The South Australia government has retreated from its attempt to pass legislation that would have allowed startups and tech companies to bypass state laws in the name of innovation and R&D.
The Research, Development and Innovation Bill 2017 quietly and easily passed the South Australian lower house last month and was set to be debated in the Legislative Council this week.
The bill would have allowed the government to “temporarily suspend, modify or dis-apply laws” that would prohibit an “innovative research and development proposals” from a company looking to operate in the state.
This would be done through a “research and development declaration” granted by the governor after a recommendation from the relevant minister. A declaration would have allowed the tech company to bypass the requested state acts and laws, potentially including anti-discrimination laws, worker’s compensation, environmental protections and occupational health and safety regulations.
But the proposed legislation has been quietly withdrawn from the schedule for the state Parliament’s final sitting week.
Critics of the bill, including the Greens and state law societies, were concerned with its wide scope and the potential for exploitation by large tech firms.
While the bill is similar to the federal government’s FinTech regulatory sandbox, which grants exemptions from licensing laws to startups wanting to test a product, it was set to be much wider in scope and potential for misuse.
The bill received little public attention until highlighted by journalist Asher Wolf on Twitter, an online petition demanding it be withdraw received 10,000 signatures.
Following the backlash, the state government delayed the debate on the bill and withdrew it from the schedule. With Thursday being the last sitting day for the year in South Australia, the bill in its current form is unlikely to see the light of day again.
South Australian Greens MP Tammy Franks was one of the only politicians to criticise the bill in Parliament and online.
“We’ve stopped this bill for the moment, but I suspect it will be back with a vengeance next year. We’ll be keeping our eyes on this one,” Ms Franks said.
“We want to see the tech industry succeed. They need an R&D sandbox, we all want this to happen, but in consultation with civil society and legal experts and not at the expense of important legal protection and our civil liberties.”
“This bill would effectively be able to suspend over 500 current laws at the stroke of a pen for a research and development declaration.”
The South Australian government had earlier said that the bill was part of its efforts to make the state the innovation centre for Australia and to attract startups and tech firms from across the world.
It said the bill would have ensured the “legal and regulatory environment in the state is responsible and adaptable to such opportunity” and positioned “the state as the first choice for companies to engage in research and development”.
State innovation minister Kyam Maher said the bill was an extension of legislation passed by parliament earlier this year to allow for the trailing of driverless technology in the state, and would facilitate similar testing in the state by large tech companies.
“The nature of many research and development proposals means that there may be legislative regulatory barriers that act as a disincentive to industry and entrepreneurs to pursue trialling them in South Australia,” Mr Maher said in Parliament last month.
“The bill aims to attract innovative research and development proposals to South Australia and establish this state as a global leader in research, development and innovation trials.”
Before introducing the bill to Parliament, the government sent a “short note” and copy of the legislation to Australian representatives at tech giants including Amazon, Apple, Tesla, Microsoft and Facebook, but did not consult with legal or community groups.
The Greens and legal organisations raised serious concerns with the bills, slamming its broad approach and labelling it “sinister” and “overreaching”.
Ms Franks said the bill was dangerous and unnecessary.
“You can’t make this stuff up. Truth here is far stranger and more sinister than fiction. For the deputy premier to push for a bill that could technically then override almost every law of the state is simply outrageous,” Ms Franks told InnovationAus.com.
“That he has consulted with Amazon, Google and Facebook but not the public of South Australia is extraordinary,” she said.
“Why on earth should Parliament now allow laws – hard fought and won – that afford South Australians privacy, consumer, animal cruelty or workplace protections to be wiped out with the stroke of the governor’s pen because big business can’t handle some red tape?
“That red tape protects privacy, safety and civil society. It is there for a reason and if we are to suspend it, we should debate the reason why.”
The Law Society of South Australia also slammed the bill, criticising its broad scope and lack of safeguards in a submission to government. The group argued that the bill gives “broad unfettered powers” to the government to override laws for tech companies.
“It would mean that these companies could be exempt from workplace safety laws, anti-discrimination laws, environmental protection laws and other laws designed to ensure businesses protect staff from exploitation and adhere to appropriate standards of safety and care,” Law Society of South Australia president Tony Rossi told InnovationAus.com.
“The bill would also exempt these companies, and the government, from any liability relating to duty of care.”
To receive a research and development declaration, the company would have to prove that the proposed project is in line with the objectives of the bill, that they have the necessary skills to complete it, that it is in the public interest, risks have been minimised and it will not have an adverse effect on public health or the environment.
The minister that receives the application will then consult with any other relevant ministers and anyone else they deem to be impacted by the decision, before passing on a recommendation to the governor.
The declaration could last up to 18 months and can be extended for another 18 months on top of that in special circumstances.
The bill did allow for Parliament to challenge a declaration and veto a minister’s decision, but Mr Rossi said this is “inadequate and unsatisfactory”.
“It only gives Parliamentarians five sitting days to consider a declaration and, until then, the declaration would be valid and can be relied upon,” he said.
The bill had the broad support from the state opposition party, with shadow ministers raising a few concerns but ultimately supported the proposal.
Speaking in Parliament, state attorney-general John Rau denied the bill was formulated to address a specific business case, saying it is more about advertising the state to tech companies around the world.
“This bill is as much as anything a very loud signal to anybody in the research and development game anywhere in the world that we are available, we are open for business and we want you to talk to us, and then let them come to us,” Mr Rau said.
“This is about making South Australia have a marketing edge as a destination for research and development opportunities. That is what it is about. It is not about me or the government having a particular project in mind.
“The bill basically enables us to jump to the front of the research and development queue globally, not just within Australia, and I think that is something that we should be embracing and grabbing hold of with both hands.”