HYDROPONICS INDUSTRY CONTROL BILL

Second Reading

Adjourned debate on second reading.

(Continued from 17 June 2009. Page 3199.)

Mr PENGILLY (Finniss) (17:19): I indicate to the house that I am the lead speaker on this legislation and that the opposition will be supporting the bill. However, there are a few things that we wish to place on record, which I will go through. Let me preface my remarks by saying that anything that can be done to suitably slow down, if possible halt (which will not happen), or hurt and curb the growth and trade in marijuana in South Australia is a good thing.

My electorate, more particularly Kangaroo Island, has a record of growing particularly good marijuana. As far as I am concerned, the people who indulge in that activity are the scum of the earth, and anything that can be done to pull them up is the best thing that can happen, not that there is a lot of hydroponically grown marijuana in my electorate, but I am aware that over the years it has become a great growth industry, so to speak (not to put a pun on it).

I even had the ridiculous situation a few years ago where, in the town of Kingscote, a local was growing it hydroponically in the roof of this house, straight opposite the police sergeant's home, attached to the police station. This was discovered some time after he had moved out, and he was openly boasting about it in the local hotel. That was a ridiculous situation.

I know any number of people now in their 40s and older who have consumed marijuana over many years, thinking that it has done them no harm at all, but they are as silly as chooks with their heads cut off, quite frankly. It has damaged them terminally. It does damage their brains. I am totally and adamantly opposed to drugs of any kind, and, in this particular case, marijuana.

I listened to and then read again the minister's speech on this matter. I very much support most of what he has said. The main facets of this bill will develop legislation requiring dealers who sell prescribed hydroponics equipment to operate under a full licensing scheme as well as introducing a compulsory online transaction monitoring scheme.

This legislation will require all licensed hydroponic dealers to complete electronic end user statements for reporting sales of prescribed hydroponics equipment. This is a good thing. We have no argument with this at all. It particularly focuses on retail stores and not wholesalers, targeting mainly the one-stop shops.

Most hydroponic wholesalers are interstate and overseas; they are not so much around the traps here. South Australia houses roughly, to the best of my knowledge, 90 hydroponics stores. Not everybody who goes into hydroponic stores, by any stretch of the imagination, who wants hydroponic equipment wants to grow marijuana or dope, but, indeed, it has become a fairly good industry for those who want to get into this sort of thing.

I am aware that South Australia Police believe that these retail outlets may be owned by or linked to serious and organised crime groups. If we can cause a glitch in their operations, all the better, and I am totally in favour of that. On a personal basis, if I become aware of a bit of a story or of marijuana growers operating, I have no hesitation in going straight to the police. I do not hesitate.

It is also interesting to note that, while the December 2007 fires on Kangaroo Island wiped out 100,000 hectares of scrub, they also wiped out most of the dope growers' crops for the year, so there were some beneficial aspects. Last financial year, 7,700 plants were confiscated and, as members know, one female plant grows one pound (equal to 3.5 to 4 kilos), which equates to 450 bags at $25 a bag, so it is an extremely lucrative industry.

Key pieces of equipment that will be affected by this legislation include devices such as control gear, lamp mounts and reflectors (which are designed to increase light and/or heat), ballast boxes, carbon filters and halogen lights (metal hailed lights, that is, high pressure sodium lights and mercury vapour lights of 400 watts or greater).

Other equipment includes cannabis bud or head strippers and rotisserie devices for seedlings. Quite frankly, most tomato growers do not need much of this stuff. Most garden centres and hardware stores do not stock all these prescribed items, so they must go to hydroponic stores to buy them.

The bill currently contains no requirement to maintain records of prescribed hydroponic equipment sold or any record of the purchaser's details within the hydroponic industry. It proposes that it is a condition of the licence that dealers must maintain records of all hydroponic equipment sold and that these must be forwarded to the police.

