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Fingleton, Jim --- "Back of Beyond: the Review of the Aboriginal Councils and Associations Act 1976 in Perspective" [1997] IndigLawB 88; (1997) 4(6) Indigenous Law Bulletin 14

Back of Beyond: The Review of the Aboriginal Councils and Associations Act 1976 in Perspective

By Jim Fingleton

In February 1997, the Final Report–Review of the Aboriginal Councils and Associations Act 1976 (‘the Report’ and ‘the ACA Act’) was considered by the Aboriginal and Torres Strait Islander (‘ATSIC’) Board of Commissioners. The Minister for Aboriginal and Torres Strait Islander Affairs, Senator John Herron, also received copies of the Report. But it has received very little publicity since. If approached, ATSIC will send out the Executive Summary and Volume 1 (the main text), but Volume 2—containing thirty–two case study reports on indigenous organisations around Australia and six papers prepared on special issues—is effectively being suppressed. In these circumstances, Christos Mantziaris’ article, ‘Beyond the Aboriginal Councils and Associations Act?’ Part 1 and Part 2, is welcome publicity for the Report, since the ACA Act is of great practical importance for indigenous communities across the country.

The review was an enormous undertaking, not assisted by a change of government mid–way through to one with quite different approaches and understandings of the issues from the Labor Government which commissioned the review. Unfortunately, the Mantziaris article does little justice to the Report, the efforts of all those who contributed, and to the cause of essential law reform in this difficult area. While Mantziaris makes some useful points, and acknowledges the value of the Report, it is a pity that he has felt it necessary to disparage our efforts in doing so. In the limited space available, it is only possible to point out his more serious misunderstandings, and comment on the ‘tiered’ alternative system which he tentatively suggests.

I have three main objections to Mantziaris’ review of the Report. First, the distinction he makes between Volume 1 and Volume 2 is spurious; second, he is plainly wrong in his understanding of key parts of the Report; and third, he seems to think we should have preferred his priority areas of corporate law.

Mantziaris is at pains to differentiate between Volume 1 and Volume 2 of the Report. ‘The distinction is necessary’, he says, ‘due to the divergence between the views expressed in the Report and some of the views expressed by the case study rapporteurs in Volume 2’.[1] This attempt to divide the authors of Volume 1 (all of whom did case studies) from the authors of Volume 2 is fatuous: a divergence in views is inevitable between the members of a team of eleven consultants. The review was from start to finish a team effort; there is only one ‘Report’, and it consists of Volumes 1 and 2.[2]

Under the methodology used in conducting the review, the thirty–two case studies were central. Each of the eleven members of the review team wrote up their reports covering some 250 pages of Volume 2. They made their individual findings and recommendations which, together with the submissions received, consultations held, the workshop run under the review and the six special issues papers, were synthesised, leading up to the main findings and general recommendations for reform set out in Volume 1. The case studies were included in our final Report mainly to allow further analysis of our fieldwork data.

Second, in attacking the Report for its ‘inability to conceive of the indigenous corporation as anything more than an externally–imposed conduit for publicly funded service provision’ (p 8, this issue), he grossly misunderstands the Report, and therefore seriously undermines his article. Throughout the Report we make the point that it is the funding requirements of ATSIC and other government agencies—which apply only to some of the corporations—which have corrupted the relative simplicity of the ACAAct as it was originally designed. Thus, we argue for shifting the main weight of these requirements elsewhere—to the funding regime—as a way for freeing up the Act again.[3] In an overview of the Report (Vol. 1 Chapter 2), we deal specifically with groups wanting to incorporate not for the purposes of public funding, but rather for holding and managing native title in their land. Noting the many difficulties indigenous people would face in using the ACA Act in its present form for those purposes, we conclude:

‘The ACA Act was designed to enable indigenous groups to operate in accordance with custom. If the Act is so unsuitable for the purposes of groups holding title in their own traditional lands under custom—the ultimate indigenous group activity—then the ACA Act has strayed very far indeed from its original purpose’.[4]

Far from seeing the sole role of indigenous corporations as the management of public funds, we criticised that very feature of the way the ACA Act has evolved.[5] The Act, and how it is administered, has become preoccupied with accountability for the expenditure of public funds. Yes, we say that more emphasis should be placed on the service agreement—to concentrate on outcomes of funded programs rather than on compliance with the Act’s requirements, as at present. But nowhere do we say, as Mantziaris claims, that ‘contractual performance’ should take the place of ‘corporate governance’ (see pp 9, 10 in particular). Rather, we recommend that, in order for both aspects to be covered, the weight of accountability should be shifted from its present heavy reliance on the Act, to a sharing of the weight between the Act, the rules adopted by a body when it incorporates, and, where appropriate, any service agreement it enters into with a funding agency (for example ATSIC).[6]

In many other places Mantziaris misrepresents the Report. As a fair reading of the Report will show, we do not ‘deliver the indigenous corporation into the hands of the finance provider’ (p 9); we do not ‘assume that the “Aboriginal domain” ... is a non–contested site’ (p 9); we are not ‘critical of the Registrar’s ability to intervene on behalf of “aggrieved members” ’ (p 9); and we do not criticise the existence of Model Rules (p 11). The Registrar’s files, far from being ‘ignored’ (p 7), were examined in detail.

Mantziaris is on stronger ground in pointing out some corporate law issues that deserve further attention, although it is not true that all were ignored by the Report. Some (for example corporate fraud, tax exemptions) raise much larger issues, while others were regarded as follow–up matters. He also ignores, or gives inadequate attention to, large areas of the Report, in particular the treatment of accountability with its very timely findings on problems with the present system (Chapter 6), and the contentious subject of local and regional governance (Chapter 7).

