Bernie Ripoll (Oxley, Australian Labor Party) Share this | Hansard source

I rise to speak in support of the Corporations Amendment (No. 1) Bill 2008 [2009]. This bill is simple but quite important. It acknowledges the need to recognise in Australia the disqualifications and penalties placed on certain people in other jurisdictions and allows those penalties to be carried through under Australian law. The bill proposes to amend the Corporations Act 2001 to provide for the recognition in Australia of the disqualification of people in other countries. These are people who have been disqualified from managing corporations or the like. We will be closing a loophole, a gap, in our own regulatory system which can be taken advantage of by people who are disqualified from managing a corporation in another jurisdiction. For example, a person might be disqualified by the courts in New Zealand, for either criminal activity or malpractice in New Zealand, but then they might decide to come to Australia and take up practice doing what they did in New Zealand. I think it is fair to say that, if asked whether this is a just and fair thing, an ordinary person would answer no. If a person is disqualified from managing a corporation in New Zealand and is found guilty of whatever offence they have been charged with then that person should not be able to simply get around the law by transferring to Australia.

Australia and New Zealand share a special relationship. It is a long relationship and we are very good friends across the Tasman. We share a lot of common aims and goals and we share parts of our cultures. There are certainly plenty of Kiwis here in Australia, and I think we understand each other very well. That extends beyond our close ties, our shared language and our historical perspectives and relationships to the way we manage our legal and regulatory frameworks. The closing of the regulatory gap in our legislation, through this bill, follows on from a policy goal to progressively bring New Zealand and Australia closer together in this area—and there is a government memorandum of understanding on business law coordination.

It follows on from our view that there needs to be uniformity and consistency across all jurisdictions, including state and federal jurisdictions. We need to close the loopholes. Among the simplest examples to put on the record are driver’s licences and speeding fines. If you cop a speeding fine or lose points for bad driving behaviour in, for example, Queensland, why should you be able to get away with it in New South Wales? In the end, it is the same country, one jurisdiction, and there should be some uniformity across the different states of Australia. This is being done across a whole range of licensing, regulation and other bits of legislation in this country.

I have been talking about the close ties and the close relationship between Australia and New Zealand. We are two almost borderless nations with a free flow of capital, ideas, employment and labour. The more you remove the barriers—so that people can work in the different jurisdictions and so that you can move capital, labour and business interests between them—the more you have to have uniform regulatory arrangements in the two jurisdictions. So it makes perfect sense for this parliament to amend the Corporations Act to close some of those regulatory gaps. I commend the Minister for Superannuation and Corporate Law, Senator the Hon. Nick Sherry, for bringing this legislation forward.

It was initially envisaged that this mutual recognition would go beyond New Zealand. With what is in this bill the only other prescribed jurisdiction will be New Zealand. But, as time progresses and we negotiate with our other good friends in other jurisdictions across the globe, we will be moving our regulatory regimes into line across other jurisdictions. It makes perfect sense when you look at the regulatory environments in countries where people can easily and almost seamlessly move capital, labour and business across borders. The regulatory rules that apply across those borders are very similar, if not the same. I am sure people can think of a dozen, if not more, examples of where this could be applied in other areas. It could apply in medicine or in the practise of law itself. Earlier today we talked about bringing into line some of the regulations for tax agents. Again, it is about uniformity and consistency across jurisdictions. This is a logical progressive step in that direction.

This bill does two main things. It makes it possible for an Australian court to automatically disqualify from managing a corporation in Australia a person who is disqualified from being a director or from being concerned in the management of a foreign company by a court in a prescribed country. To put that in layman’s terms, under this bill a person who has been disqualified by a court in another country—at this stage, it is only New Zealand—will be automatically disqualified in Australia.

The bill goes further, to provide an extension of the powers of the Australian courts to disqualify people from the same provisions as I have just described—from managing corporations—if that is done on application by ASIC, the Australian Securities and Investments Commission. So the courts will be given the power here in Australia to disqualify a person proscribed in another jurisdiction from being a director or taking part in the management of a company, provided that our courts consider—and I think this is important—that that disqualification in another jurisdiction actually was appropriate and justified. It is probably a caveat worth noting that, while there is an automatic disqualification—so people have been disqualified in another jurisdiction, the court has already made that decision, and it is then automatic here in Australia—the bill also extends the power of the Australian courts and the Australian Securities and Investments Commission to deem, if they bring it to a court, whether that disqualification here in Australia is actually appropriate. I would hazard a guess that there will not be too many of these because, if you are disqualified in another jurisdiction, I would think that you are pretty well gone, but there may be some extenuating circumstance where a person could apply and actually make the case that the disqualification was not appropriate and did not need to be justified here in Australia.

This will ensure that all disqualifications—people being disqualified from managing companies and being company directors—are effective under Australian law and, very importantly, have been made the subject of deliberation by a court. Whether that court is an Australian court or a foreign court is not so much the issue, and that is why in this bill we have recognised both. If there is to be, as in this particular case, trans-Tasman agreements on this then there must be the ability, obviously, for that country not only to recognise our court but for us to recognise their courts and vice versa.

I think this is a really positive step forward. This is going to send a very strong message to the corporate world that simply trying to skirt around disqualifications by moving jurisdictions—and one of the simplest, of course, would be from Australia to New Zealand—is no longer acceptable; you are just not going to get away with it. Maybe that will make a few white-collar criminals have a bit of a think about their actions. If not, it is just going to mean that they cannot practise any longer. Either way, I think that is a good thing. I certainly know and understand that this is obviously something that has been a matter of discussion between our two nations—that of New Zealand and Australia—and something that is supported by both.

I eagerly await the time when, at some point in the not-too-distant future, we quickly begin to add other jurisdictions—that we start moving through the jurisdictions perhaps primarily in our own neighbourhood, such as in the Pacific rim and the South Pacific, and that we look to our trading partners and those other countries that we have trade relationships with. I think that would be an appropriate way forward for us to deal with these. We could start looking at those that we do the most trade with—the ones where we have the strongest and longest-standing relationships—and we can sit down and negotiate on the same basis: that nobody in any jurisdiction wants to allow crooks to get away with the crime. If somebody is disqualified in a foreign jurisdiction then I can see no reason why they should not be disqualified globally, if that principle applies. In the end that is what this is about. This is really a global application and recognition of a person’s crime and their disqualification.

I have no hesitation at all in relation to what this provides for and what it will mean. As with many things in this type of area, it is about a couple of basic principles, one being the integrity of our systems—and I mentioned the integrity of our legal system in a previous speech, albeit in a slightly different area. In Australia I think we are all very great believers in the rule of law and in the importance of abiding by the law, and all those who want to exercise the advantages of our great country should also abide by the same principles that we apply to ourselves—those belonging to the rule of law—and that that should apply to other jurisdictions as well. So I think this is a really positive and good step forward. While it is only at this stage an agreement which initially just prescribes New Zealand, I can see a day in the not-too-distant future where we grow that list. I commend this bill to the House.

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