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Corporations
Amendment (Simple Corporate Bonds and Other Measures) Bill 2013
Introduced into the House of
Representatives on 20 March 2013
Portfolio: Financial Services and
Superannuation
Summary of committee view
1.1
The committee
seeks further information on the compatibility of these measures with the right
to freedom of expression and the right to be presumed innocent.
Overview
1.2
This bill amends
the Corporations Act 2001 to:
- require body
corporates to issue a two-part simple corporate bonds prospectus when certain
bond issuances occur;
- enable simple
corporate bonds to be traded using simple retail corporate bonds depository
interests;
- provide that
directors have liability for any misinformation in a disclosure document in
certain circumstances; and
- provide that the
use of the terms ‘financial planner’ and ‘financial adviser’ are restricted to
those with licences to provide advice on designated financial products.
Compatibility with human
rights
1.3
The bill is
accompanied by a brief, self-contained statement of compatibility which states
that the bill does not engage any human rights.
1.4
The committee,
however, notes that the bill may give rise to human rights concerns with regard
to the right to freedom of expression and the presumption of innocence.
Freedom
of expression
1.5
The bill will
restrict the use of the terms 'financial adviser' and 'financial planner' to
persons authorised to provide personal advice on designated financial products.[1]
The restrictions will also apply to terms of 'like import',[2]
and any other terms prescribed by regulation.[3]
Only persons who hold a relevant Australian financial services licence or
persons who provide personal advice on designated products on behalf of a
relevant licence-holder will be able to use the restricted terms.[4]
It will be an offence for a person to use a restricted term without meeting the
statutory criteria for its use.[5]
1.6
These provisions
engage the right to freedom of expression in article 19 of the International
Covenant on Civil and Political Rights (ICCPR). The right to freedom of
expression includes the 'freedom to seek, receive and impart information and
ideas of all kinds' and extends to commercial expression. The right to freedom
of expression, however, may be subject to permissible limitations, where those restrictions
are provided by law and are necessary for one (or more) of the purposes listed
in article 19(3) of the ICCPR.[6]
This essentially involves demonstrating that the limitation is (i) for one of
the legitimate purposes defined in article 19(3) and is reasonable, necessary
and proportionate to that purpose. The statement of compatibility does not
address these issues.
Presumption
of innocence
1.7
It is a criminal
offence under the Corporations Act 2001 for a person to make or
authorise false or misleading statements or information.[7]
However, a person will not be liable if they have taken reasonable steps to
determine whether any false or misleading information was being provided.[8]
1.8
The bill will
provide specific tests for determining when a person has taken reasonable steps
to ensure that a statement or information was not false or misleading. Broadly,
to satisfy these tests, a person must prove that:[9]
- they believed on
reasonable grounds that the statement or information was not misleading after
making all reasonable inquiries; or
- they relied on
information provided by another person that was reasonable in the
circumstances.
1.9
Requiring a
person to prove the existence (or non-existence) of particular facts to avoid
criminal liability would appear to involve requiring the person to discharge a
reverse legal burden. These provisions may therefore engage the right to be
presumed innocent in article 14(2) of the ICCPR.
1.10
Generally,
consistency with the presumption of innocence requires the prosecution to prove
each element of a criminal offence beyond reasonable doubt. An offence
provision which requires the defendant to carry an evidential or legal burden
of proof with regard to the existence of some fact will engage the presumption
of innocence because a defendant’s failure to discharge the burden of proof may
permit their conviction despite reasonable doubt as to their guilt. However,
reverse burden offences will not necessarily be inconsistent with the
presumption of innocence provided that they are within reasonable limits which
take into account the importance of the objective being sought and maintain the
defendant's right to a defence. In other words, the reverse burden must pursue
a legitimate aim and be reasonable, necessary and proportionate to that aim. The
statement of compatibility does not address these issues.
1.11
Before
forming a view on the human rights compatibility of the bill, the committee
intends to write to the Minister for Financial Services and Superannuation to
request further information as to:
- whether the
provisions in Schedule 2 of the bill are compatible with the right to freedom
of expression in article 19 of the ICCPR; and
- whether the
provisions in items 52 and 53 of the bill are compatible with the right to be
presumed innocent in article 14(2) of the ICCPR.
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