GREEN PAPER RESPONSE

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					           REGISTRAR OF ABORIGINAL CORPORATIONS
                        RESPONSE TO
      QUEENSLAND COMMUNUNITY GOVERNANCE GREEN PAPER

INTRODUCTION

As you may know the Registrar of Aboriginal Corporations (the Registrar) is a statutory
appointment with responsibility for administering the Aboriginal Councils and
Associations Act 1976 (the ACA Act). This Act aims to provide accessible and
appropriate incorporation for Indigenous corporations. There are currently just under
3000 corporations incorporated under the ACA Act, estimated to be half of all
Indigenous corporations in Australia. Many of these corporations are in Qld.

Recent work by the Office of the Registrar of Aboriginal Corporations (ORAC) has
highlighted the need for a new focus on capacity building in the ACA Act, and the
policies and practices of ORAC. Attachment A provides a more detailed overview of
the work of the Office, and an outline of services currently in place or being put into
place to support sustainable improvements to corporate governance.

As mentioned in Attachment A, a key project is modernising the ACA Act. An
independent review team made recommendations for significant changes to the ACA
Act. An executive summary of the review report and the full report are available at
www.orac.gov.au. Since the release of the report ORAC has undertaken more detailed
research and consultation, and has prepared a summary of key proposed reforms by
ORAC. Attachment B provides a summary of ORAC’s proposed changes. Please note
that the proposals are not endorsed by the Commonwealth Government, which is
considering its position in relation to the review of the ACA Act.

RELATIONSHIP BETWEEN ORAC AND RELEVANT QLD AGENCIES

Incorporation is a key pathway for Indigenous participation in the delivery of
Commonwealth, State and Local government programs. A significant number of ACA
Act corporations operate within DOGIT communities in Queensland, interacting on a
regular basis with Aboriginal Councils established under the Community Services
(Aboriginal) Act 1984. Many of the Indigenous governance issues experienced by
Aboriginal Councils are relevant to Indigenous corporations operating Australia-wide
under the ACA Act. We therefore welcome the opportunity to provide a response to the
Green Paper, and can offer experience relevant to it.

The Registrar works closely with key Commonwealth, State/Territory funding agencies
including the Australian Securities and Investments Commission (ASIC) and
Indigenous bodies such as the Indigenous Land Corporation, state Indigenous housing
authorities as they emerge and Aboriginal Hostels Ltd. Many of these partnerships are
supported by negotiated and evolving Memoranda of Understanding. Close working
relationships with key stakeholders enables ORAC to be more responsive to the
diversity in Indigenous affairs and to contribute to whole of government/agency
outcomes.

ORAC recognises the Queensland Government as a leader in dealing with issues
relevant to corporate and community governance. This office is interested in providing
maximum support to the reforms in Qld while also informing the reforms on important
matters. To date the Registrar and other staff have worked with DATSIP officers to

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facilitate this exchange, however it may be that in the near future this arrangement
should be formalised through an MOU.

RESPONSE TO KEY ISSUES IN GREEN PAPER

1. WHAT IS GOOD GOVERNANCE FOR INDIGENOUS COMMUNITIES

Good Governance Principles

ORAC acknowledges that improved governance is critical in supporting properly
functioning Indigenous communities that are effectively meeting the needs of their
constituents. We avoid use of the term ‘model’ since it often generates only structural
proposals. Structural interference in Indigenous corporate design by well intentioned
outsiders is part of the problem, and ORAC is trying to ensure that its reformed
legislation offers a more holistic approach to improving and supporting good
governance.

We agree that the principles for good governance outlined in the Green Paper are
essential for effective governance within Indigenous communities. As the Paper
suggests, the definition of governance often focuses on the Governing Committee. Good
governance extends to behaviours of all elements of a corporation and also its larger
environment including members, consumers/clients, creditors, auditors, funding
agencies and the regulator.

ORAC is in the process of developing a healthy corporation framework and indicators
which aims to reflect the many ingredients of governance. This Framework is in
principle consistent with that proposed in your paper and covers matters such as:

•   Design appropriate to the purposes and size of the corporation;
•   Management of expectations and perceptions by members and other key
    stakeholders of cultural fit;
•   Appropriateness and transparency of matters relevant to election, roles,
    responsibilities and remedies for breaches of elected and appointed officials;;
•   Management of expectations and perceptions, and compliance with principles
    relevant to, fair representation and decision making;
•   Effective processes for appropriate participation and consultation;
•   Responsiveness to diversity including gender issues;
•   Levels of engagement between corporations and key member/client groups and
    stakeholders;
•   Processes for dispute airing and resolution, which are used and successful;
•   Avoiding, managing and dealing with conflicts of interest, potential and real;
•   Internal evidenced based processes for assessing governance performance, which
    can be supported by funding agencies feedback, monitoring and assessment.

