary debates surrounding the introduction of the EO Act, but in the exercise of the exemption discretion by other tribunals in Australia and the growing tendency in those tribunals towards consideration of the public interest.

63 ADI contended that the exemption it seeks means that it would be required to prove as "a matter of objective fact" that the conduct against which a complaint could be made was necessary for compliance with ITARs and EARs and that only that type of conduct would be permissible within the terms of the exemption (Applicants' Submissions in Reply [3]).

64 ADI stated that it would continue to seek amendment to TAAs and MLAs as a first step, prior to reliance on the exemption, if granted (T43 and T94).

65 Whilst ADI acknowledged that the grant of an exemption would benefit it commercially this did not, in its view, detract from the strength of the public interest argument concerning national security and national and state economies.

66 ADI argued that it could not be safely inferred that any or all subsequent breaches of ITARs would be unpunished merely because the voluntary disclosure in August 2002 was ultimately accepted by the US government. That disclosure was made in accordance with reg 127.12 of the ITARs and ADI is of the view that the mitigating factors present were sufficient to warrant no further action being taken - primarily that ADI had proceeded in the past on a misconception of the meaning of "nationality" in the American context.

67 The objecting parties suggested that ADI would be better to seek agreement between the Australian and American governments rather than seeking an exemption. ADI argued that it is not its role to broker those kinds of negotiations and that it would be in fact virtually impossible for it to do so. It was ADI's view that the proper path for it to take should be to seek relief under domestic law, which it has done with this application for exemption.

68 ADI was also of the view that the actions or inactions of other defence industry companies regarding whether or not to seek an exemption provide no useful basis for any inference, and on that basis are irrelevant.

69 Mr Power emphasised to the Tribunal that the rightness or wrongness of the regime imposed by the US government under the ITARs and the EARs and therefore ultimately through the US sponsor companies, was not a matter on which ADI or the Tribunal should take a view. It is not for ADI to say whether the US approach is right or wrong; rather, it is a fact that these things apply to ADI regardless of the merit attaching to them. ADI, he contended, does not have any real choice in the matter. The use of US technology, which it was conceded is the best available, is a decision made by the Australian government. The means of getting that technology is controlled by the US government. ADI is caught in the middle.

70 Mr Power also put forward arguments with respect to nationality as opposed to national origin and those arguments are discussed below at [136] - [150] in the context of whether, despite the grant of an exemption, ADI's conduct would nonetheless amount to a breach of the Racial Discrimination Act 1975 (Cth).

71 Ultimately ADI contended that it was seeking the exemption primarily because it was trying to be a "good corporate citizen" (T92). It is of the view that even if an exemption is not required "at this minute" for its business operations in Western Australia, it needs to have the exemption available for the future when it would be required, because ADI did not want to continue operating on the basis of being in breach of the EO Act. Mr McKibbin (at T44) stated in response to a question in cross examination from Mr Rosales-Castaneda:

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72 Mr Rosales-Castaneda for the Commissioner and Mr Ritter SC for the Trades and Labour Council of Western Australia, Western Australians for Racial Equality and Ethnic Communities Council WA Inc (together referred to as "the objecting parties") provided comprehensive written and oral submissions to the Tribunal. Their submissions were supportive of each other, however, each had a different emphasis on different aspects which it is unnecessary to delineate for the purpose of these reasons. Briefly, a fundamental submission put to the Tribunal was that any exemption must further the objects of the EO Act and the discretion exercised by the Tribunal must be exercised within the scope, objects and purpose of the EO Act and not outside of that. On that basis, it was argued that the Tribunal either had no jurisdiction to entertain the application or could not grant it. In this sense, the objecting parties argued that an application which did not further the objects of the EO Act was so flawed that it is invalid and, if that first hurdle could not be met, the application could not be further considered.

73 Counsel argued that this application for exemption is wholly unrelated to the objectives or the scheme of the EO Act and the granting of it would result in a commercial advantage to ADI and it would therefore be inappropriate for the Tribunal to grant it. There had to be sound "social, economic or other reasons, consistent with the purpose of the Act, for the exercise of the discretion in favour of an exemption" - Re Golden Casket Exemption Application [2002] QADT 16. They argued that the primary purpose of ADI's application was to secure an economic advantage for ADI and that this strongly militated against the granting of the exemption sought (T109).

74 Mr Ritter and Mr Rosales-Castaneda submitted that the applications and exemptions which had been granted in other States and, in particular, in Victoria were of very limited, if any, significance or application to the present application. In particular, they pointed out that the Victorian application was unopposed and it did not involve consideration of submissions in opposition to the application, such as are being made to this Tribunal. Further, the Victorian decision did not fully consider whether ADI could comply with their agreements with the US sponsors without obtaining the exemptions sought (T123).