The bill proposes that it is a requirement for licensees and hydroponic industry employees to verify the identity of persons purchasing hydroponic equipment, and I think this is a critical issue, and I am most satisfied with that. At this stage, it is probably worth reading into the record correspondence from State Retailers Association (SRA), with which we have consulted. Its letter to the Hon. David Ridgway from another place states:

Dear David,

Re Hydroponics Industry Control Bill 2009 Draft Bill

The SRA has an interest in the Bill and previously contributed to the debate relating to the illegal application of hydroponic equipment by people with criminal intent

For your information, we enclose a brief paper on this Bill which clearly shows our concerns and suggestions.

We are very concerned that a specific group of retailers have been targeted to help with the enforcement of the law and then at their own cost and inconvenience.

We are further concerned that those people who use legal hydroponic equipment to legitimately grow illegal produce are now targeted as if they are criminals.

That is a concern. The letter continues:

Further while hydroponic retailers are targeted, many retailers and wholesalers of equipment that has uses that include hydroponics, are not targeted by the legislation, making the intent of the proposed legislation nothing more than a draconian political exercise that appears to 'do good', while in reality driving the criminals further underground, or to other sources of supply.

This Bill is not well considered nor will the public be well served as it offers nothing that will in any way help to control the illegal drug trade.

Unfortunately it would be very easy for the Government to slam any opposition to the bill and that is a political reality which won't encourage positive debate.

Obviously this Bill is set for a quick passage and to that end we would like to meet to discuss it..

The SRA's submission states:

We have previously addressed matters relating to the sale of goods that can be used for legal purposes of growing (vegetables) hydroponically and as such, we are also aware that the same goods can be used to break the law as can a kitchen knife, a fast car, or anything that can be put to inappropriate alternative purposes.

To gain further information before forming any views on the matter of the Proposed Hydroponics Industry Control Bill 2009, we arranged to meet with hydroponic goods retailers to that end.

They were asked to assume that the Bill would proceed in some form and accordingly should assess its likely impact on them as retailers, selling products that were legal, but with the possibility that the customer was planning to act illegally.

Initially it must be said, that the retailers (we met) were not in any way 'organised' and indeed it was quite obvious that many were not known to each other.

I think that is an important fact. The letter continues:

It would be fair to say that there was initially considerable opposition to the proposed bill and then for a variety of reasons, most of which related to superstition as to be Bills' intent and the fact that the discussion paper were short on many vital details. The important Governing Regulations were also not available, which didn't help matters. As a consultation process, this is very unsatisfactory and won't lead to the informed and reasonable comment that could otherwise result.

Generally those business owners present considered that they would achieve approval for a Licence, but didn't know if the same would apply to their staff, because they previously had no reason to pry into their private lives away from the workplace.

I remind members that this is the State Retailers Association's submission. It continues:

As we have already intimated, we ask the retailers to adopt a positive attitude to the draft Bill and to address those issues…

In relation to the licences, the association goes on to state:

1. There is no reasonable opposition to the basic intent of a Licence, nor the process that must be undertaken to obtain one. Retailers we spoke to considered that they would be successful with an application.

2. There is concern that the costs of obtaining a licence haven't been revealed…

3. Considerable concern was expressed however, at the possible interpretation or intent of Schedule 1(2)(c) of the Draft Bill. Does it in fact mean that any retailer who hasn't achieved a Licence within 3 months of the introduction date of the Legislation, will be required to close their business…

4. Concerns have been expressed that licence costs could be deliberately prohibitive in order to make legal trading uneconomic.

5. Will the Police in fact have sufficient time/resources to process all applications for Licences given that the bill seems to be aimed at gathering information for Police use, which they presumably don't have the time or resources to undertake themselves?

6. Why are non-sales staff required to have a licence? What about after-hours cleaners?

Are they required to have a licence? The minister no doubt will take these points into consideration as we go through this bill.

