Senate

Revised Explanatory Memorandum

(Circulated by authority of the Honourable Mal Brough, MP Minister for Families, Community Services and Indigenous Affairs)

3. Notes on Clauses - Overview

The ACA Act

1.1. The ACA Act was envisaged as an incorporation statute to provide a simple and flexible means for incorporating associations of Indigenous people and was reserved for the use of Indigenous people. The ACA Act is currently administered by the Registrar of Aboriginal Corporations who is supported by departmental staff engaged under the Public Service Act 1999 (the Office of the Registrar of Aboriginal Corporations or ORAC).

1.2. Since it began, the ACA Act has become a significant vehicle for incorporating a broad range of Aboriginal and Torres Straight Islander corporations. Currently there are approximately 2800 Aboriginal and Torres Strait Islander corporations incorporated under the ACA Act. Many of these have been formed to hold land or deliver essential services, and 60 per cent are located in areas classified as remote or very remote according to Australian Bureau of Statistics (ABS) classifications.

1.3. The ACA Act was last amended in 1992. These amendments focused mainly on increasing external accountability. Since 1992 there have been several reviews of the ACA Act and two Bills proposing legislative reform which lapsed. There have also been significant external developments in that period. Most notably, the corporations law in Australia has been fundamentally changed through the introduction of the Corporations Act 2001 (Corporations Act). The ACA Act is now inconsistent with modern corporations law in Australia. This disadvantages Indigenous people using the ACA Act as a means of incorporating as the ACA Act corporate form has inadequate protection for members, rigidity of corporate design and insufficient third party protection which makes securing credit more difficult.

1.4. Another major development since 1992 has been the enactment of the Native Title Act 1993 (Native Title Act). Once a determination that native title exists has been made under the Native Title Act, the Federal Court must determine a prescribed body corporate to hold or manage the native title and fulfil the functions required by the Native Title Act and regulations. The Native Title (Prescribed Bodies Corporate) Regulations 1999 (PBC Regulations) require a prescribed body corporate to be incorporated under the ACA Act. As the ACA Act has been used as the compulsory incorporation regime for native title, the deficiencies that exist in the ACA Act also affects this important sector. The interaction between functions and duties conferred on corporations by the Native Title Act and the ACA Act is also unclear producing some uncertainty in the native title sector.

1.5. The substantial amount of public money that is provided to ACA Act corporations has also highlighted the Act's deficiencies in its accountability framework. For example, entities that are connected to ACA Act corporations such as trusts and other associations to some extent fall into a 'regulatory gap' where scrutiny by the Registrar, the Australian Securities and Investments Commission (ASIC) or state regulators is limited.

1.6. The ACA Act has also been criticised for the amount of red tape associated with regulating ACA Act corporations. For example, the reporting requirements for small corporations can be more onerous than if the same corporation were incorporated under the Corporations Act.

The review

1.7. In February 2001 the Registrar commissioned the most recent review of the ACA Act. The review was led by law firm Corrs Chambers Westgarth and the review team included specialists Senatore Brennan Rashid, Mick Dodson, Christos Mantziaris and Anthropos Consulting. The final report of the review was presented in December 2002.

Consultations

1.8. The review team conducted extensive consultations centring on two major rounds of consultations in April and May 2001 and in March and June 2002. A key workshop was held in Alice Springs on 3 and 4 May 2001. A second workshop was also held in Alice Springs on 9 and 10 April 2002. Questionnaires were developed and sent to all ACA Act corporations, as well as to 345 Indigenous organisations incorporated under other Commonwealth, state and territory legislation.

1.9. Advertisements were placed in Indigenous publications, including the Koori Mail, National Indigenous Times, Yamatji News and the Torres Strait News, noting the release of the consultation papers and calling for submissions and comments. Advertisements noting the review and the consultation papers were also run on the National Indigenous Radio Service (NIRS) network during March and April 2002. NIRS can broadcast to over 120 Indigenous radio stations Australia-wide. Details of the review and copies of the consultation papers and the questionnaires for Indigenous corporations were made available on the ORAC website. Information sheets on the review and a copy of a summary consultation paper were also distributed to all participants at the Indigenous Governance Conference held by Reconciliation Australia on 3 and 5 April 2002.

