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Mantziaris, Christos --- "Christos Mantziaris: Reply to Jim Fingleton" [1997] IndigLawB 89; (1997) 4(6) Indigenous Law Bulletin 16

Christos Mantziaris: Reply to Jim Fingleton

Dr Fingleton’s claims that I have ‘misrepresented’ and ‘grossly misunderstood’ the Report and ‘disparaged’ the ‘efforts of all those who contributed’ to it, amount to allegations that my criticism is in bad faith. This is disappointing. Dr Fingleton seems to have overlooked my positive appraisal of the Report’s findings regarding the Registrar’s Office, meeting procedures and the definition of membership. Moreover, my critique has always been limited to Volume 1 which ‘synthesised’ the case studies and papers (Vol. 2). In my view, the case studies and papers were excellent. Not so the ‘synthesis’. So I stand by the distinction I have drawn between the two volumes. As a critic, I have a responsibility to delimit accurately the scope of my critique.

Constraints of space do not permit a point–by–point rebuttal of Dr Fingleton’s claims regarding my article. My feeling is that it would also not advance this debate. I strongly support Dr Fingleton’s call for the Review’s public release; interested readers will then be able to draw their own conclusions. However, Dr Fingleton’s discussion of the corporate accountability model requires a short response.

It is plainly wrong for Dr Fingleton to assert that the ‘tiered system involves imposing categories ... on indigenous groups, regardless of their wishes’ (p 15, this issue). Readers may note my clear statement that Tier 1 and Tier 3 bodies would be able to draw up their own Rules of Association (pp 12, 13). The error in Dr Fingleton’s assertion is easily understood if one looks at an analogous structure within the Corporations Law, which also offers a tiered model of regulation. If one incorporates a ‘small proprietary company’—as opposed to a ‘large proprietary company’ or a ‘public company’—the company falls into a particular tier of regulation. This will determine its level of regulation; most importantly it will exempt the company from the heavier reporting and audit requirements imposed on the other two categories of company. But the company’s members will still determine the company’s governance structure by formulating and amending the Articles of Association and by using shareholder agreements. The incorporation statute thus takes a ‘permissive’ or ‘enabling’ stance towards the incorporators’ wishes. Contrary to Dr Fingleton’s assertion, tiered regulation does not by itself lead to ‘paternalistic control’ and ‘bureaucratic centralism’. If it did, small business would have long revolted against the state!

As Dr Fingleton notes, the Report recommends that ‘the weight of accountability should be shifted ... 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’ (p 14). I could not possibly disagree with this objective. But this type of statement, with which the Report (Vol. 1) abounds, does not explain how this objective might be achieved. For reasons indicated before (p 11), the simple recommendation of a ‘federal version’ of incorporated associations legislation is far too vague and, in any case, inappropriate. My discussion of a ‘tiered’ model[1] is merely an attempt to articulate an identifiable legal structure within which these same objectives may be fulfilled. It is disappointing that Dr Fingleton cannot see this.

Discussing the tiered model, I acknowledged the common points between the Report’s recommendations and my own suggestions.[2] But I moved on to a discussion of how concrete legal structures might accommodate the problems identified by the Review Team. This is where the debate should be, not at the level of general aspirational statements regarding the mixture of ‘custom’ and public accountability. I have not been met on this terrain by Dr Fingleton. Nor have I been met on my treatment of issues crucial to the design of these structures—issues such as the identification and codification of ‘custom’, the definition of membership, the possibility of corporate groups, corporate capacity and authority, the appropriateness of the fiduciary principle, the danger of ‘juridified’ social relationships, the protection of corporate minorities, the ideal level of reporting requirements and the structuring of the insolvency and administration regimes.

At the end of the day, the ACA Act is an incorporation statute. It is difficult to understand how the Report can recommend reforms to the ACA Act without engaging the basic corporate law doctrines, structures and assumptions that underpin the Act. Dr Fingleton suggests that these matters are simply my personal obsession. It would be interesting to see whether the ACA Act corporations and their legal advisers agree. My own contact with indigenous corporations indicates that these ‘technical corporate law concerns’ are of great practical significance. They require solutions which the Report (Vol. 1) cannot yield.

It is disappointing that my attempt to bring the corporate law perspective to the debate has provoked such a response. The indigenous corporation is here to stay. Whenever a group needs a legal personality of its own, a body corporate will be born and the age–old questions of corporate law will re–emerge. I ask readers to face this fact squarely, but to take heart. Corporate law is a highly malleable body of law. If one looks at the diversity of corporate structures and practices in the commercial world, one can only come to the conclusion that, under the right regulatory system, corporate law can go a long way to producing the tailor–made structures that self–determining incorporators require.

Writing my article, I was struck by the need for orthodox corporate law doctrines to respond and adapt to the unique cultural, economic and political needs of indigenous incorporators. It is imperative that this process of adaptation commence and it is my hope that it will eventually yield a discrete body of law—a cross–culturally sensitive corporations law for indigenous corporations.

[1] The tiered model was not presented as ‘an innovation’. Fingleton (p 15) cf Mantziaris (p 11 and note 63).

[2] Again, this appears to have been overlooked: Fingleton (p 14) cf Mantziaris (pp 12, 13, and note 78).

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