Final Report of the CATSI Act Review – proposed changes for indigenous corporations
The National Indigenous Australians Agency (NIAA) has recently released the Final Report from its comprehensive review of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act).
The review considered a number of issues relevant to the governance of indigenous corporations, including:
The Final Report makes 72 recommendations based on broad stakeholder consultation. We have summarised the key recommendations for you below.
The Registrar of Indigenous Corporations has essentially the same role as the Australian Securities and Investments Commission (ASIC), but does not posses all of the regulatory powers of ASIC. Unfortunately, through the consultation process the NIAA heard of directors and executives who acted unconscionably in relation to the discharge of their duties. At the moment, the CATSI Act effectively offers an “all or nothing” regulatory approach, with criminal prosecution being the only remedy available for the Registrar in most circumstances, and no other ways to address situations where people in trusted positions do the wrong thing.
The Final Report makes recommendations to expand the Registrar’s powers to regulate indigenous corporations, including:
The Final Report considered the power that boards have in accepting or rejecting membership applications. The NIAA recommends amendments to the CATSI Act to:
At present, CATSI Act corporations are not required to record alternative contact details in their register of members, and are not permitted to use these details in determining whether a member is non-contactable when deciding to cancel their membership.
The NIAA recommends that corporations be required to collect phone numbers and email addresses of members where available.
The NIAA recommends that provisions in the CATSI Act about when membership can be cancelled based on non-contact become a replaceable rule.
To expand business opportunities for indigenous communities, NIAA recommended amendments to the CATSI Act to:
All CATSI Act corporations are required to have a constitution, commonly known as a rule book. Not all rules that apply to the corporation are in the rule book, such as the “replaceable rules” in the CATSI Act, which apply to corporations unless modified or replaced by a corporation in its rule book. The NIAA has recommend that the CATSI Act require all replaceable rules, whether replaced or not, to be included in rule books. This is to ensure that all members and directors are aware of a corporation’s internal governance rules.
Recommendations about the meeting process for corporations include:
As part of the review, stakeholders expressed concerns regarding the transparency of corporations’ operations and the receipt and management of native title benefits. In response, the NIAA made recommendations for:
Several changes are recommended to assist CATSI Act corporations facing financial difficulty. This includes recommendations that:
Chapter 7 of the Final Review is dedicated to Registered Native Title Bodies Corporates (RNTBCs) (commonly known as Prescribed Bodies Corporate). RNTBCs make up 6.8 percent of CATSI Act corporations, but more than 20 percent of complaints ORIC receives are in relation to RNTBCs, often relating to the management of native title benefits and membership.
The Final Report includes recommendations to deal with the Native Title Act role of RNTBCs, including that a model rule book is created for RNTBCs and that a separate division of the CATSI Act is created that is dedicated to those provision specific to RNTBCs.
The NIAA elected not to make a recommendation amending the Native Title (Prescribed Bodies Corporate) Regulations to include decisions about native title benefits in the definition of ‘native title decision’, because of the additional financial and administrative burden associated with holding consultation meetings with common law holders.
The NIAA has recommended further consultation around issues relevant to RNTBCs, including the viability of an economic vehicle status model and the creation of registered trusts.
A key focus of the review was the CATSI Act’s role as a special measure for the purposes of the Racial Discrimination Act, supporting and building the capacity of Aboriginal and Torres Strait Islander corporations. The NIAA heard criticism that the CATSI Act was paternalistic and that it provides insufficient flexibility for indigenous corporations.
The NIAA recommends that the CATSI Act be retained as a special measure. It was also recommended that the CATSI Act is amended to include a provision requiring the review of the CATSI Act every seven years.
NIAA’s recommendations were made to strengthen and streamline the CATSI Act, agreeing with feedback that greater decision-making power is critical to indigenous self-determination, which fittingly is also the historical basis of the CATSI Act.
The Australian Government is considering the Final Report with a view to bringing forward a Bill to amend the CATSI Act in due course.
More information is available on the NIAA’s website.
For more information or discussion, please contact our Native Title and Cultural Heritage team.