Aboriginal Corporations: New legislation set to pass

On 25 August 2021, the Corporations (Aboriginal and Torres Strait Islander) Amendment Bill 2021 was introduced to Parliament following reviews and consultations conducted over five years. The Bill proposes wide-ranging reforms to the law including:

  • the content of rule books,
  • financial and remuneration reporting,
  • audits and financial report reviews,
  • how membership applications and information are handled,
  • how meetings are conducted and how extensions are secured,
  • increases to the range of regulatory powers to investigate and penalise non-compliance,
  • options for the establishment of subsidiaries, two-member corporations and joint venture corporations,
  • how books are records are dealt with,
  • how related party transactions are addressed,
  • the appointment of independent directors,
  • how external administrations are managed and triggered,
  • the introduction of whistleblower protections and other provisions to align the law with the Corporations Act 2001,
  • establishing an account for handling unclaimed property,
  • the use of technology and other platforms to streamline meetings, resolutions and notices by corporations and the regulator, and
  • aligning the Native Title Register with the corporation’s status under the Corporations (Aboriginal and Torres Strait Islander) Act 2006.

On 14 October 2021, the Senate Finance and Public Administration Committee responsible for reviewing the Corporations (Aboriginal and Torres Strait Islander) Amendment Bill 2021 recommended the passage of the legislation without further amendment. A dissenting position from Labor members highlighted ongoing concerns from Aboriginal land councils and peak bodies about the failure to adopt past review recommendations. These included:

  • an increase in the regulatory burden and exposure to penalties without sufficient flexibility,
  • the lack of a separate part addressing the unique position of prescribed bodies corporate,
  • the potential for new ‘two member’ Aboriginal corporations to be exploited in accessing government procurement benefits and undermine Aboriginal community control, and
  • the lack of a clear object about the law’s role in building capacity, modernising governance and taking into account the traditions and circumstances of Aboriginal and Torres Strait Islander communities.

An earlier review by the Senate Standing Committee for the Scrutiny of Bills raised concerns with the framing of certain offences under the Bill, to the extent that they seek to undermine key principles in the application of criminal penalties. In particular, the 1 September 2021 report criticised:

  • characterising a failure to produce certain books and records as offences, thus reversing the onus of proof, while only providing non-specific defences of ‘reasonable excuse’ to be proven by a corporation after the offence is deemed to have occurred,
  • classifying a failure to produce a member register as an offence of strict liability (no fault) while also exposing a corporation to criminal liability through imprisonment, contrary to Commonwealth government guidelines requiring fault to be established to justify imprisonment,
  • removing the privilege against self-incrimination in order to compel the production of books, without providing sufficient alternative protections to limit the use of information obtained in subsequent proceedings.

At this time, the Senate has not proposed any amendments to the Bill in response to either report, which looks set to pass in the coming months. All Aboriginal corporations will need to review their rule books to ensure they comply with the wide-ranging reforms, and directors and key management personnel will need to be across how this affects compliance, reporting and record keeping practices and procedures. The Bill will come into effect as a whole on the first 1 January or 1 July after the date on which it receives Royal Assent.

For more information about how this might affect you, contact Maria Lamattina at Perth Commercial Lawyers.