Senate

Revised Explanatory Memorandum

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

1. Outline

Purpose

1.1. The Corporations (Aboriginal and Torres Strait Islander) Bill 2006 replaces the Aboriginal Councils and Associations Act 1976 (the ACA Act) to improve governance and capacity in the Indigenous corporate sector.

1.2. While the Bill aligns with modern corporate governance standards and corporations law, it maintains a special statute of incorporation for Aboriginal and Torres Strait Islander peoples that takes account of the special risks and requirements of the Indigenous corporate sector.

Background

1.3. 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.

1.4. In February 2001 the Registrar commissioned the most recent review of the ACA Act. The final report of the review was presented in December 2002.

1.5. 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.

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 The review also concluded that the ACA Act was out-of-date and suffered from a large number of technical shortcomings to the point that the ACA Act itself had become a source of disadvantage for Indigenous people.

1.7. 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.

Financial impact statement

1.8. There is no financial impact.