75 Mr Rosales-Castaneda was of the view that VCAT had misinterpreted the scope of "public interest" and its relevance and weight in applications of this kind. He also submitted that VCAT and the Queensland tribunal had gone beyond the objects of their anti-discrimination Acts and that all decisions relying on a broad interpretation of 'public interest' are wrong and "beyond the objects of" and "contrary to the spirit of their respective Acts" (Commissioner's Submissions [12(e)]). Mr Rosales-Castaneda contended that this Tribunal is "circumscribed to the objects of the EO Act" when considering "public interest" and that economic considerations are not relevant (Commissioner's Submissions [12(f)]). He continued with the proposition that the conditions imposed by VCAT on ADI are difficult to monitor and, in any event, ineffective in minimising the potential discriminatory effect that an exemption has or may have on prospective or existing employees and subcontractors.

76 Mr Rosales-Castaneda also submitted that any decision by the New South Wales Attorney General should be given little weight because the Anti-Discrimination Regulations 2004 (NSW) set out considerations not mentioned in the Equal Opportunity Regulations 1986.

77 There was argument that pursuant to s 109 of the Commonwealth Constitution the Tribunal should not grant this exemption, because if ADI did the things permitted by the exemption it would nonetheless be in breach of the Racial Discrimination Act 1975; and that therefore to grant the exemption would offend the supremacy of that Commonwealth Act under the Commonwealth Constitution. Further, it was argued that it is futile to grant an exemption where the conduct sought to be exempt is clearly prohibited by another law. The original application made by ADI to the Tribunal could well have constituted a breach of the Racial Discrimination Act 1975 because it requested an exemption to permit ADI to demand from prospective and existing employees details of their "national origin". National origin is relevant for breaches of s 9 and s 15 of the Racial Discrimination Act 1975. However, demanding details of one's "nationality" is not a breach of the Racial Discrimination Act 1975.

78 ADI amended its application for exemption, in consultation with Mr Macliver, the Australian Government Solicitor based in Perth, so that any reference to "national origin" was removed and replaced with the concept of "nationality". ADI took the view, supported by Mr Macliver, that this overcame any problems at a Commonwealth level, arising under the Racial Discrimination Act 1975. However, the application still included the requirement to demand from prospective employees and existing employees details of their place of birth. Mr Ritter, in particular, argued that the retention of details of place of birth was tantamount to requiring details of national origin and that further, because it is the US government that would interpret this information that was being demanded from prospective and current employees, there was scope for it to apply it as an issue of national identity rather than nationality. Therefore, according to Mr Ritter, there was a current breach of the Racial Discrimination Act 1975 by the retention of place of birth or alternatively it was tantamount to a breach because of the interpretation that would or could be placed on the information by the US government.

79 Mr Ritter relied on Macabenta v Minister of State for Immigration and Multicultural Affairs (1998) 90 FCR 202 where the Federal Court held that there was a distinction between "national origin" and "nationality" and that conduct relating to the former could constitute a breach of the Racial Discrimination Act 1975 but reliance on nationality was not a breach of either s 9 or s 15 of that Act. Mr Rosales-Castaneda extended this interpretation to say that there could also be a possible breach of s 17 of that Act whereby a potential claimant could arguably hold the US government liable because it had caused ADI to breach the Racial Discrimination Act 1975. The intention to discriminate not solely on the basis of nationality was indicated, according to Mr Ritter, because of the retention in the application of details of place of birth and citizenship in so far as it affected the person's status as a national under the laws of the United States of America. Further, Macabenta v Minister of State for Immigration and Multicultural Affairs (supra) was authority for the view that place of birth is an aspect of a person's national origin rather than their nationality. Therefore, on the basis that "place of birth" is an aspect of "national origin" and not "nationality", counsel for the objecting parties argued that the grant of an exemption would result in conduct by ADI which is in breach of the Racial Discrimination Act 1975 which does not include provision for an exemption of the kind sought by ADI.

80 Mr Ritter also argued that the granting of an exemption would lead to conduct which infringed international conventions, specifically the International Covenant on Civil and Political Rights and the International Convention on the Elimination of all Forms of Racial Discrimination, both of which are signed by the Australian government. The latter Convention is incorporated in the Racial Discrimination Act 1975 through the Schedule to that Act. Although Mr Ritter conceded that the existence of international obligations under international conventions does not give rise to a substantive obligation which conditions the exercise of statutory powers by a State body such as this Tribunal (unless incorporated by State Parliament into domestic legislation), he was of the view that the provisions of an international treaty to which Australia is a party is a relevant consideration in the exercise of statutory discretion by the Tribunal - Minister for Foreign Affairs and Trade v Magno [1992] FCA 566; (1992) 37 FCR 298 at 304.

81 Mr Ritter cautioned the Tribunal to be very careful about considering an exemption where "the reason for seeking the exemption is, in effect, the requirements of a foreign power, such as in this instance, the United States of America." (Submissions on behalf of various opposing parties [29]).

