Australia’s Foreign Relations (State and Territory Arrangements) Act 2020 (the Act) establishes a scheme for Commonwealth oversight of arrangements between states/territories and certain foreign entities.

What are NSW’s obligations under the Act?

From 10 March 2021, NSW is required to:

• seek the Foreign Minister’s approval to negotiate, enter into or vary arrangements with national governments, departments or agencies (core foreign arrangements); and

• notify the Foreign Minister of a proposal to enter into, entry into, and variation of arrangements with subnational governments and universities (non-core foreign arrangements).

Notifications must be made through the Foreign Relations Scheme Online Portal.

Information on all arrangements notified to the Commonwealth (with the exception of negotiation of core foreign arrangements) will be included on a public register unless the Foreign Minister decides that a limited exemption applies. If grounds for an exemption apply, these must be specified through the Online Portal.

What are the Commonwealth’s powers under the Act?

Where satisfied that an arrangement will adversely impact Australia’s foreign relations or is inconsistent with Australia’s foreign policy, the Foreign Minister may:

• for core arrangements: refuse to give approval to negotiate or enter into the arrangement (note that approval will be implied 30 days after notification);

• for non-core arrangements: issue a declaration that a state/territory must cease negotiations or not enter into an arrangement;

• declare an existing arrangement (and potentially any subsidiary arrangements) to be invalid or unenforceable, not in operation or required to be varied or terminated (according to their legal status).

The Foreign Minister is not bound by previous decisions and there are no grounds for review.

In making a declaration, the Foreign Minister must take certain matters into account where information about those matters has been provided by the state/territory. This information is provided through the Online Portal under ‘Section 51(2) considerations’. Clusters should consider carefully whether any matters apply to an arrangement.

How will NSW meet its obligations under the Act?

NSW will take a decentralised approach to meeting its obligations under the Act.

Clusters will be responsible for:

• understanding their obligations under the Act;

• implementing processes for compliance across the Cluster (including agencies);

• determining when arrangements are covered by the Act and advising DPC accordingly;

• notification of arrangements through the online portal;

• advising DPC of any decisions by the Foreign Minister in relation to an arrangement; and

• compliance with any decisions or declarations made by the Foreign Minister, including notifying partners to an affected arrangement.

DPC will provide high level guidance and support for NSW compliance with the Act, including assistance in managing risk. DPC will be responsible for engagement with the Commonwealth.

CHECKLIST for prospective foreign arrangements:

• seek internal legal advice on whether the arrangement is covered by the Act;

  • for legally binding arrangements – consider seeking advice on the inclusion of a clause limiting liability were the arrangement cancelled or amended under the Act.

  • for non-legally binding arrangements with foreign governments – ensure the arrangement is consistent with Australia's practice for concluding less-than-treaty status instruments.

• notify DPC of the arrangement and advise of any risks or timeframes that need to be managed;

• notify the Commonwealth via the online portal;

• advise DPC if:

  • a declaration is made in relation to an arrangement; and

  • the Foreign Minister does not give approval to negotiate, enter into or vary a core foreign arrangement.

Timothy Reardon

Secretary