They have a number of other concerns, which I do not think I will read into the record. I know there may be others in the chamber who may wish to make a contribution. I will quote one other question, however: 'Will a retailer require approval to proceed with a sale?' This is under the heading 'Electronic transfer of information'.

All in all, without being tempted to labour the point forever and a day, I indicate that the opposition will support the bill. In my view and the opposition's view it is a sound bill. It makes sense and, returning to where we started from, anything we can do to disrupt, deactivate, disturb and otherwise create an inconvenience or generally make life extremely difficult for drug growers should be put in place, and you will have no problem getting support from this side of the chamber on that.

Ms CHAPMAN (Bragg) (17:32): I indicate that I will be supporting the bill. I wish to record a number of queries and concerns that I have. I say at the outset that the Assistant Commissioner—I think it is of Crime Services—Tony Harrison, and members of the South Australian police force provided consultation with me and other members of the parliament. They offered two briefings. I say the quality of the provision of information at the briefing was excellent, and I found those providing advice to us most helpful. I am not sure of Mr Harrison's exact title, and I do not mean any disrespect to him.

An honourable member interjecting:

Ms CHAPMAN: Assistant Commissioner Harrison. I did not want to reflect poorly on him: I just wanted to have the correct title. As the assistant commissioner, Mr Harrison had outlined to us the purpose of this bill as one of a number of arms to deal with the management of organised crime, particularly in relation to drugs. That was comprehensive and quite persuasive. He also explained to us that, since the introduction of the last wave of legislation—which was to do with all the equipment that is now outlawed as one of the 'tools in the tool box', to use the modern phrase—he was able to tell us that we had moved from some 90 hydroponic retail outlets in South Australia down to 50 or 51, as I understood his information.

All that sounds good, and it sounds as though some of these aspects are working, but the introduction of this bill, which is to impose a licensing regime requiring tests of being fit and proper persons, which is often a process we have, whether it is for lawful drugs for chemists, alcohol outlets and suppliers, guns and weapons, use of dynamite and so on—these are the sorts of hazards in the community which, if they are under the management of people who are not fit and proper or adequately responsible, are a danger to the community. So, we have a licensing regime.

In this instance it seems to be particularly used as a law enforcement means. From my understanding of the briefing, it goes along the lines that there are very few legitimate purposes where one would need to sell hydroponic equipment to be utilised in a lawful way. There may be some market gardeners and so on who would use equipment for their industry, but it is of limited utility out in the community, and to impose a licensing regime and fairly rigid structure to pass the threshold would weed out some of the baddies early on. Perhaps that may occur.

The prescribed equipment will be fairly tight; we were advised at the briefing that consultation with various industries had meant that that would not infringe unreasonably or impose a high level of impracticality on the operation of their businesses, so that seemed to be in order.

One of the acknowledged efficiencies, though, is that, whilst we might set up this regime here, that does not stop trade via the internet or in states where this regime is not imposed. Will people who are in the business for illegal purposes and who access and acquire hydroponic equipment simply buy it over the border? Quite probably. The answer that was provided to us was that at least it is one more hurdle they have to overcome to acquire that property for the illegal purposes of their new crop. I suppose the benefit might be short term, but I think it is still worthy of support.

I am also told that there would be a budget for about a year for one equivalent ASO4 level position, costing about $65,000, to set up the process in the police department. As I understand it, in the second and third years there would then be provision for a 0.5 position, that is, a person half time, to manage the operation of the licensing regime and that effectively, though, it would thereafter be a self-funding scheme on the basis that you would pay an initial application fee of $600 and $300 to $400 annual recurrent fee for this licence and that the cost of this licensing scheme would be met by the revenue it receives. I assume that all of that will not be financially burdensome and that its merits will outweigh that cost in any event.

The final matter, though, is the question of what we are doing by introducing a bill which provides that it will be the police commissioner and the police department who attend to this responsibility of licensing. This does raise a very interesting question. I am aware, of course, that the police commissioner has responsibility for the licensing of firearms. I suppose that is analogous to what is being proposed here, namely, that the police commissioner will be the person ultimately responsible for the licensing regime for the hydroponics industry.

