Government briefing to allay universities' fears over foreign veto laws adds to uncertainty

Australian universities could get the green light to strike deals with international counterparts under the Morrison government’s new foreign veto laws, only to have the agreements ripped up years down the track because “foreign policy considerations are not static”.

As concerns grow within the higher education sector about the reach of a proposed bill giving Canberra the power to cancel international deals, Guardian Australia has learned that the Department of Foreign Affairs and Trade (Dfat) attempted to allay those concerns at a briefing for universities last week.

University representatives raised fears at the briefing that the new laws could have a “chilling effect” on international research collaboration – given that Australia’s foreign affairs minister could initially allow an agreement to enter into force, only to veto at a later stage.

Universities fear such wide discretion could erode international partners’ confidence to enter into negotiations with Australian researchers. Universities have begun lobbying the government to either carve them out of the legislation or make changes to reduce the impact.

Related: Inside the Coalition's foreign veto laws over states and territories: what's included and why

The laws also targets deals states and territories make with overseas governments – and those are the types of agreements that will face the highest scrutiny.

The legislation allows the minister to scrutinise deals that Australian universities reach with foreign universities that lack “institutional autonomy”.

The definition of institutional autonomy is expected to be spelled out only when Marise Payne, the foreign affairs minister, issues more detailed rules clarifying how the bill will work in practice.

But the minister will have the power to tear up arrangements that would have “adverse effects on foreign relations” or were “inconsistent with foreign policy”.

When university representatives suggested this provided very wide latitude, and that foreign policy could potentially change day-by-day, a Dfat official is believed to have replied that “foreign policy considerations are not static”.

Government officials argued the legislation was “country-agnostic” – meaning it was not aimed against any particular country. There was no specific guidance offered when university representatives suggested no Chinese institution would meet the criteria of “institutional autonomy”.

Instead, officials noted that just because an institution was not considered to have autonomy, that would not automatically disqualify a deal – it just meant it would be scrutinised under the bill.

Universities are worried that a minister could disqualify any deal at any point after the notification – giving a wide envelope of discretion to the minister of the day, including after changes of government.

But officials insisted that “the intent is not to impede a beneficial arrangement”.

It is understood the briefing only deepened concerns among universities that the bill was onerous and unworkable in the way it applied to the higher education sector.

The briefing was a teleconference held on Wednesday last week with about 20 people on the call, including Dfat and education department officials and university representatives.

Universities have previously complained of being “blindsided” by the legislation, which the government never flagged through a taskforce it set up a year ago to deal with concerns about foreign interference in the Australian university sector.

A Dfat spokesperson said the bill was “intended to consider Australia’s foreign relations and foreign policy as it relates to every country”.

Related: Labor wants to use Coalition's proposed foreign veto powers to unwind Darwin port sale

“Certain arrangements entered into by universities will also be picked up by the legislation, however the bill is not intended to impede the beneficial business of universities with their foreign counterparts,” the spokesperson said.

“It is expected that much of the routine business of universities will proceed as normal.”

But Vicki Thomson, the chief executive of the Group of Eight, said: “We have serious concerns about this legislation and the extent that it might stop international research collaboration, but we want to work with government to mitigate against that.”

In early September, Universities Australia said it held “grave concerns regarding the effect the laws may have on research collaboration, which is the lifeblood of knowledge and job creation”.

The Morrison government has made no secret of its concerns about the Victoria’s deal with the Chinese government to cooperate under Xi Jinping’s Belt and Road Initiative. But Scott Morrison has insisted he will not prejudge any decision on particular agreements.

Labor has called on the government to use the proposed veto powers to unwind the sale of Darwin’s port to a Chinese company.

In addition to universities, it is understood officials have been briefing state and territory governments and councils on the legislation over the past few weeks.