His different priorities are very much technical corporate law concerns (as he admits), and for the Review to address them in his terms would have required a different team and a different methodology. Our team and our methodology were selected from eighteen tenders. We had a high–level Steering Committee (including Dr Lois O’Donoghue as Chair, Ms Patricia Turner (Executive Director of ATSIC), Professor Marcia Langton, Mr Michael Dodson (the Aboriginal and Torres Strait Islander Social Justice Commissioner), and a representative from the Federal Attorney–General’s Department, which supervised our conduct of the review and cleared our Report for submission to ATSIC and the Minister. At a late stage of the review, our main findings and tentative recommendations were discussed at a well–attended workshop in which the Steering Committee members participated. A key message from the workshop was that the Report should not be too ambitious with reform proposals, in the light of current political developments.

Our recommendations were, therefore, a compromise. Some of the review team wanted to go further in deregulating the incorporation regime for indigenous bodies—while at the same time improving the funding regime and advisory services. Some wanted a tiered system, very similar to that suggested by Mantziaris. In Volume 1 of the Report, the various options (including a three–tiered model) are outlined (pp 138–43). It is true that advocating a rewrite of the present Act, using State and Territory Associations Incorporation Acts as models, is not very ambitious. But it has the advantage of being safe, in a presently hostile political environment, and would be a big improvement on the present Act. It would have the benefit of applying nationwide, and, as an important modification of existing mainstream laws, it would allow groups to adopt custom as part of their constitutions. The Associations laws are only to be used as models, and the Report calls for further consultation to ensure that indigenous views are incorporated during the drafting of any replacement law.[7] Evidence of such consultations is conspicuously absent from the present Act.

The three–tiered model, which Mantziaris apparently presents as an innovation, was considered, but rejected by the review team. It is included in the Report as an option. The main difference between the reforms recommended in the Report and the alternative adopted by Mantziaris is that the tiered system involves imposing categories—and their corresponding regulatory regimes—on indigenous groups, regardless of their wishes. The tiered model would retain the paternalistic control and bureaucratic centralism evident under the current system, with the Registrar dictating the day–to–day operations of indigenous corporations.

My recollection is that the main proponent of the tiered system in the team saw its chief advantage as political: if the accountability requirements of bodies receiving public funds are set out in the legislation, it is more difficult to attack them. This is a valid consideration, but it must be weighed against the costs to the bodies—and their effective delivery of outcomes—of being forced into a statutory form of incorporation and regulatory regime which does not suit them. It is, in any case, mainly a difference of degree. Do you set out the options in the legislation and then require a group to pick one of them, or do you broaden the range of options so that the Act, a group’s rules and, where appropriate, service agreements, can be tailored to its particular functions? The Report felt that, to give the flexibility necessary for indigenous groups in contemporary Australia, the latter option was preferable.

Mantziaris makes a number of other comments in discussing the tiered model which reveal his lack of understanding of the Report. First, in respect of land–holding bodies (Tier 1), he says, ‘There is no need to mandate a system of corporate governance for these corporations, as their legal capacity would be very restricted’ (p 12). Had he really understood the Report, he would realise that this is the very point that we keep making (see note 3). To repeat, you don’t mandate a system of corporate governance and then apply it to all indigenous corporations, regardless of their functions. Instead, the Act should enable rules to be tailored to suit their different functions, and these rules should then be given statutory support.

In respect of service–providing bodies (Tier 2), he says, ‘The ACA Act could require the corporate governance structures for these bodies to be specified by the terms of the service agreements with the public financier’ (p 12). It is hard to believe that, again, Mantziaris does not realise that this is essentially what we recommend in the Report. Our proposal is preferable, however, in that we say the governance structures should be negotiated between the group concerned and the funding agency, and then incorporated in the group’s rules—which then take their legal force from the Act in the normal way.[8]

Mantziaris’ remarks on mixed–function bodies (Tier 3) reflect much that is already in the Report. He says that ‘corporations with a mixture of profit and non–profit functions would need to “show cause” as to why they should not incorporate under the Corporations Law’ (p 12). The Executive Summary to the Report says, ‘The Act’s coverage should be confined mainly to bodies of a non–commercial nature’ (p 11).

Mantziaris and I agree that reform of the ACA Act is urgently needed. But his misrepresentations of the Report demonstrate the urgent need for ATSIC to make the Report more widely available, in order that readers may make their own judgments and to enable informed constructive debate to occur. The ATSIC Board is still considering its response, including the options of abolishing the Act or even increasing the Registrar’s powers over indigenous corporations. Both those options were firmly rejected by the Review team. The Government, meanwhile, despite its early uproar over indigenous accountability, is acting as if the Report, with all its findings and recommendations on the subject, doesn’t exist.


[1] 1997 (4) 5 Indigenous Law Bulletin 10.

[2] Lest there be any doubt about this, it is spelt out at p 11 of Volume 1 of the Report.

[3] See in particular Vol. 1 at pp 13–18, para 6.60 on p 88, para 6.69 at pp 89–90 and paras 8.11 and 12 at p 141.

[4] Vol. 1 para 2.13 at p 15.

[5] See in particular Vol. 1 para 6.60 on p 88. See in particular Vol. 1 para 6.60 on p 88.

[6] See in particular Vol. 1 pp 16–18.

[7] Vol. 1 p 145.

[8] See in particular para 2.19 at p 17 of Vol. 1.


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