1. The EO Act also provides for the duration and terms upon which an exemption or a further exemption can be granted in s 135(6). It provides:

(a) may be granted subject to such terms and conditions as are specified in the order; and

(b) may be varied either on the application of the person to whom the exemption is granted or at the instance of the Tribunal; and

(c) may be expressed to apply only in such circumstances, or in relation to such activities, as are specified in the order; and

(d) shall be granted for a period specified in the order not exceeding 5 years.

The Scope of the Tribunal's discretion to grant an exemption

1. Relevant authorities, which I outline below, indicate that the criteria that are relevant to an application for an exemption under s 135(1) are relevant to this Application under s 135(2) of the EO Act.
2. In ASC Pty Ltd, which concerned an application for a further exemption under s 135(2) of the EO Act, President Pritchard stated, at [18] - [20]:
   1. It is unnecessary to decide for present purposes whether any different criteria apply to an application for a further exemption under s 135(2) of the EO Act, in contrast to an application for a new exemption under s 135(1). On the face of those provisions, there is nothing to suggest that different considerations apply to an application under s 135(2) as opposed to one under s 135(1).
   2. I note that in BAE Systems Australia Ltd and Commissioner for Equal Opportunity [[2019] WASAT 79], the Tribunal appeared to adopt the same approach to the application for a further exemption under s 135(2), which was before it, as would have been taken in respect of an application under s 135(1).
   3. On the other hand, unless there had been a change in circumstances, or some evidence of a failure by an applicant to comply with the terms and conditions on which a previous exemption had been granted, then it might be assumed that under s 135(2) the Tribunal might more readily, and perhaps in a summary fashion, conclude that a further exemption should be given, for the same reasons as one had previously been given [Cf Thales Australia and Commissioner for Equal Opportunity [2012] WASAT 222].

1. President Pritchard's comments in ASC Pty Ltd provide useful guidance for the current Application.
2. Firstly, as President Pritchard observed, on the face of s 135(1) and s 135(2) of the EO Act, there is nothing to suggest that the criteria are different.
3. That conclusion is further supported by s 135(6) of the EO Act, which concerns the discretion of the Tribunal to grant an exemption subject to terms and conditions, amongst other things. That subsection refers to both an exemption and a further exemption which, in my view, is indicative that similar considerations are likely to apply to both types of applications.
4. Secondly, as President Pritchard observed, the Tribunal may be more willing to grant a further exemption if an exemption was previously granted and if there have been no changes in circumstances or a failure to comply with the terms and conditions of a previous exemption.
5. I would respectfully add that the grant of a further exemption is not automatic or guaranteed. Section 135 of the EO Act gives the Tribunal a broad discretion to consider whether to grant an exemption or a further exemption, and so the Tribunal must actively turn its mind to whether that discretion should be exercised. This requires a consideration of any criteria relevant to the application in question, whether an applicant has complied with the terms and conditions of a previous exemption and whether there has been a change in circumstances by which the exemption is no longer needed.
6. I will now outline some of the legal principles relevant to the grant of an exemption, and which are relevant to the grant of the further exemption in this Application.
7. In ADI, Martin CJ, with whom Wheeler JA and Pullin JA agreed, outlined the 'clear and uncontroversial' general legal principles governing the scope of the Tribunal's discretion to grant an exemption.
8. Firstly, a discretion that affects the rights of persons will not be construed by the courts as 'absolute and unfettered' unless Parliament has used plain words to express that intent (FAI Insurances Ltd v Winneke [1982] HCA 26; (1982) 151 CLR 342 (FAI) at 368, per Mason J cited in ADI at [44]). Thus, although the scope of the Tribunal's discretion in s 135 of the EO Act is broad, it is nevertheless constrained.
9. Secondly, the scope of the Tribunal's discretion is constrained by the policy objectives, and the objects, scope and purpose of the EO Act (FAI at 368, per Mason J Padfield v Minister for Agriculture Fisheries & Food [1968] UKHL 1; [1968] AC 997 at 1030; and Le v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 875 at [58] cited in ADI at [44] - [46]; ADI at [47] - [48] per Martin CJ). In other words, 'it was the intention of the Parliament to confer upon the Tribunal a discretion which was constrained only by the objects, scope and purpose of the Act read as a whole' (ADI, at [44] - [47] per Martin CJ).
10. The 'objects, scope and purpose' of the EO Act and the discretion of the Tribunal is 'to be ascertained from a construction of the Act as a whole' (ADI, at [55]). As Martin CJ explained in ADI at [56], the EO Act is structured to prohibit certain types of discriminatory conduct by reference to specific grounds, and although there is significant overlap, the ambit of the conduct prohibited under different grounds is not identical. For example, the ambit of prohibitions on conduct that might be discriminatory on the ground of sex is not identical to the ambit of conduct prohibited because it is discriminatory on the ground of race. Martin CJ explained, at [58] - [59]:
    1. So, in summary, there are a range of prohibitions specified by reference to the ground of discrimination, qualified by exceptions which are specifically referrable only to discrimination on that particular ground. There are also general exceptions which apply irrespective of the ground of discrimination. If none of the specific or general exceptions apply, the Tribunal is given a general power of exemption, unconstrained by anything other than the objects, scope and purpose of the Act and the temporal limitation upon the operation of the exemption.
    2. In this context, the legislative object to be served by the conferral of a general power of exemption upon the Tribunal is, I think, clear. The Act does not prohibit all discriminatory conduct. Rather, the ambit of the conduct prohibited depends upon the ground of discrimination. Nor does the Act prohibit all conduct of a particular kind because it is discriminatory on a particular ground. Rather, the Act provides both specific and general exceptions to its prohibitions. The legislature has thereby recognised that in a number of circumstances, which it has identified both specifically by reference to the particular ground upon which the discrimination is practiced, and generally, discriminatory conduct can be justified and should not be prohibited. And against the likely contingency that the Parliament has not been able to anticipate all the circumstances in which discriminatory conduct might nevertheless be justifiable, it has empowered the Tribunal to grant exemptions in particular cases.
11. In summary, it is therefore necessary to identify the ambit of the conduct that is prohibited concerning the specific ground for which the exemption is sought. I have endeavoured to do this by outlining the provisions for which the further exemption has been sought, namely s 37, s 39 and s 49, as well as the exceptions in s 50, s 51 and s 52 of the EO Act.
12. Thirdly, the Tribunal will need to undertake a balancing exercise when considering whether to grant an exemption. With reference to the decision of Morris J, sitting as the President of the Victorian Civil & Administrative Tribunal in Boeing Australia Holdings Pty Ltd (Anti­Discrimination Exemption) [2007] VCAT 532 (Boeing) in ADI, at [74], Martin CJ described the balancing exercise as 'a process whereby the Tribunal weighs the advantages, both public and private which would flow from the grant of exemption, against the detriment which flows from the discriminatory conduct'.
13. Fourth, the Tribunal is at risk of error if it constrains its discretion 'by reference to limited and particular questions, which are to be applied to every case' because to do so exposes the Tribunal to the 'risk of excluding from consideration matters which are relevant to the exercise of the discretion because they fall within the objects, scope and purpose of the Act, but not within the ... questions enunciated by the Tribunal' (ADI at [49] - [54]).
14. With that caveat in mind, I observe that in ASC Pty Ltd President Pritchard summarised some of the considerations that the Tribunal had applied in similar cases where the Applicants were subject to the same US import and export control laws and regulations as the Applicants in this Application.
15. In ASC Pty Ltd, President Pritchard observed, at [29] - [30]:
    1. In the exercise of a similar discretion under equal opportunity legislation applicable in other jurisdictions, a variety of considerations may be taken into account, in determining whether an exemption should be granted. These illustrate the variety of considerations which the Tribunal may take into account, in weighing up whether to grant an exemption under s 135 of the EO Act. Those considerations have included:
       • whether the exemption sought is necessary;
       • whether the proposed exemption is reasonable and necessary having regard to the reasons for which it is sought;
       • whether there are non-discriminatory ways of achieving the purposes for which the exemption is sought;
       • whether the proponent of the proposed exemption has taken reasonable steps, or is able to take any reasonable steps, to avoid or reduce the adverse effect of a particular act or action before seeking the exemption;
       • the public and private impacts of the grant of the proposed exemption;
       • whether the exemption is in the community interest; and
       • whether any other persons or bodies other than the applicants support the application.
    2. In a case where an applicant seeks a further exemption, after having been granted an exemption on an earlier occasion, other factors may be relevant, such as:
       • whether the applicant for the exemption has complied with any terms and conditions on which the earlier exemption was granted; and
       • whether there has been any change in the circumstances which now apply, as compared with those which applied at the time of the earlier exemption and in which the grant of the earlier exemption was considered warranted.