However, it is unusual, and it is unusual for two reasons: first, we have other entities in the state, particularly the Office of Consumer and Business Affairs, which have a specific role to provide for the licensing of a number of industries. The Fair Trading Act of 1987 appoints and sets out the rules in respect of the Commissioner for Consumer Affairs, and one of its specific functions is to enforce codes of practice designed to promote fair trading and to safeguard the interests of consumers.

Admittedly, that is only one purpose of this act. If we were really frank, the purpose of this act is to try to kneecap the production of illegal drugs. But a licensing regime is one method by which we manage a particular activity, industry or product and, in those circumstances, it would be reasonable for the commissioner in that jurisdiction to have responsibility for this. There is another reason. It is not usually appropriate to combine the responsibility of the legislative role and the judicial role, and that is why we have a separate lot of judges to implement what we determine should be law down here. We have a police force to execute the implementation and enforcement of those laws.

In this instance, by setting up a regime which is under the police commissioner, effectively they become judge and executioner in one. There is the collating of the data, which would be the basis upon which a licensing regime would operate for it to be presented for the purpose of assessment to someone independent. Once they are in the licence structure, or if they fail, it would be up to the police force and other law enforcement agencies to implement it.

What is being proposed here, though, is that the Commissioner of Police take this responsibility. I was advised in the briefing that the reason for this is because they have consulted with the police commissioner and he is willing to do it, and apparently the others do not want to deal with it. That may be so. That is really one bureaucrat saying, 'I'll do the job' and the other bureaucrat saying, 'I don't want to have to do it.' What we are required to do—and I think it incumbent on the minister to explore this between here and the other place, at least—is to ask whether this role of the licensing itself should be with the police commissioner or whether, in fact, it should be independent of that.

This is in no way being raised as any reflection on the operation of the police and their officers. In fact, I understand that where they have had a role—for example, in the licensing of firearms—that is something that is properly undertaken. There is a direct link and an expertise in the police department in relation to weaponry and firearms which come with that and which are unique to it. However, I would suggest that an ASO officer, whether they are full time or part time, is better suited to be independent of the enforcers. I ask that the minister look at that matter between the houses.

Mr PEDERICK (Hammond) (17:43): I, too, rise to support this bill, which will require dealers who sell prescribed hydroponics equipment to operate under a full licensing scheme and will introduce a compulsory online transaction monitoring process. In 2005 the Controlled Substances (Serious Drug Offences) Amendment Bill was introduced. That legislation, as well as bringing in serious offences, was designed to deal with the problem of more serious precursor chemicals used for the creation of illicit drugs. I note that everyone within the MFS, SES and the CFS (in the country where I am) is trained now in what to do if they come across an illegal drug lab.

Members may not think that it happens in outlying areas, but several years ago I happened to drive into Tintinara. I was leasing some property down there, and I wondered about the large police presence in the town. It came to pass that a friend of mine, who had a farm closer to the Coorong, had rented out his house but he did not know what was going on inside the house. It was a little embarrassing for him. He was not directly involved, of course. Quite a lot of illegal activity was being done from the rented property. Obviously, the perpetrators were caught, so it can happen anywhere.

In 2007 the Controlled Substances (Possession of Prescribed Equipment) Amendment Bill made it an offence to possess regulated equipment without reasonable excuse. This included equipment related to the cultivation of cannabis, such as metal halide lights, high pressure sodium lights and mercury vapour lights of 400 watts or greater, ballast boxes, devices (including control gear, lamp mounts and reflectors) designed to amplify light or heat, carbon filters, cannabis bud or head strippers, and rotisserie devices for seedlings.

Following this in 2008, the Controlled Substances (Controlled Drugs, Precursors and Cannabis) Amendment Bill acknowledged the difficulties arising from the reliance on police to prove certain intentions with regard to precursor chemicals and prescribed equipment. A specific offence for cultivating cannabis was also created. Both of those bills were supported by the opposition without amendment.

