The tribunal orders that the following notice be published in the Government Gazette.

Pursuant to section 83 of the Equal Opportunity Act 1995 the tribunal grants an exemption to the applicants from the operation of sections 13, 14, 15, 98, 100 and 195 of the Act, on the following conditions:

1 The exemption applies only in respect of actions or omissions which are reasonably necessary for the applicants to meet the requirements of the Department of State of the United States of America, the United States Department of Commerce and the United States Federal Aviation Authority, contained in or referable to the International Traffic in Arms Regulations and the Export Administration Regulations ("the US Security Regulations"), so far as those requirements apply directly or indirectly to work carried on, or on behalf of, or at the request of, or under the control or supervision of, an applicant.

2 For an applicant to take the benefit of the exemption in relation to an action or omission which adversely affects an existing or potential employee, it must take reasonable steps to avoid or reduce the adverse effect. In particular, the applicants are required, prior to taking any action permitted by this exemption order, to:

(a) assess the reasonableness of gaining a specific exemption for an employee, contractor, employee of a contractor, or job applicant who does not satisfy the US Security Regulations;

(b) provide all employees, contractors, employees of a contractor, and prospective employees, contractors, and employees of a contractor, with:

(i) express notice that they may be adversely affected by the exemption if they are not an Australian national or if they hold dual nationality and/or citizenship;

(ii) a reasonable explanation in plain English of the nature of any adverse effects of such action to them;

(iii) information about how they can apply for Australian citizenship or renounce any other citizenship they may hold, and a reasonable opportunity to take such steps;

(iv) information regarding their rights under the Racial Discrimination Act 1975 (Cth) and the Equal Opportunity Act 1995 (Vic), and, in particular, the complaints procedure under those Acts and the rights of aggrieved persons to take their complaints to the Victorian Equal Opportunity and Human Rights Commission and the (Australian) Human Rights and Equal Opportunity Commission; and

(v) ongoing and regular education and training in anti-discrimination, particularly race discrimination, and the internal and external procedures available to receive, investigate and resolve discrimination complaints and grievances and, in particular, those relating to race;

(c) implement comprehensive anti-discrimination policies governing all aspects of the work and workforce, including management, and with particular regard to race discrimination.

3 The applicants are required to provide a written report to the Victorian Civil and Administrative Tribunal and the Victorian Equal Opportunity and Human Rights Commission every six months from the date of this exemption order, over the three year period specified in the order, detailing:

(a) the steps they have taken to comply with the above conditions;

(b) the number of persons affected by this exemption order, the nature of the effects, and the steps taken to redress any adverse effects; and

(c) implementation and compliance generally with the terms of this exemption order.

This exemption is to remain in force for a period of three years from the day on which notice of the exemption is published in the Government Gazette.

(a) Boeing Australia Holdings Pty Limited

(b) Boeing Australia Limited

(c) Aerospace Technologies of Australia Limited

(d) Hawker de Havilland Aerospace Pty Ltd

(e) Preston Aviation Solutions Pty Ltd

(f) Other companies which are now or may in the future be related entities to Boeing Australia Holdings Pty Limited within the meaning of the Corporations Act 2001(Cth); and

(g) Officers and employees of any company which is otherwise an applicant.

Mr Matthew Carroll and Ms Emma Turner, solicitors, of the Commission

For Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union

1 Since 1984 the Victorian Parliament has maintained legislation designed to eliminate discrimination and to promote equality of opportunity. The legislative instruments have carefully set out the attributes on the basis of which discrimination is prohibited; and have defined what is meant by discrimination. However the Parliament has been conscious that there will be some circumstances where discrimination should not be unlawful; and a number of statutory exceptions have been identified. The Parliament has also sought to deal with unknown circumstances[1] by allowing the tribunal to grant an exemption from the operation of the legislation. This case raises important issues as to when such an exemption should be granted. It does so in the context of persons who manufacture aeroplanes, who wish to discriminate in employment on the ground of nationality in order to comply with technology licencing agreements, the terms of which are dictated by foreign law.