A key role for the regulator is to ensure its work remains consistent with supporting and
fostering the above qualities in a corporation. The proposed reforms to the ACA Act
seek to take into account these important principles.

Impact of Cultural issues and the need for flexibility

Our experience reinforces the argument in the Green Paper that properly addressing
cultural and diversity issues in the design of the corporations and its practices are key
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indicators of a successful corporation. For this reason ORAC is re-focusing its services
towards more design assistance. Also ORAC is proposing that the new Act clarify when
corporations law applies and when the special circumstances of Indigenous people need
to be considered.

Part of the approach of any culturally appropriate legislation must be to provide a
flexible environment to enable adaptation to cultural and situational issues by
corporations. ORAC does not propose that there be any attempt to codify cultural
practices, creating the flexibility for them to be recognised and supported is the aim.
ORAC is proposing in its work that corporations have considerable flexibility to design
their own governance arrangements subject to certain mandatory matters. These
mandatory matters might involve requiring rules to cover a certain matter such as
conflict resolution processes, and/or specify the minimum standard in certain matters,
such as requiring a process for Special General Meetings (SGMs) and perhaps the
number of members required for a quorum to ensure that the SGM can be held.

2. WHO SHOULD              MANAGE        THE      VARIOUS       SERVICES        IN    THE
   COMMUNITY?

We note the importance of issues in this area, i.e. how all the functions or services in the
community should be managed, deciding which functions should be managed by the
council, which functions by other organisations and what structures need to be put in
place for decision making purposes.

We also acknowledge the difficulty in developing practical solutions to fit the
circumstances of different Councils operating in different environments and
communities within Queensland. We note that the Green Paper outlines many
advantages and disadvantages for each of the models put forward.

We are of the view that all the options in the Green Paper could have some relevance to
managing the various services in Queensland’s Indigenous communities. Therefore
without necessarily promoting any of the specific options, we put forward the following
views that are relevant to the ACA Act and our operations.

We believe that whichever option is adopted for the delivery of services, there will
inevitably be a role for ACA Act corporations in the scheme of arrangements. Groups
within a community will always be looking at operating separate bodies for private
purposes or for the purpose of fulfilling specific community needs or needs relevant to
specific sub-groups within the community.

We note Option 1 involves transferring non-local government functions from councils
to regional or even State-wide service delivery bodies. We would like to draw to your
attention that this Option could be accommodated under the new ACA Act. It is
proposed that the new ACA Act will provide for umbrella/peak organisations whereby
its members could be other organisations/groups. It is an option you may wish to
consider.

We note Option 2 involves transferring non-local government functions from councils
to other incorporated community organisations. We would like to draw to your attention
that this could be accommodated under the existing provisions of the ACA Act, and the
proposed new ACA Act.


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Another possible approach that has not been canvassed in the Green Paper is the
adoption of a purchase/provider model to supply local government and non-local
government services within a community. For example, it might be more advantageous
in certain circumstances for Aboriginal Councils to purchase certain services from other
local government councils or private corporations on a competitive tendering basis.
This might lessen the burden on Aboriginal Councils. Again, private corporations
incorporated under the ACA Act with relevant expertise in a particular service delivery
area could tender for the service.

Where there is a need for incorporations outside a special statutory regime, a
modernised ACA Act may provide a useful regime depending on the purpose of the
corporation. Many of the problems identified in the Green Paper for Option 1 and 2
could be overcome by the proposed reforms to the ACA Act. Please refer to
Attachment B for further details of the proposed reforms.

I also draw these reforms to your attention from the perspective that they might be
relevant to policy research and direction for any new Councils legislation.
Consideration of the reforms proposed for the ACA Act might help with progressing
many of the issues outlined in the Green Paper. This office could provide a detailed
presentation on its research to date if this would be useful.