82 Mr Ritter was also sceptical that an exemption would achieve the stated purpose of the application. According to Mr Ritter, the stated purpose is to enable ADI to lawfully comply with the US regulations, which require ADI to discriminate on the basis of both nationality and national origin (T77). Mr Ritter was doubtful that the exemption would ensure compliance by ADI with the US regulations if it is sought solely on the basis of nationality, as he is of the view that the ITARs nonetheless require discriminatory conduct by ADI based on national origin. He drew this conclusion from cl 10.2 of the ITAR Guidelines for preparing agreements. Clause 10.2 provides:

[149]

83 Mr Ritter also contended that ADI's claims as to the consequences of not granting the exemption were not substantiated and there was no evidence to prove, or insufficient evidence to support, the assertions made by ADI in this regard. In particular, Mr Ritter was critical that there was no direct evidence from the Commonwealth of Australia to support the claims by Mr McKibbin.

84 All of the objecting parties were of the view that an exemption was not necessary and that it would not resolve the situation which ADI is in. They encouraged ADI to seek Commonwealth support and to encourage the Federal government to negotiate with the US government to authorise the conduct, rather than accepting to resolve the dilemma by seeking State by State exemptions from the impact of each State's equal opportunity laws. Further, they were critical that there was no actual evidence before the Tribunal as to what other companies in Australia in the defence industry are doing to resolve the same issues.

85 Mr Ritter argued strongly that the mere fact of a contractual obligation was not in itself a significant or proper reason to grant an exemption and that the grant of an exemption in Western Australia was not the only solution available to ADI - he argued that there were other measures that ADI could take. Mr Rosales-Castaneda supported this view. In his submissions and in cross examination of Mr McKibbin, Mr Rosales-Castaneda went through each aspect of the application, in particular each type of conduct mentioned, highlighting that the relevant issue which arose could either be dealt with administratively by ADI or by some other means rather than through exemption.

86 At T106, Mr Ritter sets out three reasons why ADI does not need the exemption. He pointed out that the contractual obligations of ADI to the US sponsors were not in absolute terms in that they allowed for amendments. The allowance for amendments was Mr Ritter's second point, however, we view it as an extension of the first point that the contractual obligation is not in absolute terms. Mr Ritter pointed out that no-one in Western Australia is currently facing discrimination if this exemption is not granted. He went on:

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100 The difference of opinion between the parties was whether the second reading speech and related debates on the EO Act demonstrated that Parliament intended the discretion to be broad enough to accommodate unforeseen circumstances and therefore to provide this Tribunal with maximum flexibility.

101 We refer to the last sentence of the extract from Hansard set out above. It is clear to this Tribunal that the Hon Attorney General was then referring to the specific exceptions made throughout the EO Act. He was not referring to s 135 of the EO Act which is the broad exemption power. By doing this, he leaves the interpretation of s 135 as very broad and as an "open discretion", as he indicates at the start. We reach this conclusion by reading that sentence in its context at the end of a separate paragraph, which paragraph refers to the exceptions throughout the EO Act, not s 135. The meaning, when the words are viewed in their context, seems to us to be quite clear. He notes there are no specified considerations which the Tribunal is required to apply and he does not limit that statement in the speech. He advises that it is a deliberate decision to provide for maximum flexibility in a new area. Whilst the Tribunal acknowledges that anti-discrimination legislation is now no longer a new area, the situations giving rise to it change and develop continuously. Therefore, our view is that the Hon Attorney General was not limiting the discretion in cl 135 of the Equal Opportunity Bill 1984 when referring to the exemptions in that final paragraph; rather he was referring to the limitations of the specific exceptions dotted throughout the Act such as in s 66L (3); s 66M (5); s 66N (3); s 66ZM; s 66ZN; s 66ZP; s 66ZQ.

102 The power to grant exemptions in s 135 therefore constitutes a very broad discretion vested in the Tribunal - it is not weighed down with criteria to guide its exercise because its purpose is to give the Tribunal flexibility, to accommodate situations that could not be envisaged in 1984 when the EO Act passed through Parliament; for example, a situation such as this, where a former government asset has been privatised and now seeks exemption from the operation of parts of the Act to allow it to continue to fulfil its obligations to the Australian government. We cannot speculate whether Parliament would now decide that these sorts of activities should be legislatively exempted or whether Parliament would decide that these sorts of matters should be subject to the full thrust of the EO Act; we do not know what Parliament's attitude would be today to such a broad discretionary power bereft of guidelines for its exercise. However, we do know that Parliament has chosen to leave that broad discretion in its form with this Tribunal, although it had the opportunity to restrict it when it passed the State Administrative Tribunal (Conferral of Jurisdiction) Amendment and Repeal Act 2004.

