EXPLANATORY STATEMENT

 

 

Select Legislative Instrument 2007 No. 94

 

Issued by the authority of the Minister for Veterans’ Affairs

 

Naval Defence Act 1910

 

Navy (Canteens) Amendment Regulations 2007 (No. 1)

 

 

Subsection 45(1) of the Naval Defence Act 1910 (the Act) provides, in part, that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters which by the Act are required or permitted to be prescribed, or which are necessary or convenient to be prescribed, for securing the good government of the Navy, or for carrying out or giving effect to the Act, and in particular prescribing matters for or in relation to the good government of naval establishments.

 

The Navy (Canteens) Regulations 1954 (the Principal Regulations), made under the Act, provide for the establishment of canteen services on naval establishments.

 

The purpose of the Regulations is to eliminate any conflict between the Principal Regulations and the Commonwealth Authorities and Companies Act 1997 (CAC Act) and to align the Principal Regulations with the CAC Act so that they reflect modern governance.

 

In the “Review of the Corporate Governance of Statutory Authorities and Office Holders” by Mr John Uhrig (the Uhrig Report) there was, inter alia, a recommendation that there should be two templates which are designed to ensure good governance: one where governance can be provided best by executive management, and the other where it can be provided best by a board.

 

After an assessment of the Royal Australian Navy Central Canteens Fund (RANCCF) against the governance templates, the Government endorsed the recommendation in the Uhrig Report that the board template be applied to RANCCF and that the Principal Regulations be reviewed to ensure that they comply with the CAC Act and are in line with modern commercial practices. RANCCF is currently in the process of becoming an authority under the CAC Act and once this occurs, RANCCF will be subject to the CAC Act.

 

The Regulations repeal provisions in the Principal Regulations that are inconsistent with the CAC Act, ensure that the Royal Australian Navy Central Canteens Board complies with the CAC Act, set out how the Board is to be constituted and enable the Board to appoint a Chief Executive Officer. The amendments also modernise the language used in the Principal Regulations to insert non-sexist language.

 

Details of the Regulations are outlined in the Attachment.

 

 

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 

The Regulations commence on I July 2007.

The Department of Finance and the Royal Australian Navy Central Canteen Fund have been consulted in the making of this instrument.

 

 

 

0701972A

Attachment

 

 

 

Details of the Navy (Canteens) Amendment Regulations 2007 (No. 1).

 

Regulation [1] identifies these Regulations as the Navy (Canteens) Amendment Regulations 2007 (No. 1).

 

Regulation [2] provides that the regulations commence on 1 July 2007.

Regulation [3] provides that the amendments to the Navy (Canteens) Regulations 1954 (the Principal Regulations) are contained in Schedule 1.

 

Schedule 1

 

Item [1] amends regulation 4 by omitting subsections 4(4), (5) and (6) from the Principal Regulations. These provisions are no longer required as they relate to the investment of surplus fund money by the RANCCF which is also covered by the CAC Act. See item [2] below.

 

Item [2 inserts a note at the foot of subregulation 6(2) advising that the Board is a Commonwealth authority and it is subject to reporting, banking and investment obligations for Commonwealth authorities imposed by Part 3 of the Commonwealth Authorities and Companies Act 1997.

Item [3] amends regulation 7 by inserting a new subregulation 7(4) after subregulation 7(3), advising that the Board may terminate the appointment of a member of the Board for misbehaviour or physical or mental incapacity. It would also insert a new subregulation 7(5) requiring the Chief of Navy to terminate the appointment of a member of the Board if the member becomes bankrupt or takes action to obtain relief from insolvency or makes an arrangement to satisfy creditors, unauthorised absences or for failing unreasonably to comply with certain obligations imposed by sections 27F and 27J of the Commonwealth Authorities and Companies Act 1997. Section 27F deals with a director’s duty to disclose any material personal interest to other directors. Section 27J imposes restrictions on a director’s ability to vote and be present at directors meetings when the director has a material personal interest in a matter being considered at a directors meeting.

 

Item [4] substitutes new regulations for the current regulations 12 and 13.The new regulation 12 provides that after consultation with the Chief of Navy, the Board must appoint a Chief Executive Officer of the Canteen Service. The Board also determines the terms and conditions of the Chief Executive Officer’s appointment except for remuneration, which is to be determined by the Remuneration Tribunal or the Chief of Navy. While the Chief Executive Officer may be invited to attend meetings of the Board, he or she would be unable to vote on matters before the Board. It also inserts a note at the foot of the regulation referring to and summarising the effect of section 33 of the Acts Interpretation Act 1901.

 

The new regulation 13 provides that the Board may, by its instrument of delegation, delegate its powers under the Principal Regulations to the Chief Executive Officer, other than the power of delegation itself. It also provides that a delegated power exercised by the Chief Executive Officer would be taken to have been exercised by the Board. However, such a delegation would not prevent the Board exercising the same power. It also inserts a note at the foot of the regulation referring to and summarising the effect of section 33 of the Acts Interpretation Act 1901.

 

Item [5] substitutes a new heading of “Remuneration” for the existing heading in regulation 19. This reflects proposed amendment to the regulation to permit certain members of the Board to be remunerated.

 

Item [6] amends subregulation 19(1) by omitting the word and number “subregulation 2” and inserting the word and numbers “subregulations (2) and (3)”. A new subregulation (3) would be added by item [8]. This would remove the existing prohibition on remunerating any members of the Board other than by way of out-of-pocket expenses.

 

Item [7] amends paragraph 19(2) (b) by omitting the words” officer of the Australian Public Service” and substituting the letters and words “APS employee”. APS employee is the correct term under the Public Service Act 1999 for an officer of the Australian Public Service (other than an Agency head).

 

Item [8] amends regulation 19 by inserting a new subsection 19(3) after subregulation (2), to enable a member of the Board who is not a member of the Defence Force or an APS employee, to be remunerated. The prohibition on remunerating members of the Board is inconsistent with modern commercial practice and that of other CAC bodies. The amendment will at least give the Chief of Navy the option to appoint staff with commercial acumen and pay them for their work.

 

Item [9] makes the necessary amendments to the regulations to modernise the language of the Principal Regulations to insert non-sexist language.