2 The applicants are companies associated with Boeing Australia Holdings Pty Ltd ("Boeing"). One of these companies is Hawker de Havilland Aerospace Pty Ltd ("Hawker de Havilland"), which conducts a significant manufacturing business in Victoria. For convenience, all the applicants will be referred to as "Boeing".

3 In December 2003 the tribunal granted an exemption under section 83 of the Equal Opportunity Act 1995 ("the Act") to Boeing. The exemption was from certain sections of the Act and allowed Boeing to discriminate in its employment practices on the basis of the nationality of persons. The exemption was granted to enable Boeing to meet the requirements of the Department of State of the United States of America (and other American government entities) contained in security laws. Amongst other things, those laws were directed at protecting sensitive technical information in relation to aircraft manufacture and safety. The exemption which was granted was for three years and expired on 18 December 2006.

4 The current proceeding is one in which Boeing seeks the renewal of the exemption for a further period of three years. The application is supported by an affidavit of Fiona McQuillan dated 10 November 2006. I accept that evidence. The application is made in respect of all the applicants, including companies that will be "related entities" to Boeing in the future.[2]

5 The application for exemption relates to a number of provisions of the Act which prohibit discrimination, namely:

s

activity in the pre-work area, including recruitment (section 13);

s

activity in the work area, including redeployment and (subject to the terms of the exemption) termination of employment (section 14);

s

activity in respect of contract workers in the pre-work and work areas, including engagement, redeployment and termination of engagement (section 15);

s

authorising or assisting discrimination (section 98);

s

requests for information (section 100); and

s

advertising which would be otherwise discriminatory (section 195).

As with the original exemption order, Boeing only seeks an exemption to the extent sufficient to allow it to meet the specific requirements of the International Traffic in Arms Regulations ("ITAR") and the Export Administration Regulations ("EAR") (taken together, "the US Security Regulations"), which are regulations made under United States law.

6 Boeing acknowledges that any exemption which is granted ought not be available unless it has taken reasonable steps to avoid or reduce the adverse effects of a particular act or omission. More particularly, Boeing submitted that the following conditions should be imposed upon any grant of an exemption:

The exemption applies only in respect of actions or omissions which are reasonably necessary for the applicants to meet the requirements of the Department of State of the United States of America, the United States Department of Commerce and the United States Federal Aviation Authority, contained in or referable to the International Traffic in Arms Regulations and the Export Administration Regulations ("the US Security Regulations"), so far as those requirements apply directly or indirectly to work carried on, or on behalf of, or at the request of, or under the control or supervision of, an applicant.

For an applicant to take the benefit of the exemption in relation to an action or omission which adversely affects an existing or potential employee, it must take reasonable steps to avoid or reduce the adverse effect. In particular, the applicants are required, prior to taking any action permitted by this exemption order, to:

(a) assess the reasonableness of gaining a specific exemption for an employee, contractor or job applicant who does not satisfy the US Security Regulations;

(b) provide all employees and contractors, and prospective employees and contractors, with:

(i) express notice that they may be adversely affected by the exemption if they are not an Australian national or if they hold dual nationality and/or citizenship;

(ii) a reasonable explanation in plain English of the nature of any adverse effects of such action to them;

(iii) information about how they can apply for Australian citizenship or renounce any other citizenship they may hold, and a reasonable opportunity to take such steps;

(iv) information regarding their rights under the Racial Discrimination Act 1975 (Cth) and the Equal Opportunity Act 1995 (Vic), and, in particular, the complaints procedure under those Acts and the rights of aggrieved persons to take their complaints to the Victorian Equal Opportunity and Human Rights Commission and the (Australian) Human Rights and Equal Opportunity Commission; and

(v) ongoing and regular education and training in anti-discrimination, particularly race discrimination, and the internal and external procedures available to receive, investigate and resolve discrimination complaints and grievances and, in particular, those relating to race;

(c) implement comprehensive anti-discrimination policies governing all aspects of the work and workforce, including management, and with particular regard to race discrimination.