1.10. Consultation papers were sent to key stakeholders seeking submissions. Separate briefings were provided to members of six ATSIC Regional Councils. The ATSIC Board was briefed at its Board meeting in February 2002. Board members were updated on the progress of the review and were given advance copies of the consultation papers.

Recommendations

1.11. The major finding of the review was that the special incorporation needs of Indigenous people should be met through a statute of incorporation tailored to the specific incorporation needs of Indigenous people. The review recommended a thorough reform of the ACA Act by enactment of a new Act. The review recommended that the new act provide Indigenous people with key facilities of a modern incorporation statute such as the Corporations Act. The review also recommended that the new Act provide special forms of regulatory assistance to support contemporary standards of good corporate governance.

1.12. In making these recommendations the review observed that Indigenous people possess a range of socio-economic and cultural characteristics, which differ from those of other Australians, that may disadvantage them using statutes of general incorporation such as the Corporations Act or the state and territory associations incorporation legislation.

1.13. The review also concluded that the ACA Act was out-of-date and suffered from a large number of technical shortcomings to the point that the ACA Act itself had become a source of disadvantage for Indigenous people.

1.14. The review also noted that, in the context of racial discrimination law, the new Act would be a 'special measure'. The Act would therefore be a temporary form of 'positive discrimination' based on race aimed at enabling Indigenous people to enjoy, on an equal basis with other Australians, the same legal facilities (and attendant socio-economic benefits) that incorporation can confer.

Implementation

Implementation of key recommendations

1.15. The Bill implements the key recommendation by retaining a special incorporation statute to meet the needs of Indigenous people. The Bill introduces a strong but flexible legislative framework that maximises alignment with the Corporations Act where practicable, but provides sufficient flexibility for corporations to accommodate specific cultural practices and tailoring to reflect the particular needs and circumstances of individual groups. In acknowledgement of the fact that most corporations are located in remote or very remote areas, and may provide essential services or hold land, the Bill also offers safeguards through the Registrar's unique regulatory powers.

Implementation of specific reform proposals

1.16. The review made a number of specific reform recommendations which have been implemented as summarised below.

1.17. The review recommended enhancing the capacity of funding bodies and creditors to take a more proactive role in protecting their interests. This is implemented by aligning with the external administration provisions of Chapter 5 of the Corporations Act and through a number of transparency measures such as allowing observers and enabling consolidated reporting for groups of corporations.

1.18. The review recommended providing means for the Registrar to assist with the protection of members' rights, where members are unable to or lack the capacity to take action themselves. This is implemented by aligning with the members' remedies of Part 2F of the Corporations Act and allowing the Registrar to seek these remedies on behalf of members. The Bill also has numerous provisions which strengthen members' capacity to participate in managing the corporation, such as being able to request information about director remuneration and approving related party transactions. In many of these areas the Registrar can intervene to support members.

1.19. The review recommended ensuring that Indigenous people are able to design corporate structures and rules which best suit their specific needs, whether by reference to cultural practices or otherwise. This is implemented by allowing rules to implement, subject to some restrictions, structures and processes reflecting the traditions and circumstances of Indigenous people. The Bill also adopts a framework of 'replaceable rules' similar to the Corporations Act which allows corporations to readily adopt good governance procedures or tailor their internal governance framework to their particular circumstances.

1.20. The review recommended ensuring that reporting requirements match the size and activity level of the corporation. This is implemented by streaming corporations into small, medium and large for reporting purposes. Maximum flexibility is built into the reporting requirements to ensure that reporting can be tailored to the circumstances of particular corporations or classes of corporations.

1.21. The review recommended enhancing the standard of management of Indigenous corporations by applying directors' duties to senior management, and ensuring appropriate duties apply to both directors and senior management. This is implemented by aligning with the director, officer and employee duties in Part 2D.1 and the disqualification provisions of Part 2D.6 of the Corporations Act. The definition of 'officer' from the Corporations Act is also used so that managers who participate in decision making that affects a substantial part of the business of a corporation are also subject to these important duties.

1.22. The review recommended promoting the certainty of internal corporate processes and transactions with third parties (thereby enhancing the functionality of Indigenous corporations and removing commercial disincentives for dealing with them). This is implemented by adopting the provisions in Part 2B.2 of the Corporations Act which provide for the assumptions that people are entitled to make when dealing with corporations. A number of other provisions also ensure that transactions will not be void merely because particular procedural requirements have not been met.