1. Having regard to the facts and circumstances of this Application by BAE Systems and ASC Shipbuilding and the evidence before me, I am satisfied that the considerations identified by Pritchard J in ASC Pty Ltd are relevant for me to consider with respect to this Application.

1. The US government has imposed regulatory control through the ITAR and EAR to ensure that the movement of defence-related technology, namely Controlled Materials, is consistent with national security interests and international obligations.
2. The ITAR and EAR restrict the movement (including import and export) of Controlled Materials, deemed to be 'Defense Articles' and 'Defense Services' including technical data, materials, equipment, information and technology (including software), of both US origin and foreign produced items derived from US origin materials. The EAR also restricts the import or export of 'dual use' items or information which are items that can be used for military or defence purposes, but which also have other uses.
3. The export controls placed on Controlled Items are extra­territorial and apply to the re-export, retransfer, access to and sharing of Controlled Items inside Australia and from Australia.
4. The ITAR sets out restrictions and prohibitions on persons of specified nationalities from having access to Controlled Materials.
5. Section 126.1 of the ITAR prohibits exports, imports, reexports, transfers and sales of Controlled Materials to or from certain countries. It contains a list of proscribed countries for which the US government has a policy of export denial.
6. Section 120.51 of the ITAR defines a 're-export' to include 'any release outside of the United States of technical data to a foreign person is deemed to be a re-export to all countries in which the foreign person has held or holds citizenship or holds permanent residency'.
7. Under the ITAR and EAR, these restrictions extend to access to Controlled Materials by a 'Dual National' (who holds Australian citizenship and the citizenship of another country other than the US); or a 'Third Country National' (who holds nationality of a country or countries other than Australia or the US).
8. Before a US company can export ITAR Controlled Materials, it must apply for an export authorisation and receive approval from the US government. These authorisations can take the form of export licences, technical assistance agreements, manufacturing licence agreements, and warehousing distribution agreements. These agreements will typically require that the nationality of persons who have access to Controlled Materials be identified and disclosed, and that access to Controlled Materials by persons of certain nationalities be restricted.
9. From 1 September 2024 (with final comments due by 18 November 2024), an interim final rule which included an exemption to s 126.18 of the ITAR became effective to simplify defence trade between the three AUKUS nations, being Australia, the United Kingdom (UK) and the US.
10. The exemption provides for restriction-free intra company access to Controlled Materials by Australian nationals or dual-nationals who have an Australian Defence Security Clearance (Security Clearance) and who are 'regular employees' of a company who is an 'authorized user'. There is a similar exemption which authorises the transfer of Controlled Materials that are classified to citizens of Australia or the UK who are dual nationals of another country if they have a negative vetting level 1 or higher Security Clearance.
11. However, there are limitations to the exemption, including that it does not apply to Controlled Materials that are in a new 'Excluded Technologies List', and it does not apply to transfers to employees or contract workers who do not hold a Security Clearance.
12. There are criminal and administrative penalties and consequences, including possible denial of export privileges, for breaches of the ITAR and the EAR. These include: fines of up to US $1 million or imprisonment for not more than 20 years for each separate violation; civil penalties of the greater of up to $1,200,000 or the amount that is twice the value of the transaction that is the basis of the violation, for each separate violation; debarment from further defence contracts; loss of company security clearances and related defence contracts; probation periods; and interim suspension orders.
13. UK laws, namely the Export Control Act 2002 (UK) and the associated Export Control Order 2008 (SI 2008/3231), prohibit the export of military goods or technologies from the UK without a licence or an exemption. They provide for the 'brokering' of military goods and technologies to be subject to licensing and record keeping requirements.