The applicants are required to provide a written report to the Victorian Civil and Administrative Tribunal and the Victorian Equal Opportunity and Human Rights Commission every six months from the date of this exemption order, over the three year period specified in the order, detailing:

(a) the steps they have taken to comply with the above conditions;

(b) the number of persons affected by this exemption order, the nature of the effects, and the steps taken to redress any adverse effects; and

(c) implementation and compliance generally with the terms of this exemption order.

7 Boeing (including Hawker de Havilland) make components for the commercial and military aircraft industry. Hawker de Havilland has a factory at Fishermens Bend in Victoria at which it manufactures these components. In many instances Hawker de Havilland is the sole source supplier of particular aero structure components; and it exports approximately 97% of its manufactured product to the USA, France, the United Kingdom and Canada.

8 Boeing's ability to manufacture aero structure components is dependent upon compliance with licence agreements; and, in turn, on the export laws of the United States, in particular ITAR and EAR.

9 Boeing's business in Victoria is a significant contributor to the State's economy. Contracts affected by the ITAR and the EAR provide a high local added value content, generating employment for Australian engineers, tradespersons and administrators. The aerospace industry is also a major contributor to the tertiary education sector though co-operative research centres and collaborative programs. The aerospace industry is also a major contributor to the support of the Australian defence forces.

10 ITAR provides that certain requirements be included in the licensing agreements for American aerospace technology, such as those relevant to Boeing's Australian operations. In particular, Part 124.8(5) provides that the following must be included in applicable aerospace technology licencing agreements:

The technical data or defense service exported from the United States in furtherance of this agreement and any defense article which may be produced or manufactured from such technical data or defense service may not be transferred to a person in a third country or to a national of a third country except as specifically authorised in this agreement unless the prior written approval of the Department of State has been obtained.

The expression "a national of a third country" is not defined in the ITAR.

11 The US Department of State has effectively approved Australian nationals and Canadian nationals as persons to whom technical data or defense service may be transferred. But it has not given approval to persons who are not Australians by birth or naturalisation, even if they are permanent residents. Nor has it given approval to Australian citizens who are also citizens of a country other than the United States or Canada. Hence Boeing (and Hawker de Havilland) would be in breach of its licensing agreements if technical data was transferred to a person who was a national of a country other than Australia, the United States or Canada, without the prior written approval of the US Department of State.

12 Failure to comply with ITAR may result in serious penalties being imposed, including debarment from the use of particular technologies, heavy fines, criminal penalties and loss of export privileges. In short, failure to comply with ITAR may result in Boeing being unable to manufacture aerospace products in Victoria. I say "may" because much would depend on the response of the US authorities to a direct challenge to the ITAR; or, at least, what Boeing may choose to do in the face of the prospect of US action. However I accept that the threat of closure of Boeing's operations, if it is not granted an exemption, is a real one.

13 Boeing maintains that it has implemented a stringent export control regime to ensure that it does not violate the export laws of the United States, including ITAR and EAR, nor its licensing agreements. To do this it needs to undertake employment practices which, unless exempted, would be unlawful under the Act. The exemption renewal which is sought is regarded by Boeing as being necessary to enable it to do the following specific things:

s

ask existing and future employees to advise their exact nationality and citizenship status;

s

require existing and future employees to wear a badge which identifies US, Australian and Canadian Boeing employees;

s

prevent unauthorised employees from accessing controlled technology and performing particular roles within Boeing's organisations that require access to controlled technology;

s

ask existing and future employees to complete a Boeing export control compliance verification form to ensure that foreign persons are not placed into positions or physical locations where controlled technology is accessible, and to limit the employees computer access to prevent the employee from electronically accessing controlled technology;

s

ask existing and future employees who are either foreign nationals or hold dual citizenship to execute a non-disclosure agreement in accordance with the licensing approval process required by the Department of State, United States of America.

14 The Hawker de Havilland Group currently employs approximately 1,270 persons, 800 of whom work in Victoria. Boeing concedes that any exemption should only apply to the extent sufficient to allow it to meet the specific requirements of the ITAR and EAR and ought not be available unless it takes reasonable steps to avoid or reduce the adverse effect of a particular act or omission. Actions that might be taken to mitigate adverse effects include:

s

re-assigning employees from controlled programs to non-controlled programs;

s

providing training and information to employees regarding the exemption order;

s

providing employees with an information pack about: the terms of the exemption; discrimination; and obtaining Australian citizenship;

s

obtaining an amendment to the relevant licence if possible.