103 All parties submitted to the Tribunal that the test in Stevens & Ors v Fernwood Fitness Centres Pty Ltd (supra) is the appropriate test for this Tribunal to follow in the exercise of its discretion under s 135 of the EO Act, as setting out what we should look at and the steps we should take in the exercise of that discretion. Stevens & Ors v Fernwood Fitness Centres Pty Ltd is a Victorian case, heard by the former Equal Opportunity Tribunal in Victoria, prior to the establishment of the VCAT; we prefer to rely on the decision of this Tribunal, namely Jupiter Holdings Pty Ltd and Commissioner for Equal Opportunity [2005] WASAT 202, an exemption application before this Tribunal in March of this year. In its written reasons the Tribunal held at [33]:

[183]

106 Whilst we can distinguish Jupiter Holdings Pty Ltd and Commissioner for Equal Opportunity (supra) from this matter it does serve as a useful guide to the Tribunal as setting the framework for the exercise of our discretion.

107 The first question is whether the conduct sought to be exempted falls broadly within the spirit of one of the express exception provisions in the EO Act. In their submissions (Applicants' Submissions [20]) "the applicant companies" concede that they cannot invoke the 'spirit' of any exception. We accept that position.

108 The second part of the test is whether the grant of an exemption would fit into the scheme of the objectives of the EO Act. That is set out in the long title and in s 3 of the EO Act set out above.

109 In essence, this part of the test requires that the conduct the exemption relates to must amount to positive discrimination. The conduct sought to be made lawful needs to further the promotion of equality of opportunity in Western Australia. The onus in this matter is on ADI to show the Tribunal that the granting of the application could further or enhance the objects of the Act in this way. Counsel for the objecting parties submitted that this was pivotal to the success or failure of the application - that this Tribunal's discretionary function was limited by the need for the exemption, if granted, to further the objects of the EO Act. It is at this point that the law and rules with respect to the exercise of discretion and the tests set down in the relevant cases converge to put a serious onus on ADI to show to the Tribunal the benefits that would result from the granting of this exemption application. ADI took the view that the public interest in granting the exemption was a significantly greater consideration than the need for the exemption to further the objects of the EO Act (Applicants' Submissions in Reply [7]).

110 There are quite a number of examples of exemptions being granted where the exemption was in the nature of positive discrimination to enhance equal opportunity; we considered a large number of exemption decisions, for example, Re Stefan Tietz Application for Exemption (supra); Minister for Education and Commissioner for Equal Opportunity & Ors (1987) EOC 92-198, extended a further five years with no objecting party, at (1993) EOC 92-517; In the matter of an exemption by the National Australia Bank [1989] EOC 92-248, where the exemption was refused because its real purpose was publicity for the bank; City of Brunswick EOC 92-450 where the Victorian Equal Opportunity Board was not satisfied that it was reasonable and appropriate to use an exemption to gather information during a trial period of setting aside a public pool for exclusive use by Muslim women, as there were other ways of obtaining the information without breaching the Act. In that case, the exemption was also refused because there were other ways of determining the matter without excluding men from using a public swimming pool; Stevens & Ors v Fernwood Fitness Centres Pty Ltd (supra) where the exemption was granted to allow a women only gymnasium; Minister for Education and Commissioner for Equal Opportunity & Ors (1993) EOC 92-517; Re RMIT [2000] VCAT 409, where a tertiary institution sought an exemption to allow scholarships for women only and to advertise certain positions for women only. In that case, VCAT held that all circumstances must be considered including whether there is some overriding public interest to justify the grant of the exemption. VCAT held that an exemption in that case would promote the objects of the Act, that is to promote the acceptance and recognition of everyone's right to equality and opportunity. VCAT held that not only was granting the exemption consistent with the objects of the relevant Act, but there was considerable public interest in what was being sought. Further the Tribunal held that the disadvantage to men is not so great that it would justify refusal. In Boeing Australia Holdings Pty Ltd & Ors [2003] QADT 21, Boeing was granted an exemption from the Queensland Tribunal in much the same circumstances as are before this Tribunal with respect to ADI, on the basis that amongst other things the exemption was in the community interest. There were also issues of national security to consider. The Tribunal noted that the potential loss of work if the exemption was not granted would have an adverse effect on Boeing and their Australian workforce, which would, in turn, have an impact on the national economy and so that the defence capability of Australia could be compromised; Boeing Australia Holdings Pty Ltd & Ors [2003] VCAT A362, where in a very brief decision after consideration of the relevant papers and without a hearing that Tribunal granted the exemption on the basis that it was "in the community interest."