1. I make the following factual findings based on the Lagozzino Affidavit (and Exhibit PL-1), Second Ratu Affidavit and Third Ratu Affidavit.
2. The Lagozzino Affidavit mostly uses 'BAE Systems Group' to collectively refer to BAE Systems, ASC Shipbuilding, and other related bodies corporate of BAE Systems. Thus, I have understood the references in the Lagozzino Affidavit to the BAE Systems Group to refer to both BAE Systems and ASC Shipbuilding.
3. BAE Systems plc is a company incorporated in England and Wales and is listed on the London Stock Exchange. It is the ultimate holding company of BAE Systems and ASC Shipbuilding.
4. ASC Shipbuilding is a subsidiary company of BAE Systems. The Commonwealth holds one special sovereign share in ASC Shipbuilding.
5. BAE Systems, ASC Shipbuilding and BAE Defence were granted the 2019 Exemption.
6. BAE Defence is a wholly owned subsidiary of BAE Systems. It is a dormant company and no longer employs any persons, nor is BAE Defence responsible for the performance of any contracts.
7. The 2019 Exemption was, so far as it relates to BAE Systems and BAE Defence, a further exemption to an exemption granted on 4 July 2014 to those two companies and another company, BAE Systems Australia Logistics Pty Ltd.
8. The BAE Systems Group, which includes BAE Systems, ASC Shipbuilding, and other related bodies corporate of BAE Systems, comprises over 6,200 employees who are engaged at approximately 50 sites around Australia.
9. Mr Lagozzino explained in his affidavit that the BAE Systems Group's business involves providing some of the most advanced, technology-led defence, maritime and aerospace and security solutions to the ADF. BAE Systems Group works with customers and local partners to develop engineer, manufacture and support products and systems to deliver military capability, protect national security and people and to keep critical information and infrastructure safe. I accept this evidence and so find.
10. ASC Shipbuilding's principal customer is the Australian government, on behalf of the ADF and has the head contract for the delivery of new frigates to the Royal Australian Navy. Its other main customers include the Australian government on behalf of organisations other than the ADF, private companies in Australia, private foreign companies and foreign governments.
11. ASC Shipbuilding also undertakes acquisition activity including management, design, prototyping, construction and labour hire services in the naval shipbuilding sector.
12. BAE Systems carries out sustainment activity which broadly includes maintenance of existing naval capability at several locations within the Henderson precinct.
13. On 2 December 2024, BAE Systems and ASC Shipbuilding had 620 employees in Western Australia. Those figures do not include visiting workers to Western Australia or workers who fly-in-fly-out of Western Australia but are based in another state. There is no evidence about how many visiting or fly-in-fly-out workers there are.
14. There are a total of approximately 700 employees and contract workers engaged across BAE Systems Group's sites in Western Australia.
15. The total wages reported to the Western Australian State Revenue Office in the 2023-2024 financial year was $95,057,787.53 for BAE Systems and $1,820,605.65 for ASC Shipbuilding.
16. Staff of the BAE Systems Group, including the Applicants, work at several locations in Western Australia, including several locations in the Henderson shipbuilding precinct, offices associated with its maritime programs, onsite at RAAF Base Pearce and at another location on Department of Defence land.
17. In Western Australia, approximately 60 percent of BAE Systems Group employees have some level of Security Clearance, with 40 percent having a Security Clearance level of negative vetting level 1 or higher.
18. The current contracts of the BAE Systems Group have significant activities conducted in Western Australia with a collective nationwide contract value of approximately $5 billion.
19. The Applicants' have six contracts on foot in Western Australia. Some of the contracts end earlier than the five-year term of the Further Exemption sought by the Applicants. However, two of the contracts with the Commonwealth of Australia, Department of Defence have longer terms and potential terms. One expires in 2031 but may be extended for further terms of 18 months with there being no limit on the number of extended terms. Another expires in 2028 but contains options to extend the contract on an award term basis for one through to three-year terms, with the maximum contract duration ending in 2042.
20. The Lagozzino Affidavit states that BAE Systems Group has paid over $60 million to Western Australian suppliers and contractors in the past 12 months as well as having a current open commitment value to Western Australian suppliers and contractors of more than $45 million.
21. Due to BAE Systems Group's involvement in Defence contracting, it is necessary for entities within the BAE Systems Group to have access to and use defence related security sensitive information, security classified information, technical data, equipment, goods and services, and Controlled Materials.
22. Defence materials that are Controlled Materials are significant components of the goods and services provided by the BAE Systems Group under contracts with the ADF and other foreign government customers. Staff of the BAE Systems Group, including the Applicants, need to access or receive information or materials including defence related technology from the United States that are Controlled Materials to undertake their work and fulfill these contractual obligations.
23. A large proportion of the Western Australian workforce of BAE Systems Group is required to access Controlled Materials to perform their work in Western Australia. The BAE Systems Group has a flexible business model whereby some staff based in Western Australia also work on projects based in other states and territories, and similarly require access to Controlled Materials to undertake that work.
24. As part of these regulatory controls imposed by the ITAR and EAR, US companies enter into license agreements with companies in the BAE Systems Group which are approved by the US government and authorise the export of the technology or hardware that are Controlled Materials. These may include a requirement that the nationality of persons who have access to Controlled Materials be identified and disclosed and that access to Controlled Materials by persons of particular nationalities be restricted.
25. Non-compliance with the ITAR and EAR will subject the Applicants to significant civil and criminal fines and penalties, seizure and forfeiture of Controlled Materials, debarment from further defence contracts including the receipt, use and on-transfer of Controlled Materials and loss of company Security Clearances and related defence contracts.
26. Non-compliance with the ITAR and EAR is also likely to place the Applicants to significant risk of breaching their contracts with the ADF and other customers, which may result in termination and the imposition of penalties under the terms of those contracts.
27. There is no evidence about whether the Applicants are involved in any contracts involving military goods or technologies from the UK.
28. Given the nature of the Applicants' business operations involving military defence technology, compliance with export controls including the ITAR and the EAR are central to their business, I accept, and find that the BAE Systems Group's business, including that of the Applicants, would likely be significantly impacted without the exemption in place.
29. In the Lagozzino Affidavit, Mr Lagozzino stated that, without the exemption BAE System's business would be 'severely impacted with an associated loss of employment' and that work that is currently being performed in Western Australia may need to be relocated to other Australian states and territories that have exemptions in place. I also accept that evidence and make that finding.

