Page 781 - Week 03 - Tuesday, 21 March 2017
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One of the other major reforms made out of the Co-operatives National Law was to allow participating cooperatives who were previously called foreign cooperatives to carry on business outside their home state or territory without the need to register in each state and territory and pay a filing fee. The requirements to register in each state and territory represent unfair and expensive red tape and are a disincentive for cooperatives wishing to carry on business nationwide in an environment where cooperatives are competing with other incorporated entities such as corporations.
By passing this bill the automatic mutual recognition provisions in the Co-operatives National Law will apply in the ACT and cooperatives will be able to do business in the ACT without needing to register interstate anymore. Adoption of the Co-operatives National Law will align director duties and the duties of other officers with the duties contained in the Corporations Act 2001, including provisions in relation to the use of position and use of information in good faith. There are also provisions relevant to professionals who provide services to a cooperative; for example, auditors, receivers and liquidators.
The director liability for corporate fault under the Co-operatives National Law was revised according to COAG director liability reform. As a result, blanket liability revisions have been removed and directors face liability where there is a clear link between a director’s responsibility and action or inaction and the contravention. The bill will retain existing ACT mechanisms that are already used under the Cooperatives Act when it adopts the Co-operatives National Law, such as the registrar for cooperatives, the ACT Civil and Administrative Tribunal—or ACAT as we commonly know it—and the Supreme Court.
Applications can continue to be made to ACAT in relation to review of decisions. Among other functions, the Supreme Court is able to make decisions in relation to the rights and liabilities of cooperative members, the appointment of members and the control of property of a cooperative. This bill is a win for small cooperatives and cooperatives who wish to carry on business across borders.
Lastly, I table a revised explanatory statement. This has been revised in response to questions raised by the scrutiny of bills committee. The scrutiny committee sought my advice about the justification for the limitation on the privilege against self-incrimination in section 503 of the New South Wales Co-operatives (Adoption of National Law) Act 2012. The revised explanatory statement explains that the section provides a limited privilege against self-incrimination when making statements to inspectors exercising functions under the national law, compelling the production of documents and requiring answers to questions.
The privilege against self-incrimination is limited as it applies only if it is claimed in advance by the individual before answering any questions. The revised explanatory statement explains that the limitation is justifiable, given that it is necessary that inspectors have sufficient regulatory powers to obtain information about the operations of cooperatives to determine whether the law has been breached. These are standard powers in a regulatory context and they are reasonable in a sense that people participating in the operation of a cooperative are on notice about their obligations.
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