The relationship between FOI and Government Business Enterprises (GBEs) in Australia reflects the changing relationship between administrative law and public administration. There is a sea of change which, at close quarters, is revealing contradictory results. On the one hand we have decisions like Teoh which at first glance represents new heights of administrative law imperialism, on the other we have treasury officials reinventing government for the year 2010 within which there is no need for administrative law. Somewhat like a modern version of More's Utopia for the public service. In this new corporate Utopia smooth client service delivery and modified market mechanisms will serve the citizen consumer much better than awkward and uncertain recourse to judicial review and the whimsy of procedural fairness.

Within that changing relationship between administrative law and public administration we find that democratic accountability mechanisms with a citizen focus, like FOI, are being equated with private sector accountability tools, which are described in shorthand as market mechanisms, designed to achieve a particular form of economic rationality. Public choice theorists see the transformation of GBEs resulting in increased efficiency, effectiveness and economic savings. In these visions administrative law is an anomaly at best and a barrier to reform at worst. Reduced to this dimension the public policy task becomes merely choosing between equally preferable sets of accountability mechanisms where, by definition, one set is better suited for a market orientated public sector. The clear agenda is to reproduce in the public sector governance structures and practices that are found in the private sector.

A further problem for those trying to promote the democratic virtues of FOI (or in Allars's terminology pursuing administrative law values of openness, rationality, fairness and participation) is that the meaning of public power in the 1990s is undergoing a rapid redefinition. In this climate of uncertainty the relationship between FOI and GBEs provides an interesting paradigm to examine the nexus between administrative law and public administration in the late 1990s. The answer to the question in this paper's title is "We Do!" The "We" being active citizens of a representative democracy. The accountability being offered by market mechanisms, and a regime of government controls over GBEs, is not interchangeable with that produced by devices like Freedom of Information. The drive for accountability via market mechanisms (and associated government controls) is generated in part by those who view the role of a citizen as a passive consumer of goods and services where the public interest must be converted into a bottom line figure among many others in an environment of competitive neutrality.

The aim of this paper is to demonstrate that the relationship between FOI and GBEs reflects the state of flux that currently exists between administrative law in general and public administration. Differences over whether FOI should apply to GBEs reveal much more than simple public policy choices. At their heart these differences will determine what role if any the values of rationality, openness and participation will play in the future exercise of a significant section of public power in this country. Wettenhall has demonstrated that this process of corporatisation is not a new phenomenon and one of the major themes running through public administration history relates to

the difficulty in developing appropriate formulae to reconcile the needed flexibility for managers of public enterprises with the requirement for continuing accountability. In one famous passage, Musolf described this search as an exercise in "artful government."

The Australian Law Reform Commission and Administrative Review Council Report Open Government: A Review of the Federal Freedom of Information Act 1982 (ALRC/ARC Report) represents a strong rejection of the view that the democratic objectives of FOI should be fully exchanged, at the present, for private sector and other government accountability mechanisms. However the recent change of Federal and Queensland governments herald a new era where the objectives of the FOI Act will be seen as irrelevant to GBEs and replaceable by regulatory mechanisms that apply to the private sector (Corporations Law and trade practices legislation) and private sector accountability mechanisms (corporate reporting, accounting and audit requirements). Looking back to Discussion Paper 59 (DP 59) the templates of these arguments against FOI can be discovered;

It is difficult to reconcile the objectives of the FOI Act which focus on the accountability of executive government which has a duty to act in the interests of the whole community with a proposal to subject operations in a commercially competitive environment to public scrutiny under the FOI Act.

[W]hen government business enterprises are operating in a competitive commercial environment and are subject to corporate reporting, accounting and audit requirements there is no need for public accountability via the FOI Act.

Government enterprises should be entitled to the same treatment as private sector organisations. A 'level-playing field' is best achieved by removing regulatory intrusions into the affairs of GBEs, which do not apply to the private sector, so that they are best able to compete.

My fear is, whilst the ALRC/ARC Report firmly comes down on the side of continuing FOI scrutiny of GBEs, the formulae adopted for this end contains within it the means for significant sectors of government to slip out of an accountability scheme which is designed to serve the public interest. The ALRC/ARC Report has placed us on a continuum which, at one end contains the accountability administrative lawyers and political scientists wax lyrical about, and at the other end is a chartered accountant's dream of crystal clear bottom line numbers. In one sense the ALRC/ARC Report may have missed the achievement of "artful government". As Wettenhall argues

"whether the newer State-owned companies (as we have seen, now a dominant form of corporatisation) do not constitute a significant drift away from the accepted standards of public accountability, and whether the "commercialisation" which is such a strong driving force in the modern movement allows any place for considerations of public interest and public value."

