Labor Senators support the stated objective of the bill to ensure a tailored and effective regulatory framework for First Nations corporations under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act).
Labor Senators note that the majority of those who made submissions and gave evidence to this inquiry support at least some of the proposed amendments.
However, Labor Senators also note that several parts of the bill were the subject of strong opposition by First Nations corporations and their representative bodies.
In addition, Labor Senators note with concern the frustration of First Nations stakeholders with the quality of consultation on the bill, which they have argued fell short of the commitments made by the Government in the new National Agreement on Closing the Gap.
Shared decision-making with First Nations
As noted in the Committee Report, NACCHO described the Government’s consultation on the bill as ‘cursory at best’ and as a lost opportunity to demonstrate its commitment to shared decision-making with First Nations peoples under the first priority reform of the National Agreement.
Ms Francine McCarthy of the Central Land Council echoed these sentiments:
There are many ways that the C(ATSI) Act could be improved, and we see this bill as a missed opportunity. The CLC presented a number of constructive ideas to government during the comprehensive review of the C(ATSI) Act, none of which has been substantially taken up in the bill.
While the NIAA and the Registrar submitted that consultation was extensive and included several amendments that had been recommended in previous reviews over the years, NACCHO clarified:
We were not arguing for a longer process; we were arguing for a genuine process, and we were arguing for co-design and a seat at the decision-making table. Consultation is not just a box that you tick.
NACCHO also pointed out that consultation on the exposure draft bill took place for a month between 8 July and 9 August, at the height of recent COVID-19 outbreaks:
We were, and we still are, in the middle of a pandemic. We are on the front line of this fight. Our ACCHOs and their staff are exhausted and stretched to their limits, yet we managed to deploy resources to draft a submission and then we found that it, along with the 26 others, was reviewed in less than 14 days. That is what we mean by 'cursory'.
Labor Senators note that as a special measure under the Racial Discrimination Act 1975, the CATSI Act is intended to promote First Nations rights, particularly the right to self-determination. For this reason, the need for genuine engagement with First Nations stakeholders and their representative bodies is particularly important.
Recommendations not taken up
In this context, it is significant that several recommendations of the NIAA Review, which were supported by First Nations stakeholders, have not been taken up in this bill.
This includes the recommendation that a separate division of the CATSI Act be created which is dedicated to provisions specific to Registered Native Title Bodies Corporate (RNTBCs).
In its submission to the inquiry, the National Native Title Council (NNTC) explained the importance of this recommendation to assist RNTBCs manage their specific and additional obligations under the Act:
With the amendments currently proposed by the Bill there will be more than 40 sections or subsections in the CATSI Act that are specific to RNTBCs. Very few RNTBCs have the capacity to identify these provisions scattered throughout the 600 pages of the CATSI Act and fully comprehend how they interact with the NTA, the PBC Regulations and the general law, and the RNTBC responsibilities and obligations that flow from these laws.
The Kimberley Land Council supported the NNTC’s position, submitting:
[T]he CATSI Act does not presently sufficiently recognise the unique characteristics and circumstances of RNTBCs and, as such, cannot adequately regulate those entities…the KLC submits that separate regulation of RNTBCs is required. At a bare minimum, this separate regulation should be done through a stand-alone Part of the CATSI Act dealing with RNTBCs.
Labor Senators acknowledge the critical role of RNTBCs and consider that they should be properly supported to manage the specific regulatory burdens imposed on them under the CATSI Act.
Labor Senators welcome the commitment made by NIAA to consider the development of a standalone chapter for RNTBCs as part of a planned second tranche of changes to the CATSI Act.
A second proposal supported by First Nations stakeholders but not included in the bill is to amend the objectives of the CATSI Act to better reflect its beneficial role in building the capacity of corporations and accommodating First Nations tradition and circumstance.
NACCHO submitted that this recommendation ‘would help emphasise the ongoing need for close collaboration and coordination with peaks, so that struggling corporations can be assisted well before punitive measures are used.’
In their view, ‘[t]he Commonwealth needs to be seen to be committed to capacity building and in working collaboratively with our communities and their organisations.’
In response, the NIAA submitted that including capacity building in the objects of the Act was not necessary as the principle is already reflected in the parts of the Act that stipulate the functions, powers and aims of ORIC.
However, in the view of Labor Senators there is value in ensuring these principles are reflected in the Act as a whole, and not just in relation to the functions of the Registrar. Such a step would be consistent with the Act’s status as a special measure intended to operate for the benefit of First Nations peoples.
Concerns about specific amendments
As noted in the Committee Report, there was overall support for parts of the bill that submitters felt would enable greater flexibility for CATSI corporations.
However, stakeholders raised concerns that several amendments would increase the administrative burden on CATSI corporations or weaken the protective aspects of the Act.
This includes concerns about the suite of new regulatory powers granted to the Registrar under Part 2 of the bill, including the power to issue infringement notices in connection with minor contraventions of the Act.
The Central Land Council described the potential impact of the new framework on landholding corporations such as RNTBCs:
Many landholding corporations, including RNTBCs, hold substantial inalienable land assets but have no income, liquid assets or cash reserves. Most do not even have bank accounts. An infringement notice, even for a small sum, would be impossible for the corporation to pay. An unpaid notice then exposes the corporation to risks of administration or winding up, as well as requiring directors to consider issues of insolvent trading. The inalienable land assets held by these corporations would be put at risk.
