Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth)

The Corporations (Aboriginal and Torres Strait Islander) Act (CATSI) received the assent of the Australian Parliament on 18 October 2006, and came into force on 1 July 2007.

The CATSI Act replaces the old Aboriginal Councils and Associations Act 1976 (Cth), and aims to:

• provide for the Registrar of Aboriginal and Torres Strait Islander Corporations;
• provide for the Registrar's functions and powers;
• provide for the incorporation, operation and regulation of appropriate bodies;
• provide for the incorporation, operation and regulation of bodies that are incorporated for the purpose of becoming a registered native title body corporate; and
• provide for the duties of officers of Aboriginal and Torres Strait Islander corporations and regulate those officers in the performance of those duties.
  
  As at June 2006, the Act regulated over 2500 Aboriginal Corporations around Australia.

In February 2001, an independent review commenced into the Aboriginal Corporations and Associations Act 1976. After two years of consultations, the review presented its final report in December 2002. The CATSI Act was developed as a response to this enquiry.

Transitional Arrangements

The Corporations (Aboriginal and Torres Strait Islander) Consequential, Transitional and Other Measures Act 2006 (Cth), sets out the arrangements for a two year transitional period during which all corporations must comply with the new legislation.

Many of the requirements of the new legislation will be implemented automatically by the registrar. These include ensuring the name adequately complies with the new legislation, automatic size classification and automatic transfer of the corporation's contact details. During this period corporations must follow their own procedures, alter their constitution to the extent that it is required under the new Act, and make the necessary internal management alterations to bring their internal governance into line with the requirements of the CATSI Act.

New Provisions relating to all corporations

The new Act provides that in order to register, Aboriginal corporations must:

• have at least five members;
• produce evidence that they are ready to incorporate, including that at least 75% of the group has agreed to incorporate, and agreed to the internal governance rules;
• have either the term Aboriginal Corporation, Torres Strait Islander Corporation, Indigenous Corporation, Aboriginal and Torres Strait Islander Corporation or Torres Strait and Aboriginal Corporation in its title; and if a registered native title body corporate, include the acronym RNTBC in its name.

The provisions relating to internal governance and membership have also changed, including:

• ATSI Corporations may now have non-indigenous membership, although the membership must always be majority indigenous;
• rights to see accounts and seek injunctions against oppressive behaviour; and
• the registrar has been granted the power to act for members in certain circumstances where the corporation has been acting unfairly towards them.

Reporting requirements have been altered, dividing corporations into small, medium and large. Small and medium corporations have less onerous reporting requirements than they did under the previous Act. RNTBCs will be classified as small, irrelevant of the native title rights and interests they hold.

Many of the provisions bring the new legislation into line with the Corporations Act 2001. These include the clarification of director's duties, including duties of care, skill and diligence, a duty of honesty, a duty to act for a proper purpose, duties of disclosure and avoidance of conflicts, as well as provisions relating to insolvent trading.

The Act also aims to avoid nepotism by preventing a corporation from giving benefits to directors or related parties, such as the spouse of a director, unless approved by the members. These alterations form part of a significant increase in the number of offences introduced as part of the new legislation, including prohibitions of misleading and deceptive conduct, as well as the introduction of criminal liability for serious breaches of statutory provisions.

The Office of the Registrar of Aboriginal and Torres Strait Islander Corporations

The new provisions make it possible for the Registrar to apply to remove a person from managing a corporation, prevent other parties from having access to sensitive personal information contained in the register, and establish a register of people who have been excluded from managing a corporation.

The Registrar also has significantly increased powers to inspect the books of a corporation, and those of a corporation's holding company, and seek a warrant should these not be provided. These powers significantly develop the current powers of the registrar to appoint an expert to examine the affairs of a corporation and carry out 'healthy organisation checks', as well as the powers of the registrar to appoint a special administrator. The Registrar also has power to investigate other matters, including any complaint against a corporation.

Provisions Relating to Registered Native Title Bodies Corporate

The CATSI Act has special provisions for registered native title bodies corporate. The priority of the legislation is to ensure that the responsibilities of these bodies under relevant native title legislation do not conflict with the requirements placed on corporations under the CATSI Act.

First, the Act establishes that a director, officer or employee of an RNTBC who is acting in good faith with the belief that the action is necessary to ensure that the corporation complies with native title legislation will not be seen as breaching their director's duties as outlined in the CATSI Act. The exception to this is the insolvent provisions.

Directors are also exempted from the requirement to disclose material personal interests if those interests are purely native title rights and interests, because these rights are shared in common with other native title holders.

For members, the CATSI Act limits the capacity for member's rights to be used to prevent a RNTBC from meeting its native title statutory obligations.

Tailored provisions prevent the registrar from deregistering RNTBC's and the courts from granting orders where an officer or employee is acting in good faith with the belief that the action is necessary to ensure that the corporation complies with its native title obligations.

Related Entries