111 It is clear that in this case, the grant of the exemption would not fit within the objects of the EO Act. However, the issue for the Tribunal is whether despite this flaw, there is a public interest that should be taken into account in considering the application and what weight that public interest consideration should carry - in fact, whether that public interest overrides the exercise of the discretion to grant or refuse the application for exemption, particularly where the exemption would otherwise be outside of the scope and purpose of the EO Act. There has been movement in other States of Australia towards an overriding public interest test and that has in fact been applied by this Tribunal, for example, in Jupiter Holdings Pty Ltd and Commissioner for Equal Opportunity (supra) at [47] and [48] the Tribunal looked at balancing the major commercial advantage available to the applicant for exemption in that case and whether that was diluted by a consideration of the public interest:

[185]

112 That second paragraph, in particular, provides the basis on which Jupiter Holdings Pty Ltd and Commissioner for Equal Opportunity (supra) can be distinguished from this application - essentially by the weight given to the public interest and therefore the effect of the public interest on the application. In addition, to grant the exemption in Jupiter Holdings Pty Ltd and Commissioner for Equal Opportunity would have put that caravan park in a unique position in Australia (unlike in this matter where there are similar exemptions already granted) and to grant it would have opened the floodgates Australia wide, ultimately negating the effect of the EO Act in the provision of caravan park accommodation.

113 There are many facets to this application. There would be a commercial advantage for ADI if the exemption is granted but that commercial advantage is, it appears to us, the ability to continue to operate in the market where it currently operates. There is no distinct "advantage" over others who do not have contracts with the ADF that are reliant on US controlled technology; it would not really put ADI at any large advantage over those who do have those contracts with the ADF, as they are also free to come to us and ask for an exemption from the operation of the EO Act, as has ADI. However, ADI may well suffer a fundamental commercial disadvantage if the application is not granted. ADI referred us to the consequences it could suffer if the exemption were not granted - it would no longer have the option of employing dual nationals or third country foreign nationals, a situation Mr McKibbin indicated would be unacceptable (T96). Mr McKibbin told us that ADI, as a project driven company, seeks to employ the best qualified and best skilled people available for the job to be done and he says there are inadequate numbers of these qualified people available to ADI and who are Australian-only citizens (T54 and T93). He says ADI needs to look outside of the Australian-only national workforce. If it doesn't, quality could be compromised or the job may not get done.

114 Alternatively, if ADI does not turn to employment of dual nationals or third country foreign nationals, it will not have adequate numbers of people or adequate numbers of properly qualified people to complete the contracts it has. ADI could then be forced to be in breach of its contractual obligations to both its US sponsors and potentially the Australian government with whom it contracts, on the basis that it cannot perform.

115 It is therefore not unreasonable to conclude that if the exemption is not granted, ADI could quite likely close its operations in Western Australia, and this Tribunal believes it is not in any way in the best interests of the Western Australian community for that to happen, or indeed, for that potential to exist.

116 The Tribunal asked Mr McKibbin a range of questions, including what ADI would do in Western Australia if the exemption provision in s 135 of the EO Act did not exist. His response at (T92 and T93):

[187]

117 Counsel for the Commissioner argued that ADI did not need the exemption - that it could take other steps to avoid the problem it says it is in (T49 - T54). But the threshold issue remains - how will ADI know what background people are from unless it asks them? By the mere existence of its contractual obligations with the US sponsors, ADI must either breach the EO Act or ignore its contractual arrangements and not perform under its contracts with US sponsors - an approach that could have serious consequences. In taking Mr McKibbin through each step effectively set out in ADI's application and as listed in [45] - [52] of McKibbin's second affidavit: 24/11/04, Exhibit A2, Mr Rosales-Castaneda appears to draw the conclusion that those issues (such as "education and training") are actually matters for exemption in that they limit the conflict between ADI's obligations under the TAAs and MLAs on the one hand and the EO Act on the other. However, each of these "issues" reflects what ADI proposes to do in conjunction with an exemption, if granted. They are to assist ADI to minimise the effect of the discriminatory conduct, permissible pursuant to the exemption if granted (T50 and T55).

118 The Tribunal does not accept that ADI should seek exemption on a person by person basis (T137); nor should it be required to rely on the potentially lengthy process for amendment of the TAA or MLA each time an issue with respect to nationality arises. Those proposals are neither feasible nor practical - they could result in lengthy delays, unnecessary and substantial expense and ultimately they produce a cumbersome process that could require ADI to rethink continuing its operations in Western Australia.

119 We are of the view that ADI does need the exemption for its operations in Western Australia to continue and that the alternatives put to us are not, on their own, feasible. However, ADI could reasonably be expected to continue to seek amendment to the TAAs and MLAs in the manner that it has in the past and in conjunction with an exemption in the future. An exemption can be combined with other strategies to minimise the impact of any discriminatory conduct which might arise through the grant of the exemption. This approach was reflected in Mr Power's submission that the exemption need only be triggered where ADI had to rely on it, and then it would operate in conjunction with other strategies (T10). It was on that basis that ADI submitted, towards the conclusion of the hearing, a draft order in quite different terms to the application for exemption.