I note that the sandier country of my electorate of Hammond (and it is not something I boast about, but something I want to put on the record) evidently is reasonable cannabis growing country. There have been plenty of cannabis busts up through the Mallee towards Alawoona and Wanbi and, closer to where I live at Coomandook, down the road just north of Coonalpyn there is a patch of scrub where quite a few crops have been grown. The local farmer has discovered this because they tap into his River Murray water supply. River Murray water is pretty precious, especially with the price of water increasing, and these criminals always get caught out tapping into water lines like that.

The hydroponics industry is particularly vulnerable to infiltration by serious and organised crime. I note that there are about 90 hydroponic retail shops in this state, and South Australia Police purports that many have been owned by or linked to serious and organised crime groups.

The main facets of this bill are the licensing requirements and the online transaction monitoring systems that will be put in place. The businesses that are required to be licensed will be retail sellers only who sell prescribed equipment with a prescribed total wholesale value. The prescribed equipment is the items that I have mentioned, and these are already regulated. I note that the State Retailers Association has argued that it has identified over 2,000 sources of prescribed equipment, using hardware stores and electrical suppliers as examples. The capacity for electronic mediums, such as eBay, to be used has also been raised.

The police force is targeting one-stop shops in this bill, and the intent is to lessen the ease of gaining a full hydroponic set-up. The point has been made that most garden centres and hardware stores do not stock all the prescribed items, and specialist stores, such as lighting stores, can apply for an exemption. For the few non-hydroponic stores that stock complete kits, it will be at their discretion to maintain the stock or to go under the licensing regime. It is also noted that the deputy commissioner has not witnessed the prescribed set-up being used for hydroponic growth of legitimate substances (such as tomatoes) as it is simply too expensive on a broad scale.

While it is the commissioner who will decide on the granting of licences based on criminal intelligence, clause 5 of the bill states that he is subject to the minister's control. This is simply a division of powers, which is strengthened in clause 20, which provides that appeals against the commissioner's decisions go directly to the District Court. He will also approve applications to become a hydroponics industry employee, based on the same assessment as licence applications and attracting an application fee of about $600, along with a $150 annual service fee.

The bill outlines the licence application process and the $20,000 fine accompanying contravention of the licensing requirements. The commissioner will assess applications on the basis of a fit and proper person test; namely, discretion will be used as to the applicant's reputation, honesty and integrity and whether they have committed prescribed offences (and these would include firearm and drug offences) in the preceding five years.

I have mentioned the State Retailers Association. It has some concerns about the costs associated with licensing, but the police are currently considering the same schedule as is used within the security industry. The SRA has also expressed concern with respect to the transitional provisions, which state that, at the inception of the new legislation, a hydroponics business can only carry on business until a licence is achieved or until three months expires, whichever occurs first. The police believe they have the resources to evaluate all licence applications within that period.

With respect to online transaction monitoring, some concerns have been raised about the ability to provide real-time information on transactions. The bill states only that prescribed information will be required of the buyer at the point of sale and that the licence holder will have to transfer such information to the commissioner as prescribed, which would possibly be electronically. It is worth noting that the information system will be controlled by SAPOL, because much of the online system is already in place.

In an information paper put out by SAPOL it is stated that licensed businesses will require a computer (obviously, for the online monitoring), and SAPOL asserts that the changes will be phased in and businesses will be provided with a grace period, training and advice. The paper also states that licensed dealers will not be disadvantaged in any way. At this point, there is no mention of real-time submission of information.

One issue with respect to the bill is that it adds significant red tape to the industry. However, this is required to make the industry less vulnerable to serious and organised crime. The bill will not be perfect, in terms of stopping all transactions for the purposes of cultivating cannabis, but will greatly lessen the ease with which it can be done. It is noted that the Hon. David Ridgway from the other place, who conducted the consultation for this bill, believes that stakeholder concerns have been addressed and will continue to be considered as regulations are introduced in line with the bill.