1. A significant part of the Applicants' business is defence contracting which requires the Applicants to access Controlled Materials, making them subject to US laws including the ITAR and EAR as well as the conditions imposed in export licenses.
2. To comply with these legal and contractual obligations, the Applicants need to be able to determine whether an individual is permitted to access certain Controlled Materials. They therefore need to engage in the Proposed Exempted Activities including requesting information about the nationality of their employees, contractors, or potential employees and contractors, and making decisions based on that information such as excluding or restricting persons from undertaking work that would give them access to Controlled Materials.
3. If the Applicants were unable to do so, they would be at risk of contravening these laws and any conditions imposed on their export licences which impose restrictions on persons having access to Controlled Materials based on nationality.
4. This could result in substantial penalties, both civil and criminal, potentially a loss of the use of the technology, which in turn could result in contractual breaches and penalties under existing contracts.
5. I accept that compliance with export controls, including the ITAR and the EAR are central to the Applicants' business which would likely be severely impacted without the exemption in place, and that if the exemption is granted, the Applicants' may need to relocate work from Western Australia to other Australian states and territories that have equivalent exemptions in place.
6. Without an exemption, if the Applicants engage in the Proposed Exempted Activities, they will contravene s 37, s 39 and s 49 the EO Act. Further, there are no specific or general exceptions in the EO Act that they could rely on instead of seeking a further exemption.
7. I agree that granting a further exemption under s 135(2) of the EO Act is the only means by which the Applicants can continue to fulfil their defence contracts and comply with the ITAR and the EAR without engaging in prohibited discrimination. I find that a further exemption is necessary.

Is the Further Exemption reasonable and necessary having regard to the reasons for which it is sought?

1. There is some overlap between this consideration and the previous one.
2. The Further Exemption has been sought for the purpose of permitting the Applicants to continue with their defence contracting business in Western Australia without contravening US export control laws, or the provisions of the EO Act.
3. When granting the 2019 Exemption, Senior Member Spillane phrased this consideration in terms of whether the proposed further exemption was appropriate and reasonable considering the reasons for which it is necessary.
4. As I outlined in the procedural overview above, the terms of the 2019 Exemption did not define the Proposed Exempted Conduct and further conditions could be included. The Applicants were responsive to my concerns in this regard and were willing to re-draft the Further Exemption to define the Proposed Exempted Conduct so that it was clear as to the conduct being exempted, and to include additional conditions to mitigate its discriminatory effect.
5. I also note from the April 2025 Submissions that the Applicants did not seek a specific exemption from the Defence Controls Act 2012 (Cth) on the basis that it would result in an exemption that is broader than reasonably necessary.
6. Thus, the purpose for which the Further Exemption is sought is now more accurately reflected in the terms and conditions of the Further Exemption which now defines the Proposed Exempt Activities that are the subject of the Further Exemption and includes more specific conditions to limit its application and discriminatory effect.
7. I discuss the terms and conditions of the Further Exemption in further detail below. With respect to this consideration, I am satisfied that the Further Exemption is reasonable and necessary, as well as being appropriate and reasonable, due to its defined scope and the measures specified in the conditions to mitigate potential adverse effects.

Are there non-discriminatory ways of achieving the purposes for which the Further Exemption is sought?