15 As a consequence of the exemption granted in 2003, Hawker de Havilland has re-assigned five workers to non-controlled programmes. However no workers have been dismissed from their employment. Further Hawker de Havilland have entered into an agreement with relevant unions regarding the implementation of its export compliance programme.

16 The tribunal required the application to be publicly advertised. The application was also referred to Victoria's Equal Opportunity and Human Rights Commission ("the Commission").

17 As a result of the notification process, submissions were made to the tribunal by the Commission and by the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union ("the AMWU"). The AMWU represents 130,000 workers throughout Australia, including several hundred who may be affected by the exemption sought by Boeing. The AMWU sought to become a party to the proceeding. I declined to make such an order, having regard to the nature of the proceeding; but I heard from, and received evidence from, the AMWU.

18 The Commission prepared a comprehensive written submission which carefully dealt with the concept of granting an exemption under the Act. The Commission did not oppose Boeing's application, but submitted that a reasonable limitations test be applied so as to minimise any infringement of human rights.

19 The AMWU opposed the application on the basis that the exemption would frustrate the objectives and scheme of the Act.

20 On 15 December 2006 I ordered that an interim exemption be granted. The purpose of this order was to extend the previous exemption, on the same terms, until the determination of the present application.

21 The Act provides that an employer must not discriminate against a person in determining who should be offered employment or in determining the terms on which employment is offered to the person.[3] There is a similar prohibition in relation to discrimination against an employee.[4]

22 Discrimination is defined to mean direct or indirect discrimination on the basis of an attribute.[5] One of the attributes, on the basis of which discrimination is prohibited, is race.[6] The word "race" is defined to include "nationality or national origin".[7]

23 Hence it is unlawful for an employer to determine who should be offered employment on the basis of their nationality.

24 The concept of "nationality" is not free from difficulty. It describes a relationship between a person and a nation. In many cases it is interchangeable with "citizenship", in that the nationality of a person is the nation of which they are a citizen. However the concept can also be understood in a broader sense: that is, the relationship between a person and a place (which, like the Kurdish region of Iraq, might not even be a nation) or a culture or even a loyalty.[8] However recent legal authority, which I accept, draws a distinction between nationality and national origin; and prefers a narrow meaning of the concept of nationality, equating it with citizenship. For example, in Macabenta v Minister for Immigration and Multicultural Affairs[9] the Full Court of the Federal Court of Australia held that a statutory rule which conferred rights by reference to citizenship of specified countries could not be said to confer rights by reference to "national origin" in breach of the Racial Discrimination Act 1975 (Cth). It also held that the trial judge had been right in construing nationality as equivalent to citizenship, but different from "national origin". As the Full Court explained, this approach is consistent with English[10] and American authority.[11]

25 In my opinion, the meaning intended by the expression "national of a third country" in Part 124.8(5) of the ITAR is citizenship of a third country. This is consistent with the approach taken in cases such as Macabenta. It is also indicated by the context and, in particular, the use of the expression "national of a third country". Hence the form of discrimination which Boeing wishes to engage in in order to comply with the ITAR is discrimination on the basis of citizenship, rather than discrimination on the basis of nationality in the ethnographical sense. Although discrimination on the basis of citizenship clearly involves discrimination on the basis of nationality - whereas discrimination on the basis of nationality in the ethnographical sense may or may not[12] - conversely it might be thought to be a less offensive basis for discrimination, at least in some circumstances, as a person can often exercise some control over their citizenship.

26 The Act contains exceptions and exemptions: and if an exception or an exemption applies, then the Act does not prohibit discrimination.[13] For example, there is an exception in relation to offers of employment for domestic services in a person's home. There is also an exception in relation to the compulsory retirement of judicial officers.

