Senator Nick Sherry, Minister for Superannuation and Corporate Law, has today negotiated an agreement between the Commonwealth and States and Territories at the Ministerial Council for Corporations to address concerns over the use and management of companies by organised criminal groups (OCGs).
In addition, the Commonwealth has announced that as part of the forthcoming National Consumer Credit Protection regime, the Australian Securities and Investments Commission (ASIC), the new national credit regulator, will be specifically tasked with preventing members of OCGs from receiving an Australian Credit Licence.
"The Commonwealth shares the community's strong concerns over the use and management of companies by organised criminal groups. That's why we've announced that under forthcoming national credit laws, serious criminals, including organised criminal groups, will be shut out completely."
"The Rudd Government took the initiative of putting this issue back on the Ministerial Council agenda and I am happy that the States and Territories have signed up to our proposed way forward."
"Today's decisions, building on the work of South Australia and the Commonwealth over the last year, are very welcome," said Minister Sherry.
The current law automatically disqualifies from company management persons convicted of certain offences related to dishonesty that attract penalties of at least three months imprisonment. In early 2008, Commonwealth officials developed a range of detailed options for possible action, although by agreement the status quo was maintained.
"Today we have put forward several important reform options ranging from extending automatic disqualifications to establishing a national register of prohibited persons," said Minister Sherry.
The five options put forward by the Commonwealth are: (i) retaining the status quo; (ii) introducing a fit and proper person ground of disqualification; (iii) extending the scope of automatic disqualification to include specified categories of offences; (iv) extending the scope of automatic disqualification to include all serious offences; (v) creating a national register of disqualified persons.
"Today's agreement requires the States to report back to the Commonwealth with their preferred reform options within one month. Also, if they support extending the scope of automatic disqualification to new offences, I've asked them to set out the offences they want included."
"Once the States report back to me, I will reconvene Ministers and we will move quickly forward on a solution," said Minister Sherry.
The National Consumer Credit Protection Bill will be released for public exposure at the end of April. The full Ministerial Council Resolution is attached below.
Attachment A
Ministerial Council for Corporations Resolution
The Ministerial Council:
- agrees that organised crime is a national issue requiring a nationally coordinated response by all jurisdictions and notes the decisions of the Standing Committee of Attorneys General on this issue;
- notes that the issue of director disqualification under the corporations legislation in relation to organised criminal groups has previously been raised at the Ministerial Council by South Australia and that the Commonwealth presented options to the Ministerial Council in March 2008, including:
- retaining the status quo;
- introducing a fit and proper person ground of disqualification;
- extending the scope of automatic disqualification to include specified categories of offences;
- extending the scope of automatic disqualification to include all serious offences; and
- creating a national register of disqualified persons;
- notes the decision of the Council in March 2008 to retain the status quo and for the issue to remain under review, and notes the decision of the Commonwealth to list the issue of director disqualification under the corporations legislation in relation to organised criminal groups for immediate reconsideration in light of recent events;
- notes a subsequent proposal of New South Wales that the grounds for automatic disqualification in section 206B of the Corporations Act 2001 be expanded to cover convictions under certain New South Wales provisions regarding criminal organisations and criminal groups;
- requests other Council members to write to the Commonwealth by 15 May 2009 with any revised positions on the options as presented in March 2008, including option (iii) in Resolution B as supported by New South Wales;
- requests, where other Council members are supportive of option (iii) in Resolution B that they write to the Commonwealth by 15 May 2009, outlining the specified categories of offences from each jurisdiction that may be considered for inclusion;
- notes the Commonwealth's report to the Council that it has requested the Australian Securities and Investments Commission, as part of the forthcoming national consumer credit licensing regime, to prevent organised criminal groups from holding an Australian Credit Licence; and
- notes that once the Commonwealth has received the details requested of Council members, that the Commonwealth will reconvene Ministers at the earliest possible opportunity to progress agreed law reform options.