Background: The ALRC/ARC Report on FOI

The ALRC/ARC Report recommends that, generally, GBES should be subject to the FOI Act. However, where they operate predominantly in a competitive market, exemption should apply. The ALRC/ARC considers that if Commonwealth GBES do not operate predominantly in a competitive market then s.43 of the FoI Act (the business affairs exemption) will, on a document by document basis, adequately protect their commercially sensitive documents as opposed to a "blanket exemption".

The responses to the DP 59 proposals for GBEs pinpoint the major pressures behind the push to have GBEs excluded from the FOI regime. The advocates for exclusion of FoI from GBEs argue that;

• FOI obligations are an impediment to commercial operations
• potential for use of FoI by commercial competitors
• existing accountability mechanisms negate the need for FOI

For the purpose of this paper I am happy to adopt the criteria developed by the ARC in determining what constitutes a GBE for the purposes of administrative law - namely;

• the government controls the body
• the body is principally engaged in commercial activities and
• the body has a legal personality separate from the government.

In the case of a body corporate, the government has a controlling interest if

• it is able to control the composition of the board of directors,
• casts more than one half of the maximum number of votes that might be cast at a general meeting of the body, or;
• controls more than one half of the issued share capital of the body.

At the state level GBEs will include bodies that fall within this general definition and those defined as GBEs or State Owned Enterprises by various statutes.

Accountability transfer

The ALRC/ARC report seems to accept that all the private sector and government accountability mechanisms are, in the long run, fully interchangeable. The operating premise appears to be that at the end of the day you can achieve a mix of mechanisms which will produce the same accountability outcome as any other mix. Thus the two-fold recommendation resulting in some GBEs being fully exempted from FOI, while a number of others remain within the Federal FOI regime. The key filter is the competition factor that is present.

The ALRC/ARC Report argues that in general GBEs should be subject to the FOI Act. However once a GBE becomes engaged predominantly in commercial activities in a competitive market then "market forces combined with whatever regulatory mechanisms apply to then private sector generally or to the particular industry in which the GBE operates will provide more appropriate accountability."

The dissenting view of the Commonwealth Ombudsman rejects the argument that all accountability mixes are equivalent. The Commonwealth Ombudsman considers that all GBEs should be subject to the FOI Act because of considerations relating to;

• Community Service Obligations
• public interest
• statutory powers
• management of public assets

all of which demand, in the terms of democratic accountability, a higher degree of transparency and direct citizen accountability. This argument dismisses the desirability or even the potential to exchange accountability regimes. Under this approach the democratic accountability regime, as represented in part by FOI, could be supplemented by various other private sector and government accountability mechanisms.

Margaret Allars has levelled the same kind of critique against those advocating the removal of administrative law coverage in exchange for a manufactured environment of market mechanisms. The removal of administrative law coverage on the pretext that a sufficient competition factor is present in the system does not convince Allars. She argues

Administrative law review is simply a casualty of the overwhelming political pressure to place corporatised GBEs in a position of "competitive neutrality". The presence of full competition is not, as the ARC claims, the reason for removing administrative law review; it is the result to be achieved by its removal.

Why this difference over the transfer of accountability regimes?

The differences between the two views over accountability regimes for GBEs and FOI in the ALRC/ARC Report is fundamental. The majority view in the ALRC/ARC Report lends itself to a process of continual leakage of GBEs from coverage of FOI. At the moment the degree and quality of market competition is the key determinative of that leakage but the logic of the ALRC/ARC position lends itself to other determining criteria. The ALRC/ARC Report sees democratic accountability (enhanced by allowing public examination of government policy and decision making and increased participation in that decision making) as a relevant factor in governing GBEs but only one of the factors where "there are questions about the degree and type of accountability that should be required and the best way to achieve it."

This approach of the ALRC/ARC is a reflection of the variety choices now facing public policy decision makers when dealing with accountability issues. The dynamics of a plethora of intellectual trends have created a series of accountability regimes which have competing claims for legitimacy, acceptability and priority in the areas of administrative law and public administration. An understanding of the milieu that has given rise to these various accountability regimes will lead to a clearer judgment about the non-interchangeability of these regimes. The central issue is that the majority of these regimes allow little, if any, space for the considerations of public interest and public value. Allars argues that

"There is no inquiry as to how competition in the market will promote the values of openness, rationality, fairness and participation which are protected by administrative law review. There is no evidence or likelihood that providers of collectively consumed services will compete in providing procedures designed to promote these values as components of those services."

