AICD submission on SOCI Act Ministerial directions powers

On 1 May 2026 the AICD made a submission to the Department of Home Affairs on proposed amendments to Ministerial Directions Powers in Part 3 of the Security of Critical Infrastructure Act 2018 (SOCI Act).  

The AICD accepted that in certain exceptional national security circumstances, a Ministerial direction is an appropriate last resort mechanism to address significant risk control weaknesses at an entity and to manage the immediate response period during a significant incident. However, the consultation paper did not clearly set out the policy case for such an expansion of unfettered Ministerial powers. Further, we were concerned that the proposed directions powers do not sufficiently reflect the associated legal complexity and challenges, including potential conflict with directors’ duties under the Corporations Act 2001 (Corporations Act).

Our key points were:

• Measure 2 – Conditions Power. We recognised that in certain exceptional circumstances there may be a necessity for a Minister to direct a SOCI entity to change governance arrangements, information flows and security settings. We were concerned though that what is proposed is far broader than the conditions regime under the Foreign Acquisitions and Takeovers Act 1975. We were particularly concerned with the potential conflict with directors’ duties under the Corporations Act where an entity is directed to exclude a director from certain decisions, information flows and oversight functions.  

• Measure 3 – Restrictions on the use of high-risk vendors, products or services. We in-principle supported a formal legislative mechanism by which the Government can prescribe or list high risk products, service or vendors which pose a heightened national security risk and that SOCI Act entities are prohibited from using. However, were not satisfied that this mechanism should reside as a Ministerial direction power given the limited transparency on the process and the inability of impacted parties to engage on the cost and complexity of any direction. Our view is that such a mechanism should be a formalised administrative process within the SOCI Act and the supporting SOCI Act Rules with a comprehensive consultation process that allows due consideration of the complexities of prescribing a particular vendor.

• Measure 4 – Delay continuous disclosure requirements. We considered there are very significant legal complexities with the draft proposals and a risk of unintended consequences. Before progressing this proposal, it is imperative that further consultation with relevant legal experts is undertaken, as well as the ASX, to ensure that entities and directors are adequately protected and not exposed to serious consequences (including potential shareholder class actions) for breaching continuous disclosure rules. At a minimum, we strongly recommended that the model that Home Affairs pursues includes an explicit statutory safe harbour in the Corporations Act as essential to protect directors who act in good faith to comply with a Ministerial direction not to disclose information.