120 On the basis that ADI needs the exemption to enable it to continue efficient operations in Western Australia, where it has 159 employees (26 of whom are dual nationals and 14 of those have access to ITAR controlled material) it would be reasonable to conclude that to grant the exemption would result in a commercial advantage for ADI.

121 The Tribunal accepts that it would be improper to grant an exemption where its primary and dominant effect would be to give commercial advantage to the applicant - if that were the only major consequence of the granting of an exemption then we should dismiss this application.

122 However, ADI operates in a dynamic environment and is just one part of a matrix that underpins Australia's defence capabilities. The result of this application for exemption does not merely affect ADI by giving it some sort of commercial advantage or benefit if granted, or a major commercial headache if not granted. The commercial advantage or benefit to ADI if an exemption were granted, is only one aspect of the situation, only one of the consequences flowing from a decision to grant the exemption. The negative commercial ramifications which would flow if the exemption is not granted may have a devastating effect on ADI, but perhaps would not present insurmountable challenges to the other bodies in the matrix (namely the ADF and the US sponsors). It is likely that they would find other contractors to meet their requirements or might, in fact, continue to rely on ADI, but not in Western Australia.

123 We therefore accept that there will be some sort of commercial advantage or benefit to ADI if we grant this application for exemption. We accept ADI's evidence as to the consequences if we do not grant this application for exemption so that ADI is in breach of the ITARs and EARs. We do not accept that those consequences are so remote as to be meaningless. They are provided for and there is nothing to indicate that in the current global environment, the US sponsors will not enforce their rights. If the exemption is not granted, ADI faces consequences from the Australian government, the US sponsors and the US government. Those consequences have an impact on Western Australia.

124 We accept that ADI does not have a direct link to the US government, allowing it to negotiate, or even communicate with it. Rather, ADI's link is with the US sponsor. It is not in ADI's power to force the US and Australian governments to reach agreement about these issues in some form of treaty or generic exemption as the US and Canadian governments have done. ADI can only ask the Australian government to assist and then it is entirely in the government's hands as to whether or not it does anything. ADI cannot force the Australian government to accept a breach by ADI of the contracts it has with ADI and require it not to enforce provisions requiring ADI to supply the necessary defence equipment, built to the required specifications which are reliant on US controlled technology. That is a decision made by the Australian government - to acquire US controlled technology which is recognised as the best available in the world - and it expects to receive that pursuant to its contracts with ADI.

125 The third part of the applicable test is what interests can be pointed to that would justify the granting of the exemption, and again, that needs to be looked at against "a framework of the public interest" - Jupiter Holdings Pty Ltd and Commissioner for Equal Opportunity (supra) at [33].

126 The public interest in this case lies in ADI fulfilling its contractual obligations to the Australian government - supplying to it defence equipment of the highest quality and using the latest available technology, developed and made according to US controlled processes and technology. That is a requirement of the Australian government, made in the knowledge that it will require ADI to access US controlled technology. The public interest here is not in the ramifications for America, it is in the ramifications for Australia. If ADI cannot access US controlled technology it cannot provide the Australian government with the defence equipment it needs or wants. If that occurs, the Australian government may need to look to overseas suppliers, which in itself carries substantial negative connotations for the Australian economy and defence capability.

127 But a complete failure of ADI to supply under its contracts with the Australian government will not happen, as it has exemptions granted to it in New South Wales and Victoria. Counsel for the objecting parties contend that those exemptions are not relevant (or are of very little relevance) to this application. We disagree. Counsel asks us to look to case law from other States to guide us in setting the limits or the extent of our discretion, which we have done by reference to Stevens & Ors v Fernwood Fitness Centres Pty Ltd (supra) for example. As that authority is relevant, so are the exemptions which have been granted in other States.

128 The Victorian exemption referred to earlier (ADI Limited (Exemption) (supra)) provides the blueprint for applying the public interest in an exemption application. Although it was made without a contradictor to ADI's case, it nonetheless provides some useful guidance to us.

129 The New South Wales application is of less relevance as it, perhaps correctly, allows for the inclusion of the political point of view in that it is the Attorney General who ultimately grants or refuses the application for exemption after having considered the recommendation of the Anti-Discrimination Board. The New South Wales Attorney General granted the application for exemption from the operation of s 8 and s 51 of the Anti-Discrimination Act 1977 (NSW) with a number of conditions and it was gazetted in the NSW Government Gazette, 1 July 2005. That exemption is for three years and is a limited exemption, in that it only applies to enable ADI to meet its legal obligations under the various agreements with the US sponsors made pursuant to ITARs and EARs. ADI is expressly prohibited from rejecting applicants for positions where access to US controlled technology is required "on the basis of the prospective employee's descent, or ethnic, ethno-religious or national origin." (par [e] of the exemption).

130 Similarly, Boeing Australia Holdings Pty Ltd & Ors [QADT] (supra) and Boeing Australia Holdings Pty Ltd & Ors [VCAT] (supra) and others provide a helpful guide to this Tribunal, despite Mr Rosales-Castaneda's contention that they, and a number of other cases are wrong because they do not sit squarely within the objects of the relevant anti discrimination Act.