Why the differing accountability regimes?

For the purposes of this paper I would like to focus on three sets of trends which have contributed significantly to the shaping of the parameters of the democratic, private sector and government accountability regimes which the ALRC/ARC Report considered important in relation to GBEs. These trends are not mutually exclusive and form important subsets within each of the accountability regimes being discussed in this paper. These trends are;

• The emergence of a liberal democratic polity in Australia
• The collapse of a private/public sector dichotomy
• Effects of New Public Management (NPM) and New Institutional Economics (NIE) reforms on Australian administrative law and public administration

The emergence of a liberal democratic polity in Australia

This trend, and its slow evolution, has been well charted in recent articles. Several stages of its long term development, especially in relation to handling official information, have been skilfully traced by Paul Finn. The Australian High Court has been slowly mapping out the foundations needed for a vibrant representative democracy and supplying any missing elements such as an implied right to freedom of speech or access to information at elections. Recent changes to the composition of the High Court may affect how adventurous this mapping exercise will be over the next decade but the exploration will continue.

The second chapter, of the ALRC/ARC Report, titled "Government information in a democratic society", outlines the central theme that a representative democracy necessitates an active and informed citizenry. The following quotations were used in the ALRC/ARC Report to illustrate the central linkage between access to government information and the development of a liberal democratic society.

Citizens in a representative democracy have the right to seek to participate in and influence the processes of government decision-making and policy formulation on any issue of concern to them ... The importance of FOI legislation is that it provides the means for a person to have access to the knowledge and information that will assist a more meaningful and effective exercise of that right.

Information is the currency that we all require to participate in the life and governance of our society. The greater the access we have to information, the greater will be the responsiveness of our governments to community needs, wants, ideas and creativity. Alternatively, the greater the restrictions that are placed on access, the greater the feeling of 'powerlessness' and alienation.

Other writers have used this emergence or necessity to construct a liberal democratic polity in Australia to argue that there is a nexus between the implied freedom of speech cases and FOI or that the interpretation of FOI legislation demands a leaning in favour of disclosure in order to advance the democratic objectives of FOI legislation.

The belief that either Australia is becoming, or needs to become, more liberal democratic assigns a prime order of importance to mechanisms like FOI that are perceived as having a key role in producing outcomes such as open government or an active and informed citizenry. Chapter 3, of the ALRC/ARC Report "A new approach", reverberates with this theme.

This particular development fuels a qualitatively different type of accountability regime. In the past Parliament has been the focal point for evaluating the effectiveness of accountability. In terms of GBEs this has led to arrangements such as annual reporting requirements, specification of information provision to the minister, auditing procedures and other requirements. The liberal democratic trend imposes, or agitates for, a further set of accountability requirements between the citizen and the GBE and the citizen and the Executive regarding the operations of the GBE.

The collapse of a private/public sector dichotomy

Central to the debates within administrative law and public administration is the well explored removal or disintegration of the private/public boundary. While it is arguable whether the distinction ever had any basis in reality or efficacy as a conceptual device its current utility is minimal. The trend towards commercialisation, corporatisation and privatisation of public authorities, in association with an increasing growth of bureaucracy in corporations, makes it almost impossible to currently use the terms private and public in a meaningful way. Roger Wilkins has observed that

"perhaps the boundaries between the public sector and the private sector are becoming less significant, so that the distinction between private and public law no longer makes good sense."

The removal of the distinction allows for the creation of a number of accountability regimes which have vastly different objectives. Previously when the concept of a "dichotomised continuum", with private law at the bottom stretching up to public law at the top with a clear separation between the two sectors, it was accepted that accountability regimes were either private or public.

Public policy makers, academics and judges, faced with the inapplicability of the private/public law dichotomy, have a number of choices. One response is to seize the opportunity and fill accountability gaps (in the democratic sense) in the private sphere with public law mechanisms. This type of response can be seen in the arguments advocating the extension of FoI into the private sector. Another example is to be found where an administrative law principle, like procedural fairness, is advocated as an alternative to statutory intervention (or self regulation) in the area of protection for minority shareholders.