1.23. The review recommended removing unnecessary technical barriers to the effective and efficient operation and regulation of Indigenous corporations. This is implemented by giving the Registrar maximum flexibility to exempt corporations from certain procedural requirements in the Bill, such as those relating to reporting or the conduct of meetings. The Bill also allows regulations to be made in a number of instances to tailor the operation of the Bill to particular corporations or classes of corporations.

1.24. The review recommended alignment with modern corporations law where equitable, appropriate and practical in the circumstances. This is implemented through significant alignment with the Corporations Act provisions related to directors' duties, external administration, the examination of the affairs of connected entities and on technical matters such as the jurisdiction of courts and offences.

1.25. The review recommended minimising incompatibility with requirements for corporations established pursuant to the Native Title Act. This is implemented by tailoring a number of provisions of the Bill to ensure that proper compliance with the Native Title Act does not contravene the Bill. Regulations can also deal with specific inconsistencies that may not have been foreseen. Decision making by the Registrar can also take into account the need for consistency with the Native Title Act. Native title matters are specifically discussed below.

Proposals not implemented

1.26. The review recommended providing a transitional mechanism for appropriate corporations to move to the Corporations Act and enter mainstream corporate practice. This will be implemented in a further bill to be brought forward, the Corporations (Aboriginal and Torres Strait Islander) Miscellaneous and Transitionals Bill.

1.27. The review recommended that membership of corporations be restricted to Indigenous people. This has partly been implemented by providing that a majority of members (and directors) must be Indigenous. This improves flexibility for corporations to permit non-Indigenous membership which is often important to ensure that services can be provided to non-Indigenous people or adopted children. As some corporations are the only providers of essential services in some communities it also ensures that non-Indigenous members of such communities are not disadvantaged.

1.28. The review recommended that corporate members should not be permitted. The Bill does permit corporate membership which improves the flexibility of corporate design to allow for resource agencies and peak bodies.

1.29. The review also recommended that particular regulatory powers under the current ACA Act should not be retained. For example, the review suggested that instead of the Registrar being able to appoint an administrator, the Registrar should apply to court for appointment of a receiver under the court's equitable jurisdiction. This recommendation has not been implemented but the appointment of an administrator by the Registrar (called a 'special administrator') has been improved to address a number of the reasons why the review considered that Registrar-appointed administrators were problematic. A key improvement is that a decision to appoint a special administrator is a reviewable decision.

Specific issues

Native title

1.30. A key aim of the Bill is to ensure that there is appropriate interaction between this Bill and native title legislation. The Bill removes the current uncertainty of how the Native Title Act and regulations are to interact with the ACA Act through tailored provisions for registered native title bodies corporate (RNTBCs) or in relation to an application made for the purposes of becoming an RNTBC where necessary.

1.31. Many of these provisions are intended to operate to ensure that a duty conferred upon a corporation or individual by native title legislation does not put the corporation or individual at risk of breaching provisions in the Bill. For example, where the Bill requires a director or officer of a corporation to meet statutory directors' duties that may place the individual in breach of the requirement to give effect to statutory requirements of the native title legislation, the Bill provides that the individual does not breach the Bill if they act in good faith with the belief that the action is necessary to ensure that the corporation complies with a native title legislation obligation.

1.32. The Bill defines 'native title legislation obligation' in a way that is consistent with the obligations prescribed by the PBC Regulations to consult with, act to give effect to the directions of, or obtain the consent of common law holders of native title.

1.33. The Bill also ensures that statutory members' rights provisions cannot be used to frustrate decisions of an RNTBC made in accordance with obligations under the native title legislation. This is achieved by clarifying that a court cannot grant orders on the grounds that the corporation is acting in a way that is oppressive to the members as a whole or oppressive to, or discriminatory against, a member or members if the action is done in good faith with the belief that it is necessary to ensure that the corporation complies with a native title legislation obligation.

1.34. The Bill also contains provisions designed to recognise the unique nature of native title rights and interests. For example, the Bill requires an RNTBC to use the term 'registered native title body corporate' or the abbreviation 'RNTBC' to signal to third parties that the corporation holds or manages native title rights and interests. In addition, it clarifies that native title rights and interests are to be disregarded when determining the value of the assets of an RNTBC for reporting purposes under the Bill.