131 The discretion vested in us is very broad and flexible although not entirely unfettered; this application for exemption does not fit squarely within the objects of the EO Act. But Parliament cannot have intended us to look at these applications completely in isolation with only the scope and purpose of the EO Act to guide us and to qualify an application. To be able to deal sensibly and realistically with this application, we must consider it in its broader context, looking at the ramifications not just on anti-discriminatory or discriminatory conduct, if it is granted. This is not to say that economic considerations should or could be paramount; they are not. Rather, we need to look to the total combined effect of the consequences if the exemption is or is not granted. We must consider all of the interests that can be pointed to that would justify the granting of the application, against a framework of the public interest (Jupiter Holdings Pty Ltd and Commissioner for Equal Opportunity (supra)).

132 In this case, that combined effect if the exemption is granted is to make unlawful discriminatory conduct lawful; there are broad economic consequences not just for ADI, but for its employees in Western Australia and for the Western Australian economy; and there will be consequences on Australia's defence capability. It is the combination of these ramifications - discriminatory, economic and defence, that lead us to the conclusion that the public or community interest in this application outweighs the negative discriminatory impact that granting the exemption would have.

133 It is appropriate to set out VCAT's conclusions (in ADI Limited (Exemption) (supra)) regarding the relevant interests in the application and the consequences of not granting the exemption in Victoria:

[188]

"(42) The ADI companies currently have 49 agreements with US companies which are regulated by the ITARs. Projects governed by those agreements currently generate $AU400,000,000 in sales revenue for the group, 57 per cent of its total annual turnover. Of its total workforce of approximately 2500, approximately 1000 either directly or indirectly currently work on those projects. If the ADI companies, because they could not ensure that only authorised nationals would work on these projects, breach the ITARs and those provisions of the agreements which require them to comply with the ITARs it is likely that they will be banned from further work on any such projects; either currently or in the future and from receiving any ITAR related technical data, defence services or defence articles.

(43) If this occurred the consequences are likely to be these.

(44) First, this would impact on Australian Government defence upgrades and modernisations. They would be delayed and possibly Australia's defence capability would be compromised.

(45) Second, the Australian Government would have to find alternative ways to have these projects completed. The projects may have to be undertaken in the US and this would involve increased cost.

(46) Third, about 40 per cent of the ADI companies' workforce would need to be redeployed or if this were not possible would cease to work for those companies. This percentage may in fact be greater because the facilities which are currently used for the ITAR regulated projects and other work might without those ITAR regulated projects become unviable and have to be closed. This would mean further staff losses.

(46) [sic] Fourth, there would also be staff losses in ancillary staff employed in connection with the ITAR regulated projects, such as subcontractors, management and administration staff. The loss of these projects can then have potentially very serious effects on Australia's labour force and the national economy.

(47) Fifth, the ADI companies are major contributors to the tertiary education sector through various cooperative programs including research. If the ADI companies' staff, workload and revenue were substantially reduced it is likely that it would not be able to contribute to that sector to the extent that it now does."

[191]

136 Mr Ritter, supported by Mr Rosales-Castaneda, argued that the amendment to the application by ADI did not cure it of a fundamental and fatal flaw in that the conduct, if the exemption is granted, would nonetheless breach the Racial Discrimination Act 1975 and due to the primacy of that Act under s 109 of The Commonwealth of Australia Constitution Act 1990, we cannot or should not grant the exemption, because the subject matter of it is covered by Commonwealth laws.

137 The issue comes down to whether "place of birth" relates to "nationality", "national origin" or both. If it relates to both or to just "national origin", then there may be potential for the conduct requiring disclosure of a person's place of birth, to be a breach of the Racial Discrimination Act 1975.

138 Currently, ADI asks that prospective employees and any existing employees about to commence work on a different or new project, disclose their place of birth. This is necessary so that ADI can confirm to their US sponsors that no unapproved person will access US controlled material on that project. If the person is a dual national or third country foreign national, then ADI either does not use them for the particular project or redeploys them elsewhere in the company, whilst seeking an amendment to the TAA or MLA, to either add the country or the individual to the list of those permitted to access ITAR controlled technology (T44 and T99). Approval by the US government to a person or a country does not mean approval is automatic for the next project. Each approval is project specific.

139 Counsel pointed out that ADI's original application for exemption, as drafted, sought an exemption for conduct that would breach s 9 and s 15 of the Racial Discrimination Act 1975. Those sections provide that conduct which seeks to demand from prospective and existing employees details of their national origin (as opposed to nationality) is discriminatory conduct. The amended application lodged by ADI removes references to "national origin" and replaces it with a reference to "nationality". However, the application continues to seek the right to demand from prospective and existing employees details of their place of birth.