A second response, to the disappearing public/private distinction, is to demand that, regardless of where former public sector bodies currently are located on a public/private sector continuum, public law accountability mechanisms stay in place until private sector equivalents are created. The proliferation of industry ombudsman schemes is an example of this type of "accountability replacement" approach. A variant is that proposed by Allars of the creation of private rights, "community service rights", to ensure the operations of GBEs achieve certain acceptable standards of accountability.

The third response is to urge a re-evaluation of the private/public divide and to draw a new boundary around a much smaller public sector sphere. Wilkins suggests that

"My preference would be to see a greater role for private law remedies in relation to consumer/citizen grievances and for administrative law to remain within the relatively traditional confines of core public sector activities."

In this "alternative accountability" regime the robust application of contractual and other private law remedies in conjunction with statutory safeguards (fair trading legislation, citizen charters, clear definition of "entitlements" from utilities etc) will produce an accountability framework far better suited for the needs of a competitive marketplace and the efficient management of public assets.

Effects of New Public Management (NPM) and New Institutional Economics (NIE) reforms on Australian administrative law and public administration

New public management reforms and new institutional economics which includes pivatisation, commercialisation and user pays seem to have created a world view which displaces the ideology represented in the underpinning's of the traditional administrative law/representative democracy accountability framework. Within the NPM and NIE framework the relevancy and efficacy of administrative law becomes highly problematic. In Wilkin's terms "Whither administrative law?" Table 1 demonstrates the impact and often complex relationship between NPM, NIE and administrative law. At several critical junctures there is clear conflict between the direction and performance goals of NPM and NIE and the focus of administrative law on procedural processes which are unconnected and jurisprudentially unconcerned with any type of outcome.

Within the NPM and NIE perspective administrative law review mechanisms like the Ombudsman, Freedom of Information or concepts like procedural fairness are not necessarily the problem. In Wilkin's view the "problem is that they locate problems and mistakes (that is their job), and the public thinks that public administration should make no mistakes." Wilkins outlines some of the problems an administrator is faced with under an administrative law review accountability regime;

• I would say that there is an obsession with "process" in the current systems of review and not a focus on results.
• There is a focus on "trouble cases", problem cases and not overall performance. By and large these are looked at as isolated and discrete cases not as part of a system.
• There is a focus on natural justice and due process.

A look at Table 1 reveals how Wilkins's mindset is approaching the question of accountability from a NPM and NIE perspective. An added element to this approach is the desire to move GBEs into an accountability schema which tolerates risk taking in the public sector to a level approaching that in the private sector.

A sub theme which occurs throughout the NPM and NIE ideology is the concept of agency theory. Farrar and McCabe provide a detailed coverage of how agency theory operates in the context of GBEs. As Weller et al point out

The starting point for agency theory is the idea that everything can be understood as a set of contracts or agreed relationships in which two parties enter into an exchange; one party is designated the principal and the other the agent. The agent agrees to undertake certain tasks on behalf of the principal in return for certain rewards, or as a consequence of receiving a given raft of resources. The Government "purchases these outputs of the department.

Table One Effects of New Public Management (NPM) and New Institutional Economics (NIE) reforms on Administrative Law

Reform	Outcome
User Pays (NIE)	Introduction of fees (for example AAT, FOI) has reduced accessibility of administrative law
Devolution of power to managers (letting the managers manage, NPM)	Generic managers over-ride experts such as government lawyers,
Efficiency focus (NPM)	Focus on quantifiable values rather than qualitative values such as procedural due process; Concern over the cost (financial) of administrative law; Economic rationality has replaced legal rationality as the underpinning of bureaucratic work
Outcomes focus (NPM)	Frustration with administrative law getting in way of good goal achievement; Ends focus dominates over means (procedural due process) focus; Legal rules viewed as a framework to be varied according to government strategic goals
Reassertion of Ministerial control (NPM)	Confusion of accountability; Deference to the judgment of ministers or cabinet; Judicial review seen as 'intrusive', interfering with ministerial prerogative
Reduction in the size of government (NIE)	Reduction in resources has caused problems in implementation of administrative law.
Commercialisation (NIE)	Removes certain areas of government from the influence of administrative law; Raises serious questions of accountability for commercialised government agencies.

Does the choice of accountability mechanisms for GBEs matter?