Most directors of these corporations in central Australia receive no remuneration for their work, and live in deeply impoverished circumstances, often with little access to basic services. Infringement notices would punish them for participating in the work in managing land for the benefit of their traditional groups, in accordance with their traditions.
…If these corporations are exposed to infringement penalties for minor administrative errors, the cascade of consequences represent a real threat to the Aboriginal estate, and a real risk of hardship for voluntary directors.
Mr Jamie Lowe of the National Native Title Council, also reflected these concerns, although recognising that PBCs make up a relatively small proportion of all CATSI corporations:
I think any further kind of burden on prescribed body corporates as it sits at the moment, with the lack of funding and lack of capacity, is an issue.
While the Labor Senators support increased transparency and accountability of CATSI corporations in the interests of their members, they share the concern of these submitters about the potential impact of the Registrar’s proposed broad discretion to issue and withdraw infringement notices. As the Central Land Council submitted:
There is a risk that the issuing of infringement notices will, over time, become a routine practice that is carried out without any real regard being given to each corporation’s circumstances. Certain administrative steps such as the lodging of annual reports with ORIC could be the subject of automated infringement notices, which may appear appropriate to a future Registrar who does not pay sufficient regard to the circumstances of corporations on the ground.
Labor Senators support the Central Land Council’s recommendation to legislate a non-exhaustive list of considerations to guide the Registrar in exercising the discretion to issue or withdraw infringement notices.
As the CLC submitted, considerations could include the gravity of the contravention, the likely impact of issuing a notice on a corporation’s ability to continue to carry out its functions and whether the other interventions are more likely to promote compliance with the CASTSI Act.
Labor Senators note that when this suggestion was put to the Registrar at the inquiry’s public hearing, he expressed it would be acceptable to him.
Labor Senators also acknowledge the concerns that the new remuneration reporting requirement would impose a more onerous standard on CATSI corporations than for general corporations.
Labor Senators note that this change will bring the standards for CATSI corporations in line with remuneration reporting requirements for larger charities and welcome the changes made by the Government in response to stakeholder feedback that the remuneration reporting should not be made publicly available.
Labor Senators consider that this amendment should be carefully monitored and included as a priority for the next review of the Act.
A further concern raised in the inquiry related to amendments which would enable the registration of two-member CATSI corporations. Submitters and witnesses raised concerns that these changes could increase the risk of exploitation of First Nations corporations and people. The NSW Aboriginal Land Council submitted:
NSWALC also does not support Items 108 to 110 in the CATSI Amendment Bill, which support the establishment of a two-member corporation where only one member is an Aboriginal or Torres Strait Islander person as long as that person has the deciding vote. This change is not in accordance with the general principle of Aboriginal community control and could lead to the exploitation of Aboriginal people. For example, the formation of partnerships seeking to profit from organisations with an Aboriginal status.
NACCHO expressed similar concerns:
NACCHO does not support [two-member corporations]…as there is a real danger that this provision may be ‘rorted’. For example, there may be a serious unintended consequence in which partnerships are formed in which Aboriginal and Torres Strait Islander people are manipulated by other interested parties seeking to profit from organisations with an Aboriginal status (e.g. advantages in Government procurement exercises).
Labor Senators also note, however, that other stakeholders expressed support for the increased flexibility of corporate structures enabled by the bill, including the removal of impediments to establishing wholly-owned or joint venture subsidiary corporations.
In his evidence to the inquiry, the Registrar acknowledged that exploitation of First Nations corporations is an issue of concern and stated:
We have been looking at small corporations and, as part of our regulatory role as it exists, going to smaller corporations where there are member numbers at 10 or fewer. We have been having direct interaction with them case by case to determine Indigeneity and to make sure there is evidence of Indigeneity for individuals within those corporations so we then have some confidence that there are more Indigenous people who are members and directors of each one of those corporations. That would be the case in the future. Once the amendments come to fruition, we would undertake the same practice so we have a level of vetting to make sure that people are still compliant with what's happening.
Labor Senators urge the Government and the Registrar to maintain these vetting processes and consider other safeguards which could be put in place to protect against exploitation.
Concluding comments
Labor Senators support the broad objectives of the bill to improve the effectiveness of the CATSI Act and strengthen transparency of First Nations corporations for the benefit of their members.
Evidence received by this committee, however, raises legitimate concerns regarding the Government’s consultation process, non-implementation of certain reforms and the potential for some amendments to impose additional administrative burdens on First Nations corporations.
Labor Senators call on the Government to ensure the CATSI Act continues to promote First Nations’ economic advancement and self-determination, taking into account the unique circumstances and contribution of CATSI corporations.
Recommendation
The Government should improve the bill by adding an amendment to the objects of the CATSI Act to better reflect the intention to build capacity, promote modern governance and accommodate Aboriginal and Torres Strait Islander tradition and circumstance, consistent with Recommendation 1 of the Final Report of the CATSI Act Review.
Recommendation
The Government should amend the bill to include a non-exhaustive list of considerations guiding the Registrar’s discretion to issue or withdraw infringement notices. At a minimum, these considerations should include the gravity of the contravention, the likely impact of issuing a notice on an individual or corporation’s financial security, a corporation’s ability to continue to carry out its functions and whether the other interventions are more likely to promote compliance with the CATSI Act.
Senator Tim Ayres
Deputy Chair