1. There are no specific or general exceptions in the EO Act that would assist the Applicants, other than a further exemption being granted under s 135.
2. The Applicants may be able to rely, in part, on the exemption in s 126.18 of the ITAR. However, as the exemption applies to Australian nationals, dual-nationals, and/or UK nationals, and the Applicants would nevertheless have to undertake a screening process to obtain information about nationality from their employees and contractors to determine whether the exemption applies or whether the existing provisions of the ITAR apply.
3. Also, only 60 percent of the Western Australian employees of the BAE Systems Group have some level of Security Clearance and only 40 percent have a Security Clearance at a negative vetting level 1 or higher. Thus, a large proportion of the Applicant's workforce do not have the requisite Security Clearance to fall within the scope of the exemption.
4. Further, I accept the evidence in the Lagozzino Affidavit that a Security Clearance above 'baseline' will only be issued if a person has a requirement to access Australian classified material, and therefore not material that is classified by another government, such as the US government. Additionally, only an Australian citizen can obtain a Security Clearance unless a 'nationality waiver' is obtained from the Australian Department of Defence, which is only granted in exceptional circumstances, or unless the person is employed on secondment from the US, New Zealand, the UK or Canada and whose foreign security clearances are recognised in Australia.
5. The Applicants are also subject to extra conditions imposed by the US government on their export licences. These conditions may prohibit the export or transfer of Controlled Materials to any person other than those of specified nationalities listed in the approval for the export licence. Again, this means that the Applicants would be required to request nationality information from employees and contractors and make decisions about their access to Controlled Materials based on nationality.
6. There are limited non-discriminatory ways of achieving the purpose of the exemption that are subject to practical difficulties which would result in the Applicants nevertheless having to collect information about nationality and make decisions with respect to that information. This weighs in favour of the grant of the Further Exemption.

1. The Applicants submitted that there continue to be strong public interest reasons which support the grant of a further exemption.
2. Firstly, the BAE Systems Group's main customer is the ADF and its operations contribute significantly to Australia's defence capabilities by providing access to Controlled Materials from the US which cannot be obtained elsewhere. I agree that the exemption is in the national interest, and therefore the public interest, because having access to Controlled Materials will assist the Applicants to provide defence technology to the Australian government which will assist to meet Australia's defence needs in the future. A loss of access to Controlled Materials may be detrimental to Australia's defence capabilities.
3. Secondly, the Applicants submit that the BAE Systems Group is a significant contributor to the Western Australian economy, with approximately 700 employees and contract workers across its sites in Western Australia, current contracts in Western Australia with a value of approximately $5 billion, and $60 million being paid to Western Australian suppliers and contractors in the last 12 months. I am satisfied that this economic contribution to the Western Australian economy and community is in the public interest.
4. The public interest is also served by consistency and predictability in the granting of exemptions in similar circumstances, including for other companies that have had to comply with the ITAR and EAR. Recent examples of similar exemptions to the Further Exemption that have been granted in Western Australia can be seen in Jet Aviation, Saab Australia and Cobham Aviation Services Australia Pty Ltd and Ors [2023] WASAT 21 (Cobham).
5. Further, the public interest is also served by consistency and predictability in the granting of similar exemptions to those granted to the Applicants in other states and territories. In this regard, the Applicants provided this Tribunal with similar exemptions that have been granted to them in the Australian Capital Territory (ACT), New South Wales, South Australia and Victoria.
6. On balance, I find that the public interest favours the grant of a further exemption.

The public and private impacts of the grant of the proposed Further Exemption

1. The public and private advantages which would flow from the grant of an exemption (or a further exemption), must be balanced against the detriment which flows from the discriminatory conduct (Boeing, ADI).
2. There is some overlap between this, and other considerations including the public interest consideration, and whether the Further Exemption is reasonable or necessary.
3. In terms of public impact, the grant of the Further Exemption will enable the Applicants to continue to do business in Western Australia. There is a likelihood that if the Further Exemption is not granted, the Applicants may need to move their operations outside of Western Australia to a state or territory where an equivalent exemption is in place. That is likely to result in a loss of employment to Western Australian employees and contractors, as well as detriment to the Western Australian economy through the loss of the significant spending that the Applicants undertake with respect to Western Australian suppliers.
4. In terms of the private impact of the exemption not being granted, the Applicants will need to relocate their Western Australian business interstate, or if they remain, they will face a difficult choice. To avoid contravening the ITAR and the EAR, and export licence conditions concerning nationality, they will need to contravene the EO Act by requesting information about nationality. If they do not do so, they face the risk of significant financial penalties for breaches of contractual and security obligations if they are unable to ascertain the nationalities of persons having access to Controlled Materials. This may in turn, not only have a detrimental economic impact on the Applicants' business, but also the security of employment of the Applicants' Western Australian employees.
5. In Cobham, at [97], where an exemption was sought in similar circumstances to this case, Deputy President Glancy (now President Glancy) identified the detriment to individual employees and contractors that may result from requiring them to provide information about their country of birth, nationality and citizenship:

The requirement for employees and contract workers and applicants for employment or contract work to provide information about their nationality, country of birth and past and current citizenship is unlikely to cause much detriment in and of itself. Any detriment will occur from the use of that information to exclude people of particular nationalities, countries of birth and who hold or have held citizenship of particular countries from particular work. I have no evidence before me from which I can draw any conclusions about the extent of that detriment. All I can do in the circumstances is identify the potential detriment and conclude that a loss of a job opportunity may have serious consequences for particular individuals. Further, restricting some employees or contractors from certain work might create two classes of employees with the result that staff of particular nationalities may be regarded differently to others in the Applicants' workforces.

