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Australian E-Commerce Laws to Legitimize E-Documents

The Australian Federal Attorney General, Mr Daryl Williams, has endorsed the report made in March by a government-sponsored think tank called the Electronic Commerce Expert Group (ECEG), recommending that laws should enshrine the legal status of email, electronic contracts and digital signatures.

Although the main impetus behind the reforms is the federal government's push to remove "legal obstacles" to electronic commerce by creating a "light-handed regulatory framework," the new laws represent a revolution in the way records are managed.

If enacted, the new laws would make it possible for private and public sector organisations to do away with much of their physical documents, as the necessity to keep paper originals would be removed if digital signatures were attached to electronic files.

These documents should be able to be accepted as evidence, be able to be designated as government records, and be enough to satisfy submission requirements from the Australian Securities Commission (ASC), the ECEG said.

Two other recent reports support those claims: the Australian Law Reform Commission's recommendations to replace the Federal Archives Act, and a December 1997 discussion paper on changes to the Corporations Law by a Treasury committee called the Corporate Law Economic Reform Program (CLERP).

For companies, the ECEG report points out that the ASC has already launched an electronic lodgement program called EDGE, which now takes in over a third of the documents required under the Corporations Law. However, the existing law obliges companies to store signed paper originals even when the submission is completely electronic.

"However, it is considered that the development of digital signatures will obviate the need for the retention of paper originals for this purpose," the ECEG report states, echoing the position taken in the CLERP paper. The Company Law Review Bill 1997, which is currently being under review by Parliament, incorporates this and other recommendations from the CLERP paper.

This would bring the ASC requirements into line with those from the Australian Tax Office, which earlier this year launched a similar service to EDGE, called e-pack, with accompanying amendments to the Income Tax Act to allow for completely electronic lodgements.

The ECEG report recommends that Australia adopt legislation similar to the Model Law formulated by the United Nations Commission on International Trade Law (UNCITRAL). The Model Law has already been applied in the U.S. states of Illinois and Massachusetts, and is the template for forthcoming laws in many First World countries.

"As a starting point, record retention requirements should apply equally to information in paper or electronic form," said the ECEG report.