27 Quite apart from specific exceptions or exemptions which are contained in the Act, the tribunal may grant an exemption in certain circumstances. This is provided for in section 83 of the Act in the following terms:

83(1) The Tribunal, by notice published in the Government Gazette, may grant an exemption -

(a) from any of the provisions of this Act in relation to -

(b) in the circumstances referred to in section 28; or

(c) from any of the provisions of this Act in any other circumstances specified by the Tribunal.[14]

Section 28 deals with the circumstance where employees will be required to live in communal accommodation that is not suitable for occupation by people of both sexes.

28 An exemption granted by the tribunal remains in force for the period, not exceeding three years, that is specified in the notice. Further the tribunal may renew an exemption from time to time for a period, not exceeding three years. An exemption may be granted or renewed subject to any conditions the tribunal thinks fit.

29 Significantly section 83 does not set out the criteria which the tribunal should take into account in deciding whether or not to grant an exemption.

30 When a discretion is contained in a statutory instrument and the instrument is silent as to the basis upon which the discretion is to be exercised, the usual approach is to acknowledge a discretion unlimited by anything but the scope and object of the instrument conferring it.[15] Clearly enough the object of the Act is to promote the right to equality of opportunity and to eliminate discrimination. But it does not follow that a discretion to grant an exemption from the prohibition on discrimination can only be exercised if this would advance the objects of the Act. Such an approach is anomalous if the discretion in question allows an exemption from provisions of the Act prohibiting discrimination. Rather it would seem that Parliament's intent was that an exemption may be granted by the tribunal where, in the circumstances, it is necessary or desirable to avoid an unreasonable outcome.

31 In Stevens v Fernwood Fitness Centres Pty Ltd[16] the Victorian Equal Opportunity Board considered the principles which ought to apply in granting an exemption under section 40 of the Equal Opportunity Act 1984. As section 83 of the current Act is in substantially similar terms, the decision remains relevant. One principle to emerge from that case was that the discretion to grant an exemption would not be exercised unnecessarily: for example, where the conduct in question was already the subject of a statutory exception. However it is clear enough that this is not a bar if there was some doubt about whether or not a statutory exception applied. Another principle articulated by the Equal Opportunity Board was expressed thus:

... the Board will then ask: is the exemption appropriate in the light of the objectives and scheme of the Act? In considering that question, the Board will, in addition to the particular circumstances of each case, take into account such matters as the reasonableness of the exemption sought and also whether, although not clearly falling within any of the statutory exceptions, the circumstances bear a close resemblance to any of those exceptions. Conversely, if an exemption is sought for reasons wholly unrelated to the objectives or scheme of the Act (such as to obtain a commercial advantage) an exemption would be inappropriate.[17]

Clearly both the objectives of the Act and the reasonableness of the conduct sought to be exempted are relevant (whether or not it bears a relationship to a statutory exemption); but I cannot agree that an exemption will always be inappropriate because it is sought for reasons unrelated to the objectives of the Act. Rather it will sometimes be the case that an exemption is appropriate for practical reasons, unconnected with equal opportunity objectives. The circumstance referred to in section 83(1)(b), concerning communal accommodation suitable for persons of a single sex, is such an example.

32 In ADI Limited and Equal Opportunity Commission[18] the State Administrative Tribunal of Western Australia published detailed reasons for granting an exemption under the equivalent provision in the Western Australian Equal Opportunity Act 1984. The tribunal had been referred to the Fernwood case, but did not apply it. In essence the tribunal held that whether an exemption should be granted should be determined by reference to the public interest. In my view, although matters of public interest are clearly relevant, this will not provide a complete test. It will sometimes be that an exemption is reasonable having regard to essentially private interests: for example, to use section 83(1)(b) again, by reason of the cost or practicability of providing communal accommodation for workers of both sexes.

33 Thus the discretion to grant an exemption under section 83 of the Act is unconfined, except to the extent that it is only to be exercised to ensure that equal opportunity legislation does not operate unreasonably. In exercising the discretion it will always be necessary to give weight to the community's demonstrated commitment to human rights and equal opportunity. However it will also be necessary to consider other factors, whether of a public or private character, which might outweigh this commitment.