1. I respectfully agree that being asked to provide the information is likely to cause little, if any detriment to an individual, but the use of that information may cause detriment to an individual in the manner described by the learned President.
2. On balance, I am persuaded, and I find, that any detriment to individuals in being asked about their nationalities or excluded from certain work, is outweighed by the public and private advantages of granting the Further Exemption. These include public interest considerations such as protecting and enhancing Australia's national security and Western Australian economic interests including the interests of the Applicants' current employees and suppliers. As I also outline below, the conditions to the Further Exemption will also assist in limiting the possibility of the creation of a separate class of employees or contractors.

Whether the Applicants have and will continue to take any reasonable steps to avoid or reduce the adverse effect of the discriminatory acts

1. The Lagozzino Affidavit identifies measures the Applicants have implemented to minimise the impact of export controls and to comply with existing exemptions, and further states that if the Further Exemption is granted, the Applicants will take all reasonable steps to minimise the impact of the exemption on individuals.
2. For example, the BAE Systems Group requires its workers to undertake mandatory training on 'Respectful Behaviours' to ensure employees are aware of the 'Management and Prevention of Harassment, Bullying and Discrimination in the Workplace Standard' (Workplace Standard). That Standard communicates the expectations of all employees to maintain a working environment free from discrimination, with substantiated breaches resulting in disciplinary action. Employees have also been provided with cultural awareness training, business integrity training (which includes modules on respectful workplace behaviours), 'Call it out' training and reconciliation training.
3. The BAE Systems Group also has policies, procedures and training to comply with ITAR requirements and exemptions granted under anti-discrimination legislation, including an 'Equal Opportunity Exemption Standard' which seeks to educate current and prospective employees and contractors about the exemptions granted in various Australian states and in the ACT, and to limit the impact of the exemption on individual employees.
4. It also has an intranet page specifically dedicated to informing employees about the existence of exemptions in each state or territory and an explanation of why they are necessary. This page also includes links to the Workplace Standard, and links to state, territory and federal anti-discrimination and human rights commissions.
5. The BAE Systems Group has also streamlined its employment processes so that an assessment of whether the proposed role is affected by ITAR requirements and the nature of those requirements is undertaken before the proposed role is approved, and so that new employees are aware of the existence of relevant exemptions and can be screened early in the recruitment process.
6. The Lagozzino Affidavit further confirms that, if an existing employee or contractor's nationality or place of birth does not meet the requirements of the ITAR for that project, an internal assessment will be undertaken to see if the person can keep working on the project without having to access Controlled Materials. If that is not feasible, the BAE Systems Group will endeavour to provide alternative work of equal skill and responsibility on a different project. However, at the time of the Lagozzino Affidavit, no prospective Western Australian employees or contractors had been rejected, and no current employees or contractors had been moved to another project or facility due to not meeting the ITAR requirements.
7. Based on the steps already taken which I have outlined above, I am satisfied that the Applicants have implemented, and will continue to take, reasonable steps to avoid or reduce the adverse effect of the discriminatory acts if the Further Exemption is granted. This weighs in favour of granting the Further Exemption.
8. The text of the proposed Further Exemption that the Applicants have revised contains conditions to minimise the impact of the exemption as far as is reasonably practicable. I address these below under the heading 'Should the exemption be subject to conditions or limitations?'.

Whether any other persons or bodies other than the Applicants support the Application

1. In the Commissioner's affidavit dated 25 September 2024, the Commissioner stated his view that 'the application is not intended to further the objects of the Act'.
2. Referring to ADI, the Commissioner stated that he did 'not support or oppose the application for exemption and express[ed] no view as to whether the public interest will best be served by granting the exemption'.
3. As I outlined above, the Tribunal did not receive any submissions from persons other than the Applicants in support of, or in opposition to, the Application for a further exemption. As I stated above, one employee asked a question via email as to whether the notice was principally for information only, but they did not support or oppose the application for a s 135 exemption.
4. The lack of any objections being received, lends some weight to the Further Exemption being granted.

Whether the Applicants complied with any terms and conditions on which the earlier exemption was granted

1. There is no evidence to suggest that the Applicants did not comply with the terms of the 2019 Exemption, which included an annual reporting requirement to the Commissioner.
2. This lends some weight to the Further Exemption being granted.

Any change in the circumstances compared with those which applied at the time of the earlier exemption

