On 11 December 2019 the Federal Minister for Indigenous Affairs, the Hon Ken Wyatt, AM MP, announced a comprehensive review would be undertaken of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (CATSI Act). The review will be conducted by the recently formed National Indigenous Australians Agency (NIAA).
The scope of the review is yet to be finalised; however, it is expected to include a wide and comprehensive consideration of the effectiveness of the Act and a focus on opportunities for legislative improvements; particularly in the areas of governance, the reduction of red tape and an examination of the effectiveness of the CATSI Act as a special measure under the Racial Discrimination Act 1975 (Cth).
The review will be conducted in two phases with a target completion date of 30 November 2020. Through consultation, Phase 1 will identify and narrow the areas of the CATSI Act which should be considered as part of the review. Thereafter, Phase 2 of the review will look at any proposed amendments to the CATSI Act.
Outcomes of the review may result in changes to the way in which businesses interact with Aboriginal and Torres Strait Islander corporations.
About the CATSI Act
The CATSI Act commenced on 1 July 2007 and currently governs over 3000 indigenous organisations across Australia; including prescribed body corporates under the Native Title Act 1993 (Cth).
The CATSI Act provides indigenous organisations with a specialist regulatory framework for Aboriginal and Torres Strait Islander groups to form and manage corporations. The Act mirrors many of the provisions of the Corporations Act 2001 (Cth), but provides the flexibility and support needed to meet the unique needs of Aboriginal and Torres Strait Islander people.
Prior Review of the CATSI Act: 2016-2019
KPMG Review 2016
In 2016, the Department of the Prime Minister and Cabinet commissioned KPMG to conduct a review of the Office of the Registrar of Indigenous Corporations (ORIC) and the CATSI Act to “inform considerations of how the Registrar can most effectively support the capacity of Indigenous corporations to institute good governance and strong financial management, and intervene when necessary under the CATSI Act, and any amendments to the Act required to meet this objective”.
KPMG’s Final Report of its review noted that overall ORIC was “doing a good job, in a challenging regulatory environment and in the context of substantial decreases in funding and staffing” but noted there were significant opportunities to enhance ORIC’s contribution to better governance as a “more modern, intelligence-led, risk based regulator”.
The Final Report also noted opportunities to improve the CATSI Act, but did not recommend changing the fundamental approach of the Act. The review made 47 recommendations for improvement of the legislative and administrative framework.
ORIC Review 2017
In mid-2017, ORIC commissioned a technical review of the CATSI Act. The purpose of the review was to explore ways to strengthen and improve the CATSI Act and align it with recent changes in corporate law and regulation. A number of amendment recommendations were proposed, informed by the technical review of the Act.
Consultation on proposed amendments arising from the technical review occurred in 2018.
CATSI Amendment Bill 2018
The Corporations (Aboriginal and Torres Strait Islander) Amendment (Strengthening Governance and Transparency) Bill 2018 (Amendment Bill) was introduced into the Parliament in December 2018. The purpose of the Bill was to address minor technical deficiencies in the Act, reduce unnecessary regulatory burden for CATSI corporations, and maintain alignment with broader corporate law and regulation.
The Amendment Bill lapsed, however, due to the proroguing of the Parliament on 11 April 2019. Although the Amendment Bill was introduced into the Senate in December 2018, there was no debate and no passage of the Bill.
Focus of 2019/2020 Review
The extent to which the 2019/2020 review will pick up on the previous reviews and the Amendment Bill is unknown. The full scope of the review is yet to be determined, however the media announcement from Minister Wyatt suggests that the review will see a continuation of the focus upon governance, accountability, and the reduction of red tape for Indigenous organisations.
Uniquely, the 2019/2020 review will examine the effectiveness of the CATSI Act as a special measure under the Racial Discrimination Act 1975 (Cth).
Impact upon Non-CATSI Organisations
Businesses that work with CATSI corporations may be impacted by legislative amendments proposed to the CATSI Act following the comprehensive review. In particular, the manner in which businesses engage with, seek consent from, and enter into contractual arrangements with CATSI corporations may be affected by changes to governance and consultation requirements.
The NIAA Phase 1 consultation is now open for submissions through the website www.niaa.gov.au/catsi-act-review. Feedback is sought before 14 February 2020 in respect of those parts of the CATSI Act that should be considered part of the review. We would be more than happy to assist you with drafting any submissions on behalf of your business.