House of Commons - Trade and Industry

Select Committee on Trade and Industry Fourteenth Report

G. LEGISLATION

49. The draft Bill contains a combination of important but essentially technical measures, to reduce legal barriers to electronic commerce and modify the procedure for amending telecommunications licences, and a high-profile new power, by which the law enforcement agencies will be able to decrypt encrypted material in their possession, and related offences. Although not necessarily a source of party political controversy, both the principle and details of this legislation will require full scrutiny by Parliament.

Secondary Legislation

50. The draft Bill proposes secondary legislation for the following purposes:

to implement aspects of the statutory accreditation scheme, including to set out the accreditation criteria. Such regulations would be subject to annulment by either House of Parliament[140]
to delegate some of the accreditation functions of the Secretary of State for Trade and Industry to another body, in the event that a statutory scheme is established. Such an order would require the affirmative resolution of both Houses of Parliament[141]
to update legislation to take account of modern information and communications technologies, particularly with respect to the definitions of words such as "writing". Regulations for this purpose would either require the affirmative resolution of both Houses or would be subject to annulment by either[142]
to bring into force the proposed code of practice, relating to part III of the legislation, by means of the affirmative resolution of both Houses of Parliament[143]
to set out the rules and principles to be used to define what constitutes a significant minority of telecommunications licensees in relation to proposals by the Director General of Telecommunications to modify telecommunications licences. Such an order would be subject to the affirmative resolution of both Houses[144]
to bring into force parts I and III and clauses 7 and 20 of the legislation, once enacted. Such orders would not be subject to parliamentary procedure[145]
to enable the Commissioners of Customs and Excise to delegate to officials within their department the right to issue notices requiring decryption. Such orders would be subject to annulment by either House of Parliament[146]
to establish the rules and procedures of the proposed Tribunal. Such regulations would require the affirmative resolution of both Houses.[147]

We await with interest the Report of the House of Lords Delegated Powers and Deregulation Committee on these provisions.

51. The Government told us that "the secondary legislation made under the Bill is...likely to benefit from formal public consultation", particularly those regulations referring to the accreditation criteria, if required, and to the facilitation of electronic communications and storage by changing the definitions of words in statute.[148] Despite this, there was criticism of the extent to which order-making powers were envisaged in the draft Bill.[149] We are particularly concerned at the proposal that the order necessary to bring part I of the Bill, and thus establish a statutory accreditation scheme, should not be subject to any parliamentary procedure.[150] We recommend that, should the Government judge it necessary to bring a statutory accreditation scheme into force, Parliament should have the opportunity to debate and vote on the issue.

52. A number of respondents to the draft Bill expressed strong reservations about the powers proposed in clause 5 which would allow the Government to prescribe the conditions which a TSP would need to fulfill in order to be accredited.[151] ICL said that the powers could be used "largely unchecked" because there was no requirement for orders made under clause 5 to be the subject of consultation with industry or the explicit approval of Parliament. It warned that "these extensive powers are exactly the ones which cause concern about the possible introduction of key escrow...more practically, they create general uncertainty which harms the UK as a place of choice for electronic commerce."[152] We recommend that the Government make a commitment to consult industry about any regulations made under clause 5 of the draft Bill and that such regulations be subject to the approval of both Houses of Parliament.

53. The most far-reaching secondary legislation is proposed in relation to clause 8 of the draft Bill which, if enacted, would permit Ministers to make amendments to any legislation to facilitate electronic communications or storage.[153] The Government told us that it would consult widely on clause 8 regulations, but that "once general principles have been established and agreed on in the first series of regulations it may no longer be necessary to do this in every case, unless new points arise".[154] We do not think it would be wise for the Government to change existing legislation to take account of modern information and communications technology without full consultation with interested parties simply because departments had decided that they had got the "general principles" of making such changes right first time. We recommend that the Government consult with interested parties before making any change to existing legislation to take account of new information and communications technologies.

Implementation

54. We procured information from the Government which demonstrated that the implementation of the draft Bill, were it enacted, would not be entirely straightforward. The Act is planned to come into force in the following way:

part I is not intended to be brought into effect, unless and until an industry-led accreditation scheme had been demonstrated to fail and after a full public consultation[155]
while part II would come into force on Royal Assent provision exists for clause 7 (about the legal admissibility of electronic signatures) to be delayed until an appropriate order is made
part III would come into force on the making of a commencement order; provision is made for this part of the Act to come into force only once the proposed Tribunal has been established
part IV would come into force on Royal Assent, although, again, provision exists for clause 20 (about modifications of telecommunications licences) to be delayed.[156]

We recommend that Parliament is informed of the Government's detailed plans and timetable for when the legislation would be brought into force.

Scotland

55. In our first Report on electronic commerce we expressed misgivings about the omission from the March 1999 consultation document of any reference to how the Government's proposals regarding electronic signatures would be applied to the Scottish legal system.[157] In its reply, DTI told us that the proposal for Ministers to change the definition of words such as "writing" in legislation was a reserved matter but that Scottish Ministers would be given the power to amend Scots law, "by means of subordinate legislation taken through the Scottish Parliament, subject to the consent of UK Ministers".[158] DTI also told us that "Clause 7 will apply in Scotland, so that electronic signatures and certificates will be admissible before the Scottish Courts."[159]

Human Rights

56. The explanatory notes to the draft Bill contain a statement by the Secretary of State for Trade and Industry, in accordance with s19 of the Human Rights Act 1998, that, in his view, the provisions of the Electronic Communications Bill are compatible with the European Convention on Human Rights (ECHR).[160] A considerable number of respondents to the draft Bill contended that this was not the case, particularly, but not exclusively, in relation to part III of the legislation.[161] Justice and the Foundation for Information Policy Research commissioned a "human rights audit" of part III of the draft Bill which reported "serious concerns" that the draft Bill would, if enacted, contravene articles 6 and 8 of the ECHR.[162] Specific points raised included that:

by requiring persons served with a written notice to demonstrate that they did not have access to an encryption key, section 12 of the draft Bill might contravene the right to a fair trial under article 6 of the ECHR
decryption notices served on criminal suspects under section 10 of the draft Bill might lead to self-incrimination, again protected under article 6 of the ECHR
the safeguards included in part III of the draft Bill might not be sufficient to fulfill the requirement in article 8(2) of the ECHR that interference with respect for private life must be in accordance with the law.

Having certified that legislation does not contravene the European Convention on Human Rights, Ministers must be able to demonstrate, when challenged, that this is indeed the case. We recommend that the Government publish a detailed analysis to substantiate its confidence that part III of the draft Bill does not contravene the European Convention on Human Rights, dealing with the points made to the contrary.

140 Clause 5 Back

141 s3(5) and 3(6) Back

142 clause 8; Cm4417, p15 paragraph 61 Back

143 s16(3), 16(4) and 16(5) Back

144 s20(8), 20(9) and 20(10) Back

145 s24(2) Back

146 schedule 1 sections 4(4) and 4(6); the National Criminal Intelligence Service (p6) described this procedure as too cumbersome Back

147 schedule 2 paragraph 4 Back

148 Cm4417, p15 paragraphs 59-61 Back

149 For instance, responses to Government from the British Computer Society p1 and the Law Society of Scotland Back

150 Responses to Government from EURIM p2, C. E. Sundt p2 and the Corporation of London commented on this issue Back

151 For instance, responses to Government from Interforum p2, EURIM p2, Energis paragraph 3.3, Berwin Leighton p3, Data Protection Registrar p8, Association of British Insurers paragraph 3.14, John Brazier p3, Thus Ltd p2 and C. E. Sundt p2 Back