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2013-2014-2015
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
AUSTRALIAN RIVER CO. LIMITED BILL 2015
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Finance,
Senator the Hon Mathias Cormann)
TABLE OF CONTENTS
Table of abbreviations and common terms ................................................................... ii
General outline...............................................................................................................1
Financial Impact Statement............................................................................................1
Statement of compatibility with human rights...............................................................1
Consultation ...................................................................................................................2
Structure of the Bill........................................................................................................2
NOTES ON CLAUSES .................................................................................................3
Chapter 1--Introduction ................................................................................................3
Part 1-1--Introduction ...................................................................................................3
Division 1--Preliminary ........................................................................................3
NOTES ON SCHEDULE 1 ...........................................................................................4
Part 1--Preliminary .......................................................................................................4
Part 2--Assets and liabilities of ARCo..........................................................................4
Part 3--Transfer of other matters relating to ARCo......................................................5
Part 5--Other matters ....................................................................................................6
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Table of abbreviations and common terms
Abbreviation or Full term or description
common term
Acts Interpretation Act Acts Interpretation Act 1901
ARCo Australian River Co. Limited (ACN 008 654 206)
Commonwealth entity An entity as defined in section 10 of the PGPA Act
Corporations Act Corporations Act 2001
Finance Minister The Minister with responsibility for administering the
PGPA Act
LI Act Legislative Instruments Act 2003
OPC Office of Parliamentary Counsel
PGPA Act Public Governance, Performance and Accountability Act
2013
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Australian River Co. Limited Bill 2015
General outline
1. The Australian River Co. Limited Bill 2015 (the Bill) would, if enacted:
provide for the transfer of any assets and outstanding liabilities of Australian
River Co. Limited (ARCo) to the Commonwealth in preparation for its voluntary
deregistration under the Corporations Act 2001 (Corporations Act);
provide for the Commonwealth to become ARCo's successor at law in relation to
any contracts or other instruments, including its insurance policies; and
otherwise ensure that any ongoing issues relating to ARCo can be properly and
effectively managed by the Commonwealth as they arise.
2. ARCo is a wholly owned Commonwealth company that manages the residual assets
and liabilities of the former Australian National Line (ANL) following the sale of the
business of that company a number of years ago.
3. Following the sale of its last vessel in 2012, ARCo's sole function is now the
administration of its remaining liabilities, which principally relate to workers compensation.
4. ARCo has in place fully paid up insurance arrangements to cover these claims,
primarily through London-based Protection & Indemnity (P&I) Clubs and Australian
Prudential Regulation Authority authorised Australian-based insurers.
5. As part of the measures relating to the Smaller Government Reform Agenda introduced
in the 2014-15 Budget, the Government announced the wind-up of ARCo by 1 July 2015.
The Government's Smaller Government measures involve the abolition or merger of
Government bodies where possible, to eliminate duplication, remove waste, streamline
Government services and reduce the cost of government administration for taxpayers.
6. This Bill contains arrangements for the orderly transfer of ARCo's assets and liabilities
to the Commonwealth. Once ARCo has no remaining assets and liabilities it may be
voluntarily deregistered under the Corporations Act.
Financial Impact Statement
7. This reform will achieve efficiencies through the transfer of ARCo's residual functions
into the Department of Finance (the Department), which will reduce the number of
government bodies and simplify the management of Commonwealth liabilities. While the Bill
is expected to achieve savings to government, the financial impact on both the
Commonwealth and the community is low.
Statement of compatibility with human rights
8. The Bill, if enacted, will not affect any of the applicable rights or freedoms outlined in
the Human Rights (Parliamentary Scrutiny) Act 2011, such as those in the International
Covenant on Civil and Political Rights.
9. The Bill does not propose any offences or penalties that limit any human rights.
10. The Bill is therefore compatible with the human rights and freedoms recognised or
declared in the international instruments listed in subsection 3(1) of the Human Rights
(Parliamentary Scrutiny) Act 2011.
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Consultation
11. The Department of Employment, Comcare and the Attorney-General's Department
were consulted in the preparation of this Bill.
Structure of the Bill
12. The structure of the Bill involves:
a clause that provides for the short title of the legislation;
a commencement clause, providing for the commencement of the Bill, including
Schedule 1;
a clause that refers to the Schedule containing the substantive new provisions; and
Schedule 1 to the Bill.
13. An explanation of the provisions proposed in Schedule 1 is provided in sequential order
in this Explanatory Memorandum.
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NOTES ON CLAUSES
Chapter 1--Introduction
Part 1-1--Introduction
Division 1--Preliminary
Clause 1: Short title
14. Under this clause, if the Bill is enacted, it may be cited as the Australian River Co.
Limited Act 2015.
Clause 2: Commencement
15. Under this clause, if the Bill is enacted:
Clauses 1 to 4 will commence on the day that the Bill receives Royal Assent.