3. HOW SHOULD COUNCILS BE ELECTED?

Our experience reinforces the argument in the Green Paper that there needs to be
flexibility so that larger groups cannot dominate the council and also that minority
groups such as women can be elected to the councils. We have found there is greater
satisfaction among members of Indigenous corporations whose governance rules consist
of detailed and transparent election procedures. This approach appears to avoid
allegations of bias or manipulation by larger groups.

From our experience the choice of electoral schemes is important because it impacts on
the level of participation by members. As pointed out in the Green Paper, it needs to
take into account all the major social groups in the community as well as cultural factors
and cultural fit – one member one vote is not always the most appropriate arrangement
in some Indigenous corporations, differential voting rights is an accepted principle in
corporations law for some circumstances and an emerging principle in native title
corporations.

The ACA Act regime is very flexible in terms of election schemes. We have found that
a number of schemes have proved satisfactory for our incorporated corporations,
ranging from ward/regional systems, committee members being elected on a rotational
basis for more than one year, to negotiated (and not necessarily one vote one member)
representation by families, groups and clans. Some indigenous corporations have
successfully implemented a system whereby there must be equal gender representation
on the board. Others have election systems which prevent more than one family
member being elected to the board. Membership agreements are an emerging option to
avoid disputes regarding elections at meetings.

Overall, we are of the view that whatever changes are introduced in this area, flexibility
is essential. Proposed option(s) need to cater for different cultures and different


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community circumstances, and minimum standards are required to promote
accountability and good governance practices in this area.

4. HOW CAN GOVERNANCE PRACTICES BE IMPROVED?

The Green Paper outlines a number of proposed reforms aimed at improving
governance practices, i.e.:

   -   More powers of intervention in council affairs
   -   Corporate planning and reporting processes
   -   Public meetings
   -   A complaints mechanism
   -   Defined roles for councillors and employees
   -   To prohibit councillors from council employment
   -   The disqualification and removal of councillors
   -   Misbehaviour guidelines or codes
   -   Community-designed governance codes.

In general ORAC considers that these reforms will progress improvements in
governance practices. We are also of the view that the certain principles are paramount
to working out the detail on how these reforms should be introduced. These principles
are that:

   -   the planning and reporting requirements are relevant and used to improve
       governance;
   -   responsibilities and roles are clear, understood, and reasonable in the
       circumstances (particularly in areas relating to misbehaviour guidelines, and
       duties of councillors and employees);
   -    requirements for corporations to monitor and manage conflict of interest and
       confidentiality are clear;
   -   the reforms are supported by sustained resources, training and capacity
       development; and
   -   misbehaviour is speedily identified and firmly dealt with.

Our capacity development program involves a number of key strategies aimed at
building sustainable improvements to governance:

           Active support for members and corporations at all stages, especially in
           corporate design and training of members, officers and committee members.
           Improved and expanded tools to support corporations, such as a range of
           guides to constitutions which maximise cultural fit, internal conflict
           resolution and internal accountability to members.
           Effective training and problem solving with members and corporations.
           A more effective role in member and corporation disputes.
           Rewards for good governance such as accreditation, mentoring, streamlining
           of compliance and reporting processes.
           Facilitating whole of government and whole of agency action on key
           systemic issues.
           Working across the whole range of corporations, not just those that are
           ready and willing.
           Intervention only when necessary.


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            Early diagnosis of risks through case management of corporations, a rolling
            program of healthy governance examinations and annual certification of
            status on the public register for every corporation.

Some of ORAC’s planned capacity building work occurs in Qld, for instance ORAC is
delivering accredited training in Cape York in July 2003 to a number of individuals
connected to DOGIT communities and ACA Act corporations. An MOU might allow
higher level co-ordination of our activities with the activities of key Qld agencies.

5. WHO SHOULD ADMINISTER ABORIGINAL COUNCILS?

ORAC believes that sustainable governance requires the active involvement of the
regulator. As the regulator there is considerable law and best practice that applies, and it
is important that this is identified and met.

CONCLUSION

We thank the Queensland Government for providing us with the opportunity to
contribute to these important public policy issues. The issues arising from the Green
Paper are of mutual interest to us as well as all indigenous communities around
Australia. We look forward to working with you further on this project in the future.

If there are any issues that require clarification or you wish to discuss our response,
please contact Mr Joe Mastrolembo on 02 6121 4396. My office will be pleased to meet
with you at any time to advance these issues further.


Laura Beacroft
Registrar of Aboriginal Corporations
30 May 2003




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