1. The Applicants made the Application for a further exemption on the basis that the nature of the Applicants' business operations in the current regulatory environment still requires an exemption to be granted on materially the same terms as the 2019 Exemption.
2. As I mentioned above, the 2019 Exemption expired on 13 September 2024, and so there has been a period of some months when no exemption has been in place. At the directions hearing on 17 March 2025, Mr Ratu confirmed that the Applicants are taking care to comply with the law until the further exemption was granted.
3. The Lagazzino Affidavit also references potential opportunities from the AUKUS alliance which, amongst other things, commits to the sharing of nuclear propulsion technology with Australia, and the National Defence, Defence Strategic Review which announced the Australian government's immediate actions to reprioritise defence capabilities including improving, developing and investing in defence.
4. Further, in the Third Ratu Affidavit, Mr Ratu states that the Henderson Shipyard in Western Australia is increasing its operations to undertake additional work on the Hunter-class frigate program as part of Australia's continuous naval shipbuilding strategy.
5. This information is indicative of the current defence environment and the likelihood of the Applicants defence technology-related work continuing, and perhaps increasing, in the future.
6. As I have discussed above, there have been some changes to the exemption in s 126.18 of the ITAR which came into operation on 1 September 2024 to simplify defence trade between the three AUKUS nations. However, as I also discussed above, the Further Exemption sought is limited in scope and despite the changes, it is still necessary for the Applicants to request information about nationality for reasons including to determine whether the exemption applies and whether relevant export licence conditions have been complied with.
7. I am therefore satisfied that the circumstances continue to require the grant of an exemption.
8. Section 135(6) of the EO Act allows for a further exemption to be varied. It provides that a further exemption may be varied either on the application of the person to whom the exemption is granted or at the instance of the Tribunal.
9. As I mentioned above, the text of the 2019 Exemption was based on an earlier exemption granted by the Tribunal in 2014. More recent exemptions, such as those in Jet Aviation, Saab Australia and Cobham detail the proposed exempted activities more specifically and seek to limit the circumstances in which the exemption will apply with additional conditions to minimise the adverse impacts of any conduct that is covered by the exemption.
10. As I mentioned above, when I expressed concerns that the text of the exemption did not include these details, the Applicants were responsive to amending the text of the exemption and submitted the Further Exemption for consideration.
11. I should add that this did not result in additional burdens being imposed on the Applicants because the revisions largely codified the steps that the Applicants were already taking and proposed to undertake to minimise the adverse impact of the further exemption, as detailed in the Lagozzino Affidavit.
12. In fact, the Applicants' confirmed in their April 2025 Submissions that the Further Exemption was consistent with the exemption granted in Saab Australia which reflected a corresponding exemption granted to the Applicants in South Australia. Thus, many of the Applicants' systems, policies and processes to define and limit the exemption were already in place in accordance with the South Australian exemption order.
13. The updated text of the Further Exemption, which seeks to limit its scope and detrimental impact, adds weight to discretion being exercised in favour of granting it.

1. In summary, the Further Exemption is necessary for the Applicants to comply with their legal and contractual obligations.
2. The Further Exemption is also reasonable and necessary, and appropriate and reasonable, because it has only been sought to the extent necessary and there are no specific or general exceptions that the Applicants could rely upon instead of seeking it.
3. There are limited non-discriminatory ways of achieving the purposes of the Further Exemption.
4. The Further Exemption is in the public interest, and on balance, any public or private detriment, is outweighed by the advantages of granting it.
5. The Applicants have also proposed reasonable steps to limit the persons that the Further Exemption would need to apply to, and to minimise the detrimental impact of the Further Exemption on staff and contractors, and to protect the privacy of the information collected.
6. The Commissioner neither supported, nor opposed the grant of a further exemption. No submissions in support of the Application for the Further Exemption were received, and there were no substantive objections to the grant of the Further Exemption received from third parties, including workers from the Applicants, their parent company BAE Systems Group, or members of the public.
7. Overall, I am satisfied, and I find that these considerations support the grant of the Further Exemption.

Should the Further Exemption be subject to conditions or limitations?

1. The Further Exemption sought by the Applicants contains conditions in paras 2(a) to (f) which aim to limit its scope. The Further Exemption is set out in full in Annexure A to these reasons.
2. By way of summary, the conditions to the Further Exemption include that it will only apply to conduct by the Applicants which is necessary to enable them to obtain and maintain export licences, authorisations and/or approvals, enter into and/or perform contractual obligations requiring access to Controlled Materials, where necessary to comply with the ITAR or EAR and where they have taken all reasonable steps to avoid engaging in any conduct that would contravene s 37, s 39 and s 49 of the EO Act: para 2(a).
3. Paragraph 2(b) of the exemption provides that if a worker is moved from a project involving the use of Controlled Materials, an authorised officer must explain the reason for the transfer and take all reasonable steps to avoid or limit harm or loss to that person.
4. Other conditions in the exemption include ensuring no information concerning nationality is apparent on the face of security passes: para 2(c); and restricting access to information about nationality to four senior office holders in the company or their properly appointed nominees on a 'need-to-know basis': para 2(d).
5. A further condition is that the Applicants' employment policies shall refer to the terms of the Further Exemption, including its conditions, and to make it clear that the purpose of the request for information regarding nationality is to comply with US laws: para 2(e).
6. The Further Exemption is also expressed to only apply to conduct by the Applicants where exemptions, exceptions or other provisions under the ITAR or EAR, including s 126.18 of the ITAR are not applicable: para 2(f).
7. The Further Exemption also includes a condition which requires the Applicants to annually report to the Commissioner for the duration of the exemption, including with respect to education and training, the steps taken to implement the conditions of the Further Exemption, how the Applicants monitor compliance with the Further Exemption, the number of persons adversely affected, steps taken to address any adverse effects on employees and to minimise the impact of the further exemption orders on current and future employees. This condition will assist in ensuring monitoring, accountability and compliance.
8. These conditions, in my view, will assist to minimise the impact of the exemption on the Applicants' employees, contractors and prospective employees and contractors. Awareness of the exemption and its conditions in the Applicants' employment policies will also help to ensure compliance with the exemption and the effectiveness of the conditions. Annual reporting to the Commissioner will provide independent oversight and promote public confidence in the EO Act, including the grant of exemptions and further exemptions.
9. The terms and conditions set out in the Further Exemption are consistent with the conditions imposed in other cases where similar s 135 exemptions have been granted and are generally consistent with the terms of the exemptions granted to the Applicants in other Australian states and in the ACT.
10. I am satisfied that the conditions are reasonable and will assist to limit the operation of the Further Exemption to the extent that it is necessary, as well as mitigating any adverse impacts of the Further Exemption.