1.35. Specific provisions for regulations to be made concerning RNTBCs ensures that future modifications to the Bill made by regulations do not conflict with native title legislation and that specific guidance can be given in regulations to cater for appropriate functions and duties of external administrators that may be appointed to an RNTBC.

Legislative matters

Commencement

1.36. The Bill has a commencement date of 1 July 2007. This date takes account of reporting provisions and record keeping requirements which are tied to the financial year. It also allows for an awareness raising campaign to be conducted with corporations and other stakeholders.

Reviewable decisions

1.37. In determining the discretionary decisions of the Registrar which are to be reviewable under the Bill and therefore subject to possible merits review by the Administrative Appeal Tribunal (AAT), regard has been given to the relevant principles established by the Administrative Review Council (ARC). These include the primary principle that an administrative decision that will, or is likely to, affect the interests of a person should normally be subject to merits review. Merits review by the AAT of decisions made by the Registrar is currently not available under the ACA Act. The 1989, 1996 and 2002 reviews of the ACA Act all supported making at least some of the Registrar's decisions reviewable by the AAT.

Delegation of functions

1.38. Delegation by the Registrar of his or her powers or functions under the Bill is limited to a Deputy Registrar, an SES employee in the Department or an APS employee within the Registrar's office who has the expertise appropriate to the function or power delegated. The power of a Deputy Registrar to sub-delegate is similarly limited to an SES employee in the Department or an APS employee within the Registrar's office who has the expertise appropriate to the function or power delegated. The Registrar may appoint one or more persons as Deputy Registrars who are to be persons engaged under the Public Service Act 1999. This power has not been similarly circumscribed to allow some flexibility in the administrative arrangements within the Registrar's office which is a small agency of approximately 30-40 staff. The Registrar would only appoint a person within ORAC as a Deputy Registrar who had the appropriate expertise.

Strict liability

1.39. The Bill contains a large number of strict liability offences. Many of these offences are based on equivalent offences in the Corporations Act which are also strict liability. Consistent with the objective of the reforms to align the Bill to modern corporations law, strict liability has been retained for these provisions to ensure that these offences in the Bill remain closely aligned with their counterpart offences in the Corporations Act. Consistency is also important to ensure that persons who may be subject to the regulatory requirements of both the Bill and the Corporations Act, for example auditors, are not subject to a criminal sanction under the Bill which is lesser or greater than if the same conduct had been committed with regard to the Corporations Act. In light of this, future amendments may be made to the Bill to align these criminal offences to any amendments made to the relevant criminal offences of the Corporations Act. Table 1 lists these proposed offences in the Bill, the offence in the Corporations Act upon which they are based, and its maximum penalty.

1.40. Table 1: Strict liability offences in the Bill based on Corporations Act offences

1.1. A relatively small number of strict liability offences are unique to the Bill. In determining that these provisions should be strict liability, regard has been given to similar provisions contained in the Corporations Act, as well as to provide consistency with similar provisions in the Bill.

1.2. Proposed subsection 115-15(4) provides that a corporation commits an offence if it does not comply with a direction by the Registrar under proposed subsection 115-15(1) to change its document access address. Contravention of this provision is a strict liability offence with a penalty of 5 penalty units. Broadly, the document access address will be the equivalent to a registered office for small and medium Indigenous corporations. Most of these corporations will be in very remote areas of Australia. The power of the Registrar to direct a corporation to move its document access address to an area specified in the direction is a very important regulatory tool to ensure that the officers of a corporation do not deprive their members from accessing the corporation's registers, documents etc. In light of this, a strict liability offence is justified here to ensure compliance. The provision can also be distinguished from section 143(1) of the Corporations Act in that, unlike that provision, the proposed section 115-15 requires a corporation to undertake a positive action, that is, find a new document access address in the area specified.