140 In Macabenta v Minister of State for Immigration and Multicultural Affairs (supra), the full Federal Court held that, in accordance with a line of British and Australian authority, there is a distinction between "nationality" on the one hand and "national origin" on the other hand.

141 Consideration of that line of cases clearly indicates that "nationality" is synonymous with citizenship and is quite different from "national origin". "Nationality" has no necessary connection with race, whereas "national origin" is founded on a person's place of birth and on the broader concept of the country of origin of a person's ancestor - Macabenta v Minister of State for Immigration and Multicultural Affairs (supra). In that case, the full Federal Court referred, at pages 10 - 11, to the American position as taking the same direction as British and Australian authority:

[195]

145 In his evidence, Mr McKibbin advised that, based on ADI's experience with the requirements of the US sponsors and the US government, they look at a range of factors to determine a person's nationality. Place of birth was a material consideration in determination of nationality, according to ADI. (T9)

146 In the Commissioner's submissions (11(b)(2)) we are told that "place of birth" is a characteristic of both national origin and nationality "and, in relation to national origin, granting the application would be in conflict with the Racial Discrimination Act 1975 (Cth)". But what of its meaning in relation to "nationality"?

147 In our view, a consideration of nationality does not automatically exclude consideration of a person's place of birth. Consideration of nationality requires ADI to embark on a factual enquiry as to a range of factors which might indicate a person's nationality. These factors include: where they lived, where they have worked, their marital status, where they were educated and their place of birth. Place of birth, in this context, can be used to indicate a change in citizenship. Their place of birth fixes their national origin as at the time of their birth, for their lifetime. A person's "national origin" cannot change. However, nationality can change on a number of occasions throughout a person's life depending on external factual situations. It would be relevant to the US sponsors and the US government, in our view, to know whether a person's citizenship has changed. Questions are asked relating to many other factors of that person's life; their place of birth reflects their citizenship at that point - at the time of birth; their citizenship will continue to change depending on where they are living and a range of other factors. ADI does not seek to make any enquiry into the broader aspects of national origin, namely origin of a person's ancestors. There is more to national origin than just a person's place of birth.

148 In our view, therefore, place of birth can, in some situations, be an indicator of a person's nationality.

149 We have not undertaken a comprehensive analysis of the application of the Racial Discrimination Act 1975 to the facts in this matter and counsel did not provide us with one. However, s 9 of that Act requires that the conduct be "based on" national origin and s 15 requires that the conduct be "by reason of national origin". There was no evidence before us that would lead us to conclude that a decision made by ADI would fit within s 9 or s 15; despite Mr Ritter's assertions there was no proof that the US government relied on "place of birth" in the "national origin" context for its conduct. To the contrary, Mr McKibbin gave clear evidence that the US government treated the information as part of "nationality" (T76 - T77). See also Commonwealth of Australia v Stamatov [1999] FCA 105, in particular [39] and [40] for a discussion of the practical application of the causation principles that arise.

150 In summary, we are of the view that the reference to "place of birth" in the application relates to "nationality" and there is no real evidence before us that would enable us to reach a conclusion that there would be a breach of the Racial Discrimination Act 1975.

[206]

156 It is worth setting out that regulation in full because it bears a striking resemblance to the specific matters counsel have directed us to when considering this application for exemption. We think it appropriate to refer to s 5 of the New South Wales Regulations 2004 to give us some guidance as to what we might consider when considering an exemption application.

157 Mr Rosales-Castaneda says the other States have taken reliance on the public interest too far, and that therefore they have taken exemption applications outside of the objects of the relevant legislation, thereby reducing their relevance to us. We have the view that in these cases as demonstrated in NSW, Victoria and Queensland, close examination of the public interest and the weight to be given to it is appropriate and correct. This is particularly so as the EO Act, although it gives rights and creates obligations that are personal, does not operate in a vacuum where the only relevant consideration is the person's interest; rather the EO Act must operate in a wide social environment; the EO Act specifies that it has effect in the workplace and in the broader economic community. It is most appropriate that we look at the same sorts of things that the relevant body did in NSW, Victoria and Queensland.

158 Counsel for ADI pointed out that all of the exemptions referred to in other cases on which counsel encouraged us to rely were absolute in their nature - they related to certain groups of people, who could be identified without further fact finding, being excluded from doing certain things. However, ADI's proposed exemption has been drawn in a manner which would require an assessment of objective fact to be made that the conduct was necessary for compliance with the ITARs/EARs. The exemption sought does not prevent a complaint being lodged; it only prevents it where ADI can prove that its conduct, against which a complaint is made, was necessary for compliance with the ITARs/EARs as a matter of objective fact.

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (225 paragraphs)

Adi Limited & Ors and Commissioner for Equal Opportunity & Ors [2005] WASAT 259 (28 September 2005)

Legislation Cited (8)

Cases Cited (2)