34 The Commission submitted that a "reasonable limitations" test might be adopted in determining whether or not an exemption should be granted. It said that such an approach would involve consideration of these questions:

• the nature of the right to equality and freedom from discrimination;

• the importance of the purpose that is the reason for the proposed exemption;

• the nature and extent to which the proposed exemption limits the right to equality and freedom from discrimination;

• whether or not the proposed exemption is in fact necessary for and achieves the identified purpose; and

• whether or not there is a reasonable alternative to the proposed exemption that will achieve the identified purpose with no, or a lesser, restriction on the right to equality and freedom from discrimination.

I accept that these considerations will be helpful in exercising the discretion under section 83. I also accept that these considerations (or ones that are substantially the same) are indicated by the recently enacted Victorian Charter of Human Rights and Responsibilities Act 2006. But I doubt that the considerations do more than expand on a more succinct test, which I prefer, of whether the proposed exemption is necessary or desirable to avoid an unreasonable outcome.

35 The Commission also submitted that discretion is to be informed by an acknowledgment that our community is one that is based on principles of human dignity, equality and freedom. This is clearly right. It also argued the starting point of any analysis is that departures from rights cannot be based on mere preference or convenience. This is less obviously right. Sometimes an exemption might be sought on the basis of convenience or cost or practicality; and whether it is appropriate will depend on the impact of the exemption on human rights and equality of opportunity and upon the importance of the purpose for which an exemption is sought. In this respect I would note that there is a strong public interest in maintaining human rights (even though human rights very much exist to protect private interests); but there is also a public interest in achieving convenient, economic and practical outcomes, even though such outcomes may serve private interests.

36 The conclusions I have reached as to the test to be applied are not substantially different to those applied by the tribunal in the recent decision in Australian Grand Prix Corporation.[19] In that case Deputy President McKenzie commented that there is a broad discretion in the tribunal to grant exemptions from provisions of the Act; and applied the test of whether there was an interest "sufficient to justify the exemption", including whether it promoted one of the objectives of the Act. Significantly, Deputy President McKenzie did not say that the only interests which would justify an exemption are those that promote the objectives of the Act.

37 The grant of an exemption would be consistent with two earlier decisions of the tribunal. In the Boeing decision of 12 December 2003 Vice President Davis concluded that the exemption was in the community interest. And in the matter of ADI Ltd[20], which involved very similar facts, Deputy President McKenzie thought that there were significant aspects of the public interest that supported an exemption. These included the potential loss of US defence projects regulated by the ITAR, which would prejudice Australia's defence capability, adversely impact on employment, and impact on the tertiary education sector in the funding of research projects.

38 The grant of an exemption would also be consistent with the decision of the State Administrative Tribunal of Western Australia in ADI Ltd and Commissioner for Equal Opportunity.[21] In that case the tribunal considered that an exemption was justified in the public interest, essentially for the same reasons as those articulated by Deputy President McKenzie in the Victorian ADI case.

39 The grant of an exemption would also be consistent with the position taken in Queensland[22] and New South Wales.[23]

Is it reasonable to depart from the human rights standard concerning nationality?

40 There is no doubt that this application throws up a dilemma. To grant an exemption would be a departure from a human rights standard that is established by Victorian legislation. Such a departure is only sought because important aerospace technology is subject to an American law which places American security ahead of this human rights standard. One might ask: why should not the Americans give way? On the other hand, in circumstances where it is unlikely that the Americans will give way, should we stand on principle and forego valuable jobs and enhanced defence capability? Would this be a case of cutting off our nose, not to spite our face, but to please our face?

41 The submission made by the AMWU urged the tribunal to take a tough line; in effect, to apply pressure on the United States government to back down. This is a tempting submission. One suspects that the ITAR is misconceived; and, in any event, fails to achieve an appropriate balance between human rights and other important considerations, such as arms control and preventing terrorism. But, then, I rather doubt that the United States government will back down from ITAR in the face of a decision of the Victorian Civil and Administrative Tribunal.