1.3. Proposed subsection 150-10(3) provides that a corporation must remove a member's name from the register of members within 14 days of receiving a notice of resignation. Contravention of this provision is a strict liability offence with a penalty of 5 penalty units. Difficulties with Indigenous corporations maintaining accurate registers have proven to be a significant problem in the past. In light of this, the strict liability offence, with a penalty of 5 penalty units, is justified here to provide a strong incentive for a corporation to maintain the accuracy of its register of members. In terms of this penalty, section 168(1) of the Corporations Act is the appropriate comparator as it relevantly requires a Corporations Act company to 'set up and maintain' a register of members.

1.4. Proposed subsection 150-25(4) provides that if a membership is cancelled on the basis that the person is not contactable, the directors must send the member a copy of the resolution at the last known address of the member, as soon as practicable after the resolution has been passed. Contravention of this provision is a strict liability offence with a penalty of 5 penalty units. There being no equivalent provision in the Corporations Act this provision is also drafted in the style of section 203D of the Corporations Act, which deals with the removal of directors by members of a public company. Strict liability is also justified here to provide a strong incentive for the directors to inform a member that their membership has been cancelled on this basis. This would also make the provision consistent with the procedural requirements of proposed section 150-20.

1.5. Proposed subsection 150-30(4) provides that if a membership is cancelled on the basis that the person is not an Aboriginal and Torres Strait Islander person, the directors must send the member a copy of the resolution as soon as practicable after the resolution has been passed. Contravention of this provision is a strict liability offence with a penalty of 5 penalty units. There being no equivalent provision in the Corporations Act this provision is also drafted in the style of section 203D of the Corporations Act, which deals with the removal of directors by members of a public company. Strict liability is also justified here to provide a strong incentive for the directors to inform a member that their membership has been cancelled on this basis. This would also make the provision consistent with the procedural requirements of proposed section 150-20.

1.6. Proposed section 180-30 provides that the corporation must make the register available for inspection by members at the AGM and ask each member attending the AGM to check the entry for that member in the register and inform the corporation of any corrections that need to be made to that entry. Contravention of this provision is a strict liability offence with a penalty of 10 penalty units. There is no equivalent provision in the Corporations Act to this provision, although it forms part of a group of provisions based on Chapter 2C of the Corporations Act (Registers). Strict liability is also justified here to provide a strong incentive for the corporation to use the AGM as an opportunity to update its register of members. Difficulties with corporations maintaining accurate registers have proven to be a significant problem in the past. Strict liability would also make the provision consistent with similar strict liability offences contained in proposed Part 4-5 of the Bill (for example proposed subsections 180-1(1), 180-10(1) and 180-20(1)).

1.7. Proposed subsection 180-35(1) provides that the registrar may at any time request the corporation to give him or her a copy of the register of members, and the corporation must comply with the request within 14 days or such other period as the Registrar specifies. A contravention of this provision is a strict liability offence with a penalty of 10 penalty units. There is no equivalent provision in the Corporations Act to this provision, although this provision was drafted in the style of a group of provisions based on Chapter 2C of the Corporations Act (Registers) which are also strict liability offences, see, in particular, section 178A of the Corporations Act which attaches strict liability to proprietary companies failing to notify changes to their register of members. Strict liability is also justified here to ensure that the Registrar is provided with an accurate register of members. As mentioned above, difficulties with corporations maintaining accurate registers have proven to be a significant problem in the past. Strict liability would also make this provision consistent with similar strict liability offences contained in proposed Part 4-5 of the Bill.

Regulatory powers

1.8. The Bill retains and modernises the Registrar's existing power to appoint a suitably qualified person to examine a corporation's affairs. Like the existing examination power it does not require grounds, therefore enabling 'healthy organisation checks' as a preventative measure. This power has been retained to allow early identification of problems and for problems to be solved by corporations themselves. The scope of the power includes the examination of issues broader than financial management to support dispute resolution and improved effectiveness. The Bill also modernises the Registrar's power to examine books and ask people questions in certain circumstances, including the power to seek a warrant from a magistrate when books asked for have not been produced. Warrants may be applied for in person or by telephone or other electronic means. These provisions reflect equivalent provisions in the ASIC Act and other modern regulatory schemes and provide greater procedural safeguards than currently exist under the ACA Act.

