Mal Brough (Longman, Liberal Party, Minister Assisting the Prime Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The Corporations (Aboriginal and Torres Strait Islander) Bill 2005, introduced into this House in June last year, is intended to repeal and replace the Aboriginal Councils and Associations Act 1976.

The Corporations (Aboriginal and Torres Strait Islander) Consequential, Transitional and Other Measures Bill 2006 sets out the transitional arrangements for corporations moving from the old act to the new.

The Aboriginal Councils and Associations Act was developed in the 1970s to cater for landholding corporations linked to the first land rights legislation. It was meant to offer a simple process for incorporation with a minimal need for regulation. However, the act is no longer adequate.

There are now 2,500 organisations registered under the act. As the sector grew, Indigenous Australians became more dependent on these organisations for the provision of services, including essential services and management of assets. They are responsible for hundreds of millions of dollars of public funding for income and assets. Indigenous Australians want these organisations to operate efficiently and to be more accountable to them.

With a view to modernising the operation of the sector, the Registrar of Aboriginal Corporations commissioned an independent review of the act in 2001. The review was led by law firm Corrs Chambers Westgarth. Team members included specialists Senator Brennan Rashid, Professor Mick Dodson, Christos Mantziaris and Anthropos Consulting.

The review took almost two years to complete. Questionnaires were sent to all corporations under the act as well as to 345 Indigenous corporations incorporated under other legislation. Advertisements were placed in all key Indigenous publications. There were several rounds of consultations and two workshops in Alice Springs. Information sheets and consultation papers were distributed widely.

The report of the review was made available publicly for comment in December 2002. The government presented its response to the review in January 2004, after considering further submissions. The bill, introduced in June 2005, largely reflects the recommendations of the review and that lengthy consultation process.

The threshold question was whether there was a need for specific legislation for Indigenous corporations. It was clear from the consultations that many Indigenous corporations need special support and regulation tailored to their circumstances. Their incorporation legislation also needs to meet the requirements of special statutory regimes including native title.

The flexibility and special measures required are not available from other corporate regulators such as ASIC, which are primarily concerned with relatively large trading corporations.

However, special legislation needs to be consistent with current practices of other corporate regulators. Therefore, the backbone of the reform is the application of mainstream corporations law to these corporations—for example, the reforms largely replicate modern standards of duties for officers, directors and employees that exist in the Corporations Act.

The reforms also overcome regulation gaps—for example, managers of Indigenous corporations will now have duties like those of directors and will no longer be able to escape scrutiny. That is a measure that I know will be very warmly welcomed in many Indigenous communities. Directors and managers can be disqualified and their names put on a register of disqualified directors so that they will be clearly visible to other corporations. The reforms include strong measures to avoid nepotistic behaviour. Importantly, the registrar will be able to check subsidiaries and trusts related to Indigenous corporations, some of which hold substantial funds and assets.

To protect the members of corporations, funding bodies and ultimately the Australian taxpayer, a range of offences are covered in the bill. The offences largely reflect those set out in the Corporations Act and have been developed on the principle that similar obligations should attract similar consequences.

Special measures that address the unique circumstances of many Indigenous corporations have been a key consideration in the CATSI bill’s development. One such measure allows the registrar to appoint a special administrator—a modernisation of a measure currently available under the Aboriginal Councils and Associations Act.

This measure is an important safeguard to protect the interests of those communities that might otherwise suffer the consequences of corporate failure especially when it could threaten a community’s essential services and infrastructure such as municipal services.

Corporations will be able to tailor their corporate governance practices to better suit their members and communities.

Smaller corporations will have fewer reporting requirements in proportion to their size. Larger, more sophisticated organisations will have more rigorous reporting arrangements in line with modern corporations law.

The changes offer a practical response to the need for good governance in Indigenous communities: Indigenous people can structure their corporations to create the best outcomes for their particular needs. It allows for the registrar to provide a range of assistance from compliance support to a rolling program of ‘good governance audits’.

Since the introduction of the bill there has been further consultation. It has been subject to scrutiny by the Senate Legal and Constitutional Affairs Committee for almost 12 months. We will be introducing a number of amendments, some of which are a result of the committee’s work. Those amendments will offer greater flexibility than the bill originally provided for.

This bill before the House consists of three schedules—amendments to the Native Title Act 1993, consequential amendments and transitional provisions.

Schedule 1 to the bill sets out amendments to the Native Title Act 1993 that correct a technical problem relating to corporations formed to hold or manage native title.

Schedule 2 to the bill sets out consequential amendments. It also repeals the Aboriginal Councils and Associations Act.

Schedule 3 sets out the transitional provisions providing a seamless transfer of corporations. These provisions preserve the legal status, office bearers, assets and liabilities of corporations in their precommencement form. This is designed to minimise the administrative burden on corporations while providing certainty of operation for corporations, their members and stakeholders.

While the new arrangements will commence on 1 July 2007, transitional corporations will have up to two years to meet the requirements of the new act.

Support such as an 1800 hotline, do-it-yourself tools, troubleshooting sessions and compliance training on the legislation will be available through the Office of the Registrar of Aboriginal and Torres Strait Islander Corporations, to help corporations through the process where it is needed. The Registrar’s office has already embarked on some of these measures. A recent $28 million budget initiative of the Howard government to strengthen the capacity of Indigenous corporations will include funding associated with implementation of the bill.

The reforms will improve Indigenous corporate governance and will help to produce better outcomes for Indigenous Australians. These consequential, transitional and other measures assist implementation and ensure the success of Indigenous corporations and ultimately Indigenous Australians. I commend the bill to the House.

Debate (on motion by Mr Griffin) adjourned.