42 Sometimes you simply cannot ignore the elephant in the room.[24] Like it or not, the United States is the world power and controls key aerospace technology. For reasons that are probably well intentioned (even if misguided), the United States prohibits the licencing of such technology if so-called secrets are revealed to persons of certain nationality. Companies operating in Australia are left with the choice of acquiescing or not manufacturing certain aerospace products. Although acquiescence involves compromising a human rights standard, the alternative involves the potential sacrifice of jobs, economic benefits, defence capability and higher education advantages.

43 The International Covenant on Economic, Social and Cultural Rights recognises the right to work as a human right.[25] The availability of employment is important to both society and individuals within society. The continuity of employment is also important: to lose a job often has greater consequences than to not obtain a job. Hence the prospect of Hawker de Havilland closing its factory at Fishermens Bend - or even winding back its operations - looms as very important, especially having regard to the number of jobs involved. There are also the considerations of flow-on economic benefits, improved defence capability and higher education advantages which are generated by the Hawker de Havilland plant. Although these are hard to measure, I am persuaded that they are substantial and important.

44 The human rights standard in issue in this case is concerned with discrimination on the basis of nationality, not discrimination on the basis on ethnicity or ethnic origin or national origin. This is of some relevance, as nationality - in the sense of citizenship - is to some degree a matter of choice. Further our society already recognises that citizenship might be an appropriate basis upon which to discriminate; for example, it is the main basis for determining who is entitled to vote in national and State elections.

45 The extent of the compromise of the human rights standard in the present case can be minimised by the imposition of conditions. This has been acknowledged by Boeing, which has put forward a range of conditions designed to minimise the practical impact of the grant of an exemption. In my view, the range of conditions achieves the outcome sought by the Commission using its "reasonable limitations" test.

46 The AMWU was concerned that the nature of the conditions left much to the discretion of Boeing. But I cannot see any realistic alternative. The exemption sought by Boeing will only apply to actions or omissions which are reasonably necessary for it to meet the requirements of the US Security Regulations. The AMWU submitted that any exemption should specify the precise actions, and be confined to those actions. Although particular actions might be specified (such as requesting the citizenship status of a person) it is likely that other actions, intended to be covered by the exemption, will not be able to be identified. In my view, it is sufficient to impose the requirement that the actions or omissions be reasonably necessary: such a test is both flexible and meaningful. Many aspects of society are regulated by the general concept of reasonableness. It requires a requisite relationship between an action and the real basis for that action; and it requires the action to be justifiable in all the circumstances. I add that the reporting obligations will act as a check to ensure that any discretionary power is used reasonably and responsibly.

47 The AMWU also opposed the grant of an exemption on the basis that there had been a failure to comply with the conditions of the previous exemption. Presumably the tribunal was being asked to infer that any prospective conditions would not be complied with. Having regard to the nature of the evidence produced before the tribunal and the manner in which it was presented and tested, I cannot make a finding that the conditions of the previous exemption were not complied with. In any event, I do not accept that previous non-compliance requires an inference that there will be non-compliance with conditions imposed on a renewed or fresh exemption. The proposed exemption contains onerous reporting conditions; and the Commission and the union can, and are likely to be, effective watchdogs.

48 The AMWU expressed concern about the position of contractors who will not be protected by the proposed exemption. However the exemption can be framed to require remedial measures in respect of contractors and employees of contractors.

49 The AMWU raised the potential of an exemption to be in conflict with the Racial Discrimination Act 1975 (Cth). However there can be no such conflict. Boeing is required to comply with both Victorian and Australian laws. The grant of an exemption under Victorian law does not in any way affect the operation of the Commonwealth Racial Discrimination Act. I should also note that that Act, unlike the Victorian Act, does not prohibit discrimination on the basis of "nationality"; so it is likely that quite different issues would arise.[26] In other words, the human rights standard adopted by the Commonwealth Act is different to that adopted by the Victorian Act.