Legislative instruments

1.9. No exceptions have been sought from the operation of the Legislative Instruments Act 2003. Provisions in the Bill which contain determinations, specifications or approvals in writing by the Registrar that are not legislative instruments are noted within the Bill for the convenience of readers. However, provisions that are covered by an exemption in the Legislative Instruments Regulations 2004 (Legislative Instruments Regulations) are not considered to be legislative in nature and are therefore not noted in the Bill. For example, approvals under proposed section 404-10 would be covered by the exemption under item 3 of Part 1 of Schedule 1 to the Legislative Instruments Regulations, so they would not be legislative.

Regulation-making powers

1.10. The Bill contains a number of provisions which allow regulations to modify provisions of the Bill, or certain provisions of the Corporations Act which are otherwise applied to CATSI corporations, namely in the areas of the registration of transferring and amalgamated corporations, external administration, financial reporting, statutory Indigenous land trusts and registered native title bodies corporate.

1.11. Proposed section 42-40 of the Bill provides that regulations may modify proposed part 2-5 of the Bill, 'Effects of registration', for a CATSI corporation registered under proposed part 2-3 after applying under proposed section 22-1. The proposed section is based on section 601BS of the Corporations Act. Proposed part 2-5 of the Bill contains a single offence (proposed paragraph 42-25(3)(a)). This power is necessary to ensure that the application of these provisions is appropriate with respect to the special circumstances of bodies corporate that transfer their registration to the CATSI regime. Proposed subsection 42-40(2) expressly provides that these regulations must not increase, or have the effect of increasing, the maximum penalty or have the effect of widening the scope of any offence.

1.12. Proposed section 42-50 of the Bill provides that regulations may modify proposed Part 2-5 of the Bill, 'Effects of registration', for an amalgamated corporation registered under proposed part 2-3 after applying under proposed section 23-1. The proposed section is also based on section 601BS of the Corporations Act. Proposed part 2-5 of the Bill contains a single offence (proposed paragraph 42-25(3)(a)). This power is necessary to ensure that the application of these provisions is appropriate with respect to the special circumstances of amalgamated corporations. Proposed subsection 42-50(2) expressly provides that these regulations must not increase, or have the effect of increasing, the maximum penalty or have the effect of widening the scope of any offence.

1.13. Proposed paragraph 45-1(2)(b) of the Bill provides that the arrangements and reconstructions provisions of the Corporations Act apply to CATSI corporations with any modifications as set out in the regulations. These provisions include a number of offences. This power to modify these arrangements and reconstructions provisions is necessary to ensure that their application is appropriate with respect to the special circumstances of CATSI corporations. In light of this, any regulations are likely to limit the relevant applied offence provisions. However, proposed subsection 45-1(3) expressly provides that these regulations must not increase, or have the effect of increasing, the maximum penalty or have the effect of widening the scope of any applied offence.

1.14. Proposed subsection 339-75(2) of the Bill provides that the auditor independence provisions of the Corporations Act apply to CATSI corporations with any modifications as set out in the regulations. These provisions include a number of offences with a term of imprisonment. This power is necessary to modify the auditing requirements of the Corporations Act with respect to smaller corporations for which these onerous auditing requirements are not appropriate. In light of this, any regulations are likely to limit the relevant applied offence provisions. However, proposed subsection 339-75(3) expressly provides that these regulations must not increase, or have the effect of increasing, the maximum penalty or have the effect of widening the scope of any applied offence.

1.15. Proposed section 368-1 allows the regulations to modify the application of proposed parts 7-2 and 7-3 of the Bill (which deal with record keeping and reporting requirements) in relation to a specific corporation or in relation to all corporations of a specified kind. These parts contain a number of offences. Proposed section 368-1 is based on section 343 of the Corporations Act which allows the regulations under that Act to modify Chapter 2M of the Corporations Act which also deals with financial reports and audit. This chapter of the Corporations Act also contains a number of offence provisions. This provision is an important measure to ensure that maximum flexibility is built into the reporting requirements so that reporting can be tailored to the circumstances of particular corporations or classes of corporations.

1.16. Proposed paragraph 499-10(3)(b) provides that the provisions of the Corporations Act which apply to CATSI corporations under special administration apply with any such modifications as specified in the regulations. These provisions include a number of offences. This power to modify these provisions is necessary to ensure that their application is appropriate with respect to the special circumstances of CATSI corporations. In light of this, any regulations are likely to limit the relevant applied offence provisions. However, proposed subsection 499-10(4) expressly provides that these regulations must not increase, or have the effect of increasing, the maximum penalty or have the effect of widening the scope of any applied offence.