I can certainly say that this goes part of the way to helping to control the scourge of drugs in this state. As the father of a couple of young boys, it is good to see this legislation being put forward. I have seen the results of drug abuse. A friend of mine, whom I believe was heavily involved in illicit substances, is now basically a blithering mess at age 48, and he has been that way for a few years. It is very sad to see. That is all I can put it down to. This is a bloke I have grown up with in my local area and it is a great tragedy. We all know there are far bigger tragedies involving the use of drugs—many lost lives and many wasted lives. The more we can do as a community to pull up this scourge, the better. I commend the bill to the house.

Mr HANNA (Mitchell) (17:52): I am dealing with the hydroponics bill. The government is cracking down on the hydroponics industry. I think everyone in this place supports moves to limit drug use, and I suppose it could be said that is the ultimate aim of this legislation. It basically operates by outsourcing part of the detective function to the owners of hydroponic shops. They get the names of customers who buy the equipment which could be used for illicit drug-related purposes and then the police come in and get the names and they can match them with other information and go around and knock on the door of those people and ask to look at their plants. There might be some tomato growers amongst them but, nonetheless, the provision of information through the mechanism will no doubt assist the police in their duties.

I want to make two comments about two particular clauses of the bill. Clause 7 is another criminal intelligence clause, so we see this provision of secret evidence being used against various segments of our society creeping into more and more legislation—licensing regulation and criminal justice legislation. Secondly, I note in clause 26 the powers of entry and inspection go somewhat further than what we have in our Summary Offences Act.

I do not understand why you would not just require a general warrant, at least, before police force entry into people's premises. If there are reasonable grounds for suspecting a crime has just been committed or if there is evidence to gather, police with a general warrant can bust into a place, anyway, so I do not understand why we need clause 26(3)(c), in other words, the ability to break into premises on the basis of a reasonable suspicion. Why not require a warrant and, thus, the oversight of a magistrate, anyway?

I raise those issues from the point of view of individual rights. We see police getting more and more power to carry out their duties and, of course, we wish them well with their investigations in the ultimate goal of cracking down on drug abuse. However, along the way, I stand up for those people who are entirely innocent but have their shop broken into by police in the search for evidence. I ask for the oversight of a magistrate in providing a warrant before that happens, because I think that is the least we can do to maintain a balance between the individual, the police and the state.

The Hon. M.J. WRIGHT (Lee—Minister for Police, Minister for Emergency Services, Minister for Recreation, Sport and Racing) (17:56): I thank the opposition and also the member for Mitchell for their support. I acknowledge the shadow minister for correctional services, in particular, with regard to the significant support that he provides for this bill and the acknowledgment of the State Retailers Association.

We also received correspondence—probably the same correspondence. I met with representatives of the State Retailers Association. It would be fair to say, as the letter outlines, they had some concerns. I would not say at the end of the meeting that they necessarily agreed with all of what we are doing, but I think it might be fair to say they had a better appreciation, although they still held their views in certain areas.

The shadow attorney-general has made a number of good points, which I have taken note of. I also thank her for her acknowledgment of the briefings undertaken by Assistant Commissioner Harrison and others from the police. She talked about a range of areas—licensing regimes, fit and proper person test, the possibility of things coming from over the border, the costs and the revenue, and the role of the police commissioner, amongst a number of other items which obviously we will take particular note of. Also, of course, the shadow minister for primary industries and resources and then the member for Mitchell indicated their support.

I wish this bill a speedy course through both houses. It is an important piece of legislation which will have an impact upon the hydroponics cannabis growing industry. It is important that we do all we can. Obviously, with this particular bill, bringing into place the licensing of the industry and all the requirements that go with that will be a significant step in the right direction.

Bill read a second time and taken through its remaining stages.