50 The AMWU submitted that if an exemption was granted it should be subject to an additional condition to the effect that Boeing comply with an enterprise bargaining agreement that it had entered into with the union pursuant to section 170LT of the Workplace Relations Act 1996 (Cth). The terms of this agreement overlap, and extend, the conditions which were placed on the 2003 exemption order. Of course, it is open for the union to negotiate such an agreement for its members which goes further than what might be required under an equal opportunity statute. But it does not follow that negotiated terms should automatically be included as equal opportunity requirements.

51 I am satisfied that the conditions proposed by Boeing are sufficient and appropriate to protect the position of workers who may be affected by the US Security Regulations.

52 The Commission submitted that a condition should be imposed requiring Boeing to undertake reasonable steps to change the US Security Regulations, or the attitude of the US Department of State, or to obtain exemptions, or devise alternative strategies, to overcome the problem thrown up by this application. I am satisfied that Boeing will seek to achieve this outcome regardless of the imposition of such a condition: it is clearly in its interest to be free of the ITAR restrictions or, at least, to have them apply more flexibly. Hence the condition that is sought by the Commission is unnecessary. In any event, I would regard such a condition as being precatory in nature, incapable of realistic enforcement and inappropriate in a legal instrument.

53 This case is one where, in the circumstances, it is desirable to grant an exemption from the Act, provided this is subject to stringent conditions that minimise the prospect of, and impact of, actual discrimination. The exemption is desirable to avoid an outcome which would be unreasonable by reference to considerations of employment, the economy, defence and tertiary education. The circumstances which make the exemption desirable are not of Boeing's own making, but are dictated by the economic reality that the use of American technology is essential for the Australian aerospace industry and the fact that the use of such technology is subject to American law.

[1] I suppose this includes both "known unknowns" and "unknown unknowns". This language, taken from decision analysis, was propelled into public consciousness as a result of comments by United States Secretary for Defence, Donald Rumsfeld, on 12 February 2002 when discussing responses to terrorism.

[2] Section 83(1) of the Act allows an exemption in a wide range of circumstances, including in respect of "a class of people", and would seem to allow an exemption in favour of a company associated with a named company.

[3] See section 13 of the Act.

[4] See section 14 of the Act.

[5] See section 7 of the Act.

[6] See section 6(i) of the Act.

[7] See section 4(1) of the Act.

[8] This has been described as "nationality in the ethnographical sense": see the background paper prepared by Mr Ion Diaconu for the 55th session of the Economic and Social Council on 26 February 1999, quoted in AB v State of New South Wales [2005] FMCA 1113 at [50].

[9] (1998) 90 FCR 202.

[10] See, for example, Ealing London Borough Council v Race Relations Board [1971] UKHL 3; [1972] AC 342.

[11] Espinoza v Farah Manufacturing Co Inc [1973] USSC 232; (1973) 414 US 86 at 88-89.

[12] I do not need to determine this point.

[13] See section 12 of the Act.

[14] A substantially similar provision was contained in section 40 of the Equal Opportunity Act 1984.

[15] Swan Hill Corporation v Bradbury [1937] HCA 15; (1937) 56 CLR 746 at 757-8 per Dixon J.

[16] (1996) EOC 92-782.

[17] (1996) EOC 92-782 at 78, 804-5. Case references in the original have been omitted for clarity.

[18] [2005] WA SAT 49.

[19] [2006] VCAT 2193.

[20] [2004] VCAT 1963.

[21] [2005] WASAT 259.

[22] Boeing Australia Holdings Pty Ltd [2003] QADT 21.

[23] See the exemption order pursuant to the Anti-Discrimination Act 1977, published in the Government Gazette on 11 February 2005.

[24] See the discussion at http://en.wikipedia.org/wiki/Elephant\_in\_the\_room.

[25] Article 6 of the International Covenant on Economic, Social and Cultural Rights, ratified by Australia in 1976. By contrast, the Victorian Charter of Human Rights and Responsibilities Act 2006 only provides that, subject to specified exceptions, a person must not be made to perform forced or compulsory labour.

[26] In Macabenta v Minister for Immigration and Multicultural Affairs (1998) 90 FCR 202 the Full Federal Court made a distinction between "national origin" and "nationality".