1.17. Proposed paragraph 516-1(2)(b) provides that the receiver provisions of the Corporations Act apply to CATSI corporations with any such modifications as specified in the regulations. These provisions include a number of offences. This power to modify these receiver provisions is necessary to ensure that their application is appropriate with respect to the special circumstances of CATSI corporations. In light of this, any regulations are likely to limit the relevant applied offence provisions. However, proposed subsection 516-1(2A) expressly provides that these regulations must not increase, or have the effect of increasing, the maximum penalty or have the effect of widening the scope of any applied offence.

1.18. Proposed paragraph 521-1(2)(b) provides that the administration provisions of the Corporations Act apply to CATSI corporations with any such modifications as specified in the regulations. These provisions include a number of offences punishable by terms of imprisonment. This power to modify these external administration provisions is necessary to ensure that their application is appropriate with respect to the special circumstances of CATSI corporations. In light of this, any regulations are likely to limit the relevant applied offence provisions. However, proposed subsection 521-1(3) expressly provides that these regulations must not increase, or have the effect of increasing, the maximum penalty or have the effect of widening the scope of any applied offence.

1.19. Proposed paragraph 526-35(2)(b) provides that the winding up provisions of the Corporations Act apply to CATSI corporations with any such modifications as specified in the regulations. These provisions include a number of offences. This power to modify these winding up provisions is necessary to ensure that their application is appropriate with respect to the special circumstances of CATSI corporations. In light of this, any regulations are likely to limit the relevant applied offence provisions. However, proposed subsection 526-35(2A) expressly provides that these regulations must not increase, or have the effect of increasing, the maximum penalty or have the effect of widening the scope of any applied offence.

1.20. Proposed subsection 546-45(1) provides that the regulations may modify the provisions dealing with the deregistration of a CATSI corporation if it holds land for the benefit of Aboriginal persons or Torres Strait Islanders under certain laws, including the Aboriginal Land Act 1991 (Qld). This regulation-making power will allow the prescribing of the process to be followed if winding-up proceedings are initiated for a CATSI corporation holding land in trust granted under the Aboriginal Land Act 1991 (Qld). The regulation making power is also broad enough to cover other state and territory land rights schemes if necessary in the future, for example, the Torres Strait Islander Land Act 1991 (Qld). Proposed subsection 546-45(2) will provide that any regulations made to modify these provisions must not increase the maximum penalty for any offence or widen the scope of any offence.

1.21. Proposed subsection 633-1(2) provides that any regulations made under the Bill cannot make provision for penalties exceeding 50 penalty units for contraventions of the regulations. This would include proposed subsection 339-80(3)(b).

1.22. As discussed above, proposed subsection 633-5(1) provides that the regulations may modify any of the provisions of this Bill (except proposed subsection 633-5(8)) as they relate to an RNTBC. The purpose of this regulation-making power is to address any potential conflicts between the obligations imposed by the Bill and the native title legislation with respect to RNTBCs (which will also be corporations registered under the Bill). The regulations, among other things, will be used to relieve corporations and other persons from liabilities that may arise from the conflict of these two legislative schemes. Proposed subsection 633-5(8) will provide that any such regulations must not increase, or have the effect of increasing, the maximum penalty or have the effect of widening the scope, of any offence.

Reversal of onus of proof

1.23. The following proposed subsections provide defences that impose an evidential burden of proof on the defendant: 175-10(2), 183-1(2), 265-25(2), 268-20(2), 279-1(3), 279-1(4), 304-5(7), 339-55(6), 339-65(4), 339-70(5), 376-35(3), 447-5(3), 453-5(7), 456-10(10), 456-10(12), 461-1(2), 496-10(2) and 546-20(6). These provisions mirror equivalent provisions in the Corporations Act and the ASIC Act, which also reverse the onus of proof, or are based on other legislative provisions which also reverse the onus or proof. For example, proposed subsection 453-5(7) is based on subsection 54AA(9) of the Veterans' Entitlements Act 1986 which also imposes an evidential burden of proof on the defendant. These provisions may be recast or removed in the future if any changes are made to equivalent provisions of the Corporations Act, the ASIC Act or other relevant legislation.