The choice of accountability mechanisms does matter. The values and objectives we wish to achieve will determine our choice. However in terms of the relationship between FOI and GBES the choice is not between equally valid and competitive alternatives. The market mechanisms and other government accountability mechanisms contemplated by the ALRC/ARC Report are deficient. Those deficiencies are partially offset when administrative law review mechanisms like FOI are kept in place. Far more important, given the lessons from TriContinental, the State Bank of SA, and the WA Inc Royal Commission is that the activities of commercial government entities need to be transparent and accountable not only to the Executive and Parliament but even more so directly to the citizen.

What are the market mechanisms for accountability?

In most articles and discussions about GBEs, market mechanisms are taken as a given or are mentioned in passing. For example in the ALRC/ARC Report under the heading "GBEs are subject to private sector and government accountability mechanisms" the private mechanisms receive this sole mention "GBEs are subject to a wide range of accountability measures that also apply to private sector organisations". Farrar and McCabe provide a more detail account of these market mechanisms but with the objective to convince the reader that full privitisation offers greater accountability. The Farrar and McCabe corporate governance mechanisms include;

• a board
• independent auditor
• separate legal personality
• competition between managers for jobs in the market for managerial services
• debt market scrutiny

The authors express grave doubts about the effectiveness of several of these mechanisms and regret the absence of other market controls including;

• market for corporate control (opportunity for takeovers or buy outs)
• Absence of stock exchange scrutiny

The paradox is that those pushing for GBEs to be exclusively within a private sector regime of accountability, and away from a disclosure regime which is "costly and can make commercial operations less efficient", are entering a private sector where there is an increasing demand for greater disclosure and transparency.

Government sector accountability mechanisms

A major problem with the move towards corporatisation has been to settle on an appropriate monitoring regime which will ensure a standard of corporate governance acceptable to parliament. Various schemes have been tried out internationally and within Australia. The ALRC/ARC Report outlines at the Commonwealth level the major points of the Accountability and Ministerial Oversight Arrangements for Commonwealth GBEs namely;

• presentation of detailed corporate plans (including financial targets and business strategies) for next 3-5 years
• provision of confidential six month progress reports

These various arrangements have been criticised especially in relation to the limited accountability they offer to the public. Weller et al indicate that the major critique of accountability in a managerialist regime is that responsibility is located narrowly in a limited hierarchy which excludes citizens and clients. Aronson outlines a large number of possible mechanisms to remedy these public interest shortcomings including;

• contestable public interest or consumer group representation on boards
• consumer and community complaints and ombudsman procedures,
• provision of performance standards and public involvement in their setting
• regular provision of information to the public on performance as measured against those standards
• and in the case of capital-intensive utilities, public involvement in setting and enforcing infrastructure reinvestment

Conclusion

The pressures and ideologies behind the drive to corporatise and eventually privatise most Australian GBEs, at a national and state level, will ensure that the question of administrative law review will continue to be on the agenda for the rest of the 1990s. Despite the inadequacies of private and government accountability regimes, and the recommendations of the ALRC/ARC Report, it will be these regimes which will to a large extent eventually govern disclosure of information previously accessible to the public.

Given the trends identified earlier in this paper, particularly the liberal democratic evolution and the breakdown of the private/public law dichotomy, we may see a radical transformation of the disclosure regimes operating in the private sector. Demands for higher levels of transparency and disclosure in the private sector are starting to surface not only from consumer groups but also institutional investors. The arrival over the next decade of a plethora of organisations, currently called GBEs, into the private sector will cause a rethink especially if the High Court continues to develop an Australian system of law designed to serve the particular needs of Australia. We may find that developments in contracts, torts, property law and the rules of standing will be further developed to take into account this fundamental reorganisation of the public and private sectors.

In a typically administrative lawyer centric perspective Douglas and Jones in the new edition of their book on Administrative Law touch on these same themes;

We live in interesting legal times. Old approaches to legal reasoning are being abandoned, and courts appear to be taking an increasingly active role in the making of law. The doctrine of precedent is looking decidedly ragged. Traditional modes of statutory interpretation are giving away to an approach which is far more purposive in orientation. In identifying elements of a Bill of Rights hidden in the Australian constitution, the High Court has succeeded in realising the Alchemists' dream of turning lead into gold. Administrative law has been transformed by some of these developments, and may yet be transformed by others. Moreover, it has also been transformed by statutory developments whose effect has been to make largely irrelevant much of what once formed the staple of Administrative Law.

Add in a little NPM, a bit of NIE, some ALRC, a touch of ARC a few GBEs and a little FOI and it may very well herald interesting times indeed.

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