The telecommunications provider Cisco has contradicted Peter Dutton’s claims the government’s new bill to compel tech companies to break digital encryption will not result in “back doors” in their products.

At a committee hearing in Canberra on Friday, witnesses from Cisco, Optus and Telstra called for a better definition of the bill’s main safeguard that tech companies cannot be asked to build “systemic” weaknesses into their products.

The parliamentary joint committee on intelligence and security is examining the Coalition’s telecommunications (assistance and access) bill amid concerns raised by tech giants and human rights groups that it would result in weaknesses in digital privacy technologies and does not contain sufficient safeguards for consumers.

Under the bill Australia’s attorney general would gain the power to issue a “technical capability notice” requiring a communications provider to build a new capability that would enable it to give assistance to Asio and interception agencies.

Earlier in October the home affairs minister, Peter Dutton, said the bill did not permit creation of back doors and “there will be no weakening of encryption”.

Asked about Dutton’s comment, Eric Wenger, the global director of cybersecurity at Cisco, told the committee if it were mandated to build “any capability” that did not previously exist to access communications “that would contradict our policy that we don’t have back doors in our products”.

The Communications Alliance’s director of program management, Christiane Gillespie-Jones, noted Australia had banned Huawei from building the 5G network owing to foreign interference concerns.

“I think it needs to be very clearly stated this law is doing exactly the same to our own Australian entities when they are exporting and when foreign governments and foreign entities are considering whether to use any of their products and services because they are subject to the same concerns,” she said, warning it could harm $3.2bn in Australian IT exports.

The chair of the committee, Liberal MP Andrew Hastie, took umbrage at this, replying: “Respectfully, we’re not a communist regime.”

Gary Smith, the head of regulatory compliance at Optus, said the definition of “systemic” weakness in the bill’s safeguard would be “difficult to grapple with in practice”.

Earlier, the secretary of the home affairs department, Michael Pezzullo, was asked about the definition of “systemic” weakness and said the department believed the meaning is clear – “pertaining to the whole system”.

Hamish Hansford, a first assistant secretary of the department, said the term in the bill had its “ordinary meaning” but would “mean different things” depending on the product and company.

The shadow attorney general, Mark Dreyfus, led witnesses through examples. Only mandating companies maintain an encryption key escrow arrangement – in which decryption keys are held to allow a third party to gain access – was clearly judged to be prohibited by the bill.

Home affairs witnesses did not rule out that the bill would allow law enforcement agencies to require a company to put a listening device in a speaker, deploy a tool to unlock a particular user’s device, or to add an additional end point to an encrypted service with multiple end points.

In its submission the Australian Human Rights Commission warned the government could compel a provider to send users a Trojan horse notification to update software which in fact allows law enforcement agencies to access a user’s phone messages.

Home Affairs witnesses said the attorney general would assess what constituted a “systemic” weakness before issuing a technical capability notice, in consultation with the industry and an appointed independent expert.

The president-elect of the Law Council of Australia, Arthur Moses, warned that without a definition in the bill a “shifting sands” approach on what constituted systemic weakness could develop over time.

Moses noted the attorney general’s judgment could be challenged in court, so the legislature might want to clearly define the term or risk courts taking a different view.

The head of Asio, Duncan Lewis, said the legislation was designed to help law enforcement agencies prevent potentially “catastrophic” crimes such as terrorist attacks.

He warned that by 2020 all communications would be encrypted, which he said amounted to “potentially the most significant degradation of intelligence capabilities in modern times”.

The Australian federal police commissioner, Andrew Colvin, said notices requiring telcos to provide technical assistance could only be given after an existing warrant to intercept digital communications.

He argued that requiring a further warrant would be akin to police having gained one warrant to search a property then requiring a second warrant to open the front door.