1. As I have outlined above, the Applicants have ongoing contractual relationships with the Australian government. Two of those contracts extend or are likely to extend beyond the term they are seeking for the Further Exemption, which is five years.
2. A five-year term will give the Applicants a period of commercial certainty so they can continue to fulfil their contractual obligations to the Australian government, in circumstances where at least two of these contracts are of an ongoing nature.
3. Granting the Further Exemption for a five-year term would also be counter-balanced by the condition requiring the Applicants to report annually to the Commissioner. The Commissioner will be able to monitor any changes in circumstances which may mean that the exemption is no longer necessary.
4. I am therefore satisfied that a five-year term is appropriate in the circumstances of the case.

1. Having considered the objects, scope, and purpose of the EO Act, and after weighing the considerations that are relevant to the grant of the Further Exemption, I am satisfied that a further exemption with conditions for a term of five years is appropriate and warranted in the circumstances.
2. I will therefore exercise discretion to grant the Further Exemption sought by the Applicants for a term of five years.

1. Pursuant to section 135(2) of the Equal Opportunity Act 1984 (WA) (EO Act), the Applicants are granted a further exemption from compliance with the provisions of s 37, s 39 and s 49 of the EO Act for a period of five (5) years insofar as those sections relate to the 'race' (as defined in s 4 of the EO Act) of applicants for employment, employees and contract workers to the extent that the Applicants may:

(a) request information relating to the nationality, place of birth and current and past citizenship from existing and potential employees and contractors;

(b) take a person's nationality, place of birth and current and past citizenship into account in determining who should be offered employment or contract work in areas requiring access to items subject to the International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR) (together, Controlled Materials) and when making decisions as to the participation of employees or contractors in such work;

(c) maintain records of the nationality, place of birth and current and past citizenship of all employees and contractors who have or may have access to Controlled Materials in the performance of their work;

(d) advertise controlled positions with the Applicants as being subject to the exemption and/or otherwise inform applicants for employment in roles which require access to Controlled Materials and are subject to permits, licences, approvals or agreements made under US and Australian import and export control laws that they may be adversely affected by ITAR or EAR controls if they:

(ii) hold, or have held, dual nationality and/or citizenship from countries other than the US or Australia; or

(iii) hold permanent residency in a country or countries other than the US or Australia; or

(iv) have substantive contacts with countries proscribed by s 126.1 of ITAR or the EAR.

(e) ensure that Controlled Materials are disclosed only to persons who are authorised by applicable US laws to receive them;

(f) impose limitations or prohibitions on persons of particular nationalities, places of birth or current and past citizenship having access to Controlled Materials in the performance of their work;

(g) disclose to any US company that holds a US Export Authorisation (US Exporters) under which an Applicant is an authorised recipient of Controlled Materials and to the US Department of State (for the ITAR) or US Department of Commerce (for the EAR), the nationalities and places of birth of all employees and contract workers who will have access to those Controlled Materials in the performance of their work;

(h) disclose to the Government of the Commonwealth of Australia (Commonwealth), the Australian Department of Defence (ADoD), the Australian Defence Force (ADF), and any duly authorised agent of the Commonwealth, ADoD or ADF, the nationalities and places of birth of all employees and contract workers who will have access to those Controlled Materials in the performance of their work; and

(i) establish security systems which will prevent the unauthorised reexport or retransfer of Controlled Materials.

1. This exemption applies subject to the following conditions:

(a) The exemption will only apply to conduct by an Applicant where:

(A) enable the Applicant to obtain and maintain export licences, authorisations and/or approvals; and/or

(B) enable the Applicant to enter into and/or perform contractual undertakings requiring access to Controlled Materials;

(ii) that conduct is necessary to comply with the ITAR or EAR; and

(iii) the Applicant has taken all steps that are reasonably available (including steps that might be taken in negotiating and performing the terms of their agreements with US Exporters) to avoid the necessity of engaging in conduct that would otherwise be in breach of s 37, s 39 and s 49 of the EO Act.

(b) Where, in the exercise of this exemption, an employee or contract worker is moved from a project involving the use of Controlled Materials to any other work controlled by the Applicants or any of their related entities, the Applicants must explain to the person through a duly authorised officer why he or she is being transferred and must otherwise take all reasonable steps to avoid or limit harm or loss to that person.

(c) Where the Applicants use a system of security passes to reflect the fact of access to Controlled Materials or levels of access to any security-sensitive material by employees and contract workers, the passes may be coded but not in such a way as to identify the nationality, place of birth and current and past citizenship of the person or the reasons for that person's level of access.

(d) All information relating to security passes, nationality, place of birth and current and past citizenship and access to Controlled Materials shall be restricted to the Applicants' Chief Counsel, Director of Export Controls, Head of Security, Chief People Officer and to their properly appointed nominees on a 'need-to-know' basis.

(e) The Applicants' employment policies shall refer to the terms of this exemption, including all conditions attaching to it, and to make it clear that the purpose of the request for information regarding nationality, place of birth, and current and past citizenship is made solely for the purposes of compliance with US laws.

(f) The exemption will only apply where exemptions, exceptions or other provisions under the ITAR or EAR, including s 126.18 of ITAR, are not applicable.

1. The Applicants will report to the Commissioner for Equal Opportunity on an annual basis on the following matters:

(a) The training and education provided to new and existing employees on these orders and their implementation.

(b) The steps taken by the Applicants to implement these orders.

(c) How the Applicants monitor compliance with these orders.

(d) The number of persons affected by these orders and the nature of those effects.

(e) The steps taken by the Applicants to address any adverse effects on existing employees as a result of these orders.

(f) The steps taken by the Applicants to minimise the impact of these orders on current and future employees.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.