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Chapter 2 - The Bill
Part 1 - Preliminary
2.1
The Bill provides that it objects are:
- to impose environmental, employment, health and safety and
human rights standards on the conduct of Australian corporations or related
corporations which employ more than 100 persons in a foreign country; and
- to require such corporations to report on their compliance
with the standards imposed by this Act; and
- to provide for the enforcement of those standards.[1]
Background
2.2
The Bill expressly provides that it has extraterritorial
operation.
Part 2 – Corporate Codes of
Conduct
2.3
A corporation, to which the Bill applies, will
be required under Part 2 of the Bill to:
- take all reasonable measures to prevent its activities causing
“any material adverse effect on the environment” and monitor the environmental
impact of its activities;[2]
- promote the health and safety of its employees;[3]
- not benefit from forced labour;[4]
- not benefit from the labour of children under 14 years of age;[5]
- pay its workers a “living wage”;[6]
- not dismiss workers for reasons of illness or accident;[7]
- allow workers to associate and bargain collectively;[8]
- allow workers to submit complaints to “independent authorities”;[9]
- observe minimum international labour standards;[10]
- except under certain circumstances, such as government sponsored
policies to promote “greater equality”, refrain from discriminating against
persons in relation to employment on the basis of
race, colour, sex, sexuality,
religion, political opinion, national extraction or social origin;[11]
- observe the tax laws of each country in which it operates;[12]
- ensure that its products meet the “required standards for
consumer health and safety” in Australia and, simultaneously, the standards
required in the overseas jurisdictions in which the corporation is operating;
and[13]
-
refrain from “misleading or deceptive conduct”.[14]
Part 3 – Reporting
2.4
Part 3 of the Bill specifies the reporting
required of the corporations to which the Bill applies. Each of these
corporations will have to submit annually a comprehensive Code of Conduct
Compliance Report to the Australian Securities and Investments Commission.[15]
2.5
Each Code of Conduct Compliance Report would
require details of all of the following:
- the corporation’s financial and operating results for the
previous year;
- the members of the corporation’s board of directors and their
remuneration;
- the corporation’s five “most significant executive officers” in
each country the corporation operates in, except Australia, and the
remuneration of these executive officers;
- the shareholders of more than 5% of the issued capital of the
corporation;
- the number of employees of the corporation in each country in
which it operates, except Australia;
- the total remuneration paid to the corporation’s employees in
each country the corporation operates in, except Australia;
- the environmental impact of the corporation’s activities in each
country that it operates in, except Australia (the contents of this
environmental impact section would be “prepared by an independent auditor”);
-
“foreseeable risk factors” that might arise as a result of the
corporation’s activities in each country it operates in, except Australia;
-
the corporation’s contraventions, if any, of standards or laws
relating to the environment, employment, health, safety and human rights in
each country in which the corporation operates, except Australia;
- the corporation’s social, ethical and environmental policies; and
- “any other matter” relevant to the corporation’s environmental,
employment, health, safety and human rights standards.[16]
2.6
If a corporation already has provided in another
mandatory report to the Australian Securities and Investments Commission
information that is required to be included in a Code of Conduct Compliance
Report, then such information may be omitted from that corporation’s Code of
Conduct Compliance Report.[17]
2.7
Any corporation which, “without reasonable
excuse”, does not lodge a Code of Conduct Compliance Report is “guilty of an
offence punishable on conviction by a fine not exceeding 2000 penalty units”.[18]
2.8
Where an executive officer of a corporation knew
that, or was “reckless or negligent” regarding the fact that, the corporation
would not submit its Code of Conduct Compliance Report, and this executive
officer could have influenced the corporation to submit its Code of Conduct
Compliance Report but failed to do so, then that executive officer is guilty of
an offence and “liable, on conviction, to pay a fine not exceeding 1000 penalty
units”.[19]
2.9
The Bill, if enacted, would require the
Australian Securities and Investments Commission to prepare an annual report on
compliance with the provisions of this Bill and forward this report to the
Treasurer by the end of each calendar year so that the Treasurer may table the
report in each House of the Parliament.[20]
Part 4 - Enforcement
2.10
The Bill provides that an Australian corporation
operating overseas, and to which this Bill applies, which contravenes Part 2 of
the Bill will be “liable to proceedings for the recovery of a civil penalty”.[21]
2.11
The Bill also provides that where an executive
officer of a corporation knew that, or was “reckless or negligent” regarding
the fact that, the corporation would contravene Part 2 of the Bill, and this
executive officer could have influenced the corporation to submit its Code of
Conduct Compliance Report but failed to do so, then that executive officer also
will be deemed to have contravened Part 2 of the Bill.[22]
2.12
The Treasurer, the Attorney-General and the
Chairperson of the Australian Securities and Investments Commission, within six
years of a corporation or person contravening Part 2 of the Bill, will be
allowed under the Bill to apply on behalf of the Commonwealth to the Federal
Court of Australia for an order that the contravening corporation or person pay
the Commonwealth a pecuniary penalty not exceeding 10,000 penalty units.[23]
2.13
The Bill also would allow persons, both natural
and corporate, who have suffered loss or damage, or who are “reasonably likely
to suffer loss or damage”, or who are acting on behalf of persons who have
suffered, or are likely to suffer, damage, from the activities of Australian
corporations overseas, to bring actions in the Federal Court seeking
injunctions and/or compensation.[24]
2.14
The last clause of the proposed Bill is a
standard clause which would authorise the Governor General to make regulations
for the “carrying out or giving effect to this Act”.[25]
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