Marise Payne (NSW, Liberal Party) Share this | Hansard source

I thank Senator Bartlett for his contribution and his observations in relation to the Senate Standing Committee on Legal and Constitutional Affairs and for his contribution to the report of the committee on the Corporations (Aboriginal and Torres Strait Islander) Bill 2006 and related bills. As I just observed to Senator Vanstone, these have been a long time in the making. They most certainly began as bills within her previous portfolio, which contained Indigenous affairs. We now find ourselves in October 2006 dealing with the substantive package, so its development has come some way. I also should acknowledge on the record the assistance of my colleagues at this time last year when the bills were first considered by the committee. As members of the Senate will know, due to some significant family challenges I was unable to deal with the bills in the first instance. Senator Scullion in particular took that role up for me and to him and to other committee members I am particularly grateful.

I want to make a few comments about the structure of the package of bills and the process of the committee inquiry. The achievement of these bills is to address the status of about 2,500 Aboriginal and Torres Strait Islander corporations which are registered under the Aboriginal Councils and Associations Act 1976. Many of those corporations play an essential role in delivering services to remote Indigenous communities. For the delivery of those services, a very significant amount of public funds is provided. The corporations may also hold land for remote Indigenous groups. Most native title corporations are registered under the current ACA Act, as are most remote Indigenous arts centres.

It is a statement of the obvious in many ways to say that since 1976 there have been substantial changes in the corporate regulatory environment in Australia. The old act is over 30 years old. It is not really in line with modern corporate governance and the accountability standards which are reflected in the substantive Corporations Act. This package provides a specific regulatory framework for Indigenous corporations in particular to deal with both the risks and the requirements of the Indigenous corporate sector.

As Senator Bartlett observed in his remarks, such corporations are many and varied. It is not simple; it is not a straight line. The corporations that fall within the provisions of these bills are often very different. They have different activities and different requirements and are of very different sizes. What the bills seek to do is to provide some flexibility and appropriate regulatory powers and compliance support, which are not available from other corporate regulators like ASIC, which are primarily concerned with relatively large trading corporations.

What is noted in bringing this package together is that special legislation like this needs to be consistent with the current practices of other corporate regulators. So the backbone of the reform process is the application of mainstream corporations law to these corporations, bearing in mind their special nature. The reforms largely replicate the modern standards of duties for officers, directors and employees that exist in the Corporations Act. They also address some regulation gaps—for example, managers of Indigenous corporations will now have duties which mirror those of directors and will be subject to appropriate scrutiny. Directors and managers can be disqualified. Their names can be put on an appropriate register to make them visible. A person who is disqualified from managing a corporation under this legislation will also be recognised and disqualified from managing a corporation under the Corporations Act and, appropriately, vice versa.

We also have strong measures in the bills to mirror the requirements of the Corporations Act for disclosures and approvals required for related party transactions and measures to avoid what is described as nepotistic behaviour. Under the legislation, the registrar will also be able to check subsidiaries and trusts related to Indigenous corporations. Some of those hold substantial funds and assets. To protect the members of corporations, funding bodies and ultimately the taxpayer in this country, there are a range of offences covered in the bills. They largely reflect those in the Corporations Act and have been developed on the principle that similar obligations should attract similar consequences.

In the development of the CATSI bills, the unique circumstances of many Indigenous corporations—to which I referred earlier—have been considered. One of the measures in the bills, which also exists under the current ACA Act, is the power for the registrar to appoint a special administrator. It is an important safeguard. It protects the interests of those communities that might otherwise suffer the consequences of a corporate failure, especially when it could indeed threaten a community’s essential services and basic infrastructure, such as municipal services.

Corporations will be able to tailor their corporate governance practices to better suit their members and their communities. Smaller corporations will have fewer reporting requirements in proportion to their size. Larger, more sophisticated organisations will have appropriately rigorous reporting arrangements in line with modern corporations law. The bills offer a practical response to the need for good governance in relation to Indigenous communities. They enable Indigenous Australians to structure their corporations to create the best outcomes for their particular needs. They are very valuable initiatives.

There are three bills in the package. The first bill, which was introduced into parliament in 2005, is the Corporations (Aboriginal and Torres Strait Islander) Bill 2006. That is essentially the one that replaces the Aboriginal Councils and Associations Act 1976.

The second is the Corporations (Aboriginal and Torres Strait Islander) Consequential, Transitional and Other Measures Bill 2006. That is being introduced to support the implementation of the C(ATSI) Bill. It includes a range of consequential amendments—some very basic ones and some transitional arrangements—which set up measures that enable corporations to move from the ACA Act framework into this modern and new CATSI regime. That bill also contains a minor amendment to the Native Title Act 1993 which corrects a technical problem that prevents replacement agent prescribed bodies corporate, which are a type of corporation that can be formed to hold or to manage native title, from being recognised as registered native title bodies corporate under the Native Title Act.

Finally, the Corporations Amendment (Aboriginal and Torres Strait Islander Corporations) Bill 2006 also supports the implementation of the primary bill. It serves to amend the Corporations Act 2001 to ensure that there is appropriate interaction between both those regulatory regimes and to close off any regulatory gaps where they may appear. It does that quite simply by confirming that section 57A of the Corporations Act, which provides that the term ‘corporation’ applies to any body corporate in Australia, applies to CATSI corporations for the purposes of the Corporations Act. It also makes sure that certain parts of the Corporations Act do not apply when there are corresponding provisions in the C(ATSI) Bill, which is essentially the point of this process.

That bill also aligns the disqualification provisions of the C(ATSI) Bill with those in the Corporations Act, creating a scheme where persons disqualified from managing corporations in Australia are recognised under both regimes. That will be a process which assists in the implementation of a national standard of disqualification that currently applies only to directors and officers of companies which are registered under the Corporations Act. I understand that those amendments to the Corporations Act have been agreed to by the Ministerial Council for Corporations.

It was clear in the committee process, which commenced last year, that, as Senator Bartlett alluded to, some significant concerns were raised by witnesses in submissions that were provided to the committee—about how the implementation process would work, how the transition would work and how existing corporations would manage this process. In response to that, the committee’s suggestion was that there was really a need to see the transitional bill and the provisions of the transitional bills before final sign-off could be given on the substantive legislation. After some period, I think in the mire of the drafting process, that bill appeared. As a result of that, the committee was finally able to report.

As a result of the ongoing consultation process by the government in response to the committee and in response to stakeholders in this area, we also have before the chamber a set of parliamentary amendments to the Corporations (Aboriginal and Torres Strait Islander) Bill 2005 put forward by the minister. They are going to assist in addressing some technical oversights in the C(ATSI) Bill—for example, ensuring that all CATSI corporations fall into the categories of small, medium and large, to create a more tailored reporting scheme.

Those amendments also respond to concerns which, as I said, were raised by stakeholders who made submissions and appeared before the then Senate Legal and Constitutional Committee inquiry last year. I think that is an important part of the process. I think that responsiveness is valuable and should be noted here in the chamber. It has been a constructive engagement between the Senate committee and the parliament to bring this forward.

In conclusion, I should also acknowledge the preparation of this report by Alistair Sands, from outside the normal legal and constitutional committee secretariat. We are very grateful for Alistair’s assistance in the process. I look forward to the rest of the debate on the bills.