Items in Schedule 1 will:
o come into effect on a day to be fixed by Proclamation; or
o if no commencement date has been fixed within the period of 12 months from
the day the Act receives Royal Assent, be repealed;
16. The commencement of Schedule 1 is dependent on other factors relating to the
Commonwealth's commitment to effecting the deregistration of ARCo and, in particular, the
satisfactory completion of the Commonwealth's due diligence into the assets and liabilities of
ARCo. The date of commencement will only be fixed by Proclamation once the
Commonwealth has resolved any issues identified during this process.
17. If, after 12 months have passed since Royal Assent, the Commonwealth has not been
able to resolve any outstanding matters relating to ARCo's assets and liabilities, the
provisions of the Schedule will be repealed and ARCo will remain in existence.
18. While the usual length of time for sunsetting of provisions is 6 months, a longer period
has been provided for to recognise the possibility that any issues identified may be complex
to manage and resolve, in particular because the liabilities of ARCo deal with facts and
circumstances that have occurred over many decades. Twelve months is considered
appropriate to ensure that there is sufficient time to address any issues that may arise.
Clause 3: Schedule(s)
19. This clause provides that the items set out in Schedule 1 to the Bill will have effect
accordingly.
Clause 4: Extended geographic application
20. This clause provides that the Bill applies both within and outside Australia. This
provision recognises that ARCo had arrangements, including insurance arrangements, with
entities outside Australia and it is necessary for the provisions of the Bill to apply to affect
those arrangements (including by substituting the Commonwealth as a party to those
arrangements).
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NOTES ON SCHEDULE 1
Part 1--Preliminary
Item 1 defines several terms used throughout the Bill that are relevant to the interpretation of
its provisions.
In particular, `assets' and `liabilities' are defined broadly to ensure that all assets and
liabilities, actual, contingent or prospective of ARCo are covered. Claims may arise in the
future which relate to past liabilities of ARCo (for example, in relation to workers
compensation) and the intention of this Bill is to ensure that the Commonwealth assumes
responsibility for these liabilities as they arise.
`Land' is also defined broadly to mean any legal or equitable estate or interest in real
property, whether actual, contingent or prospective.
The definition of `instrument', which is not intended to be an exhaustive definition, includes
a contract, deed, undertaking, arrangement, agreement, notice, authority, order, instruction
and an instrument made under an Act or instrument.
`Transfer time', which is when the assets and liabilities of ARCo will be transferred to the
Commonwealth (see item 2(2)), is defined to mean the commencement of this Schedule,
which will be a date to be fixed by Proclamation. The intention is that the assets and
liabilities of ARCo will be transferred to the Commonwealth so that ARCo may then be
voluntarily deregistered under the Corporations Act.
Part 2--Assets and liabilities of ARCo
Part 2 (items 2-4) provides for the transfer of the assets and liabilities of ARCo by statutory
novation.
Item 2 deals with the transfer of ARCo's assets and liabilities at the transfer time (that is, the
date these provisions commence). This is intended to ensure that ARCo can be deregistered
under s 601AA of the Corporations Act as the voluntary deregistration process requires that
the company have limited assets and no liabilities before it can occur.
Subitem (2) provides that at the transfer time, any remaining assets and liabilities of ARCo
cease to belong to ARCo and become assets and liabilities of the Commonwealth. This
occurs without any conveyance, transfer or assignment at law. The Commonwealth becomes
the successor in law in relation to the assets and liabilities. This will give the Commonwealth
responsibility for any claims that occur in the future, as well as the management of ARCo's
entitlements under existing insurance arrangements.
Item 3 provides a process for registration of the vesting of any land (including any interest in
land) that transfers to the Commonwealth under item 2, if any such land exists. This item
allows the Finance Minister to make a certificate in relation to the transfer of land ownership
from ARCo to the Commonwealth, and for relevant land registration officials to give effect to
the certificate (including by making adjustments to property registers, as relevant).
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To avoid doubt, subitem (3) states that a certificate made by the Finance Minister under this
item is not a legislative instrument. This provision is included to assist readers, as the
instrument is not a legislative instrument within the meaning of section 5 of the Legislative
Instruments Act 2003.
Item 4 provides a process for registration of the vesting of an asset other than land, in the
event that any such asset (the vesting of which is suitable for registration) transfers to the
Commonwealth under item 2. The Finance Minister may make a certificate and lodge it with
an assets official which can operate as if it were the proper and appropriate instrument that
would ordinarily be lodged for transactions in relation to assets of that kind. The assets
official may then give effect to that certificate, including by making adjustments in an asset
register if necessary. This provision is intended to minimise the administrative processes
required to give effect to the statutory transfer of assets to the greatest extent possible.
To avoid doubt, subitem (3) states that a certificate made by the Finance Minister under this
item is not a legislative instrument. This provision is included to assist readers, as the
instrument is not a legislative instrument within the meaning of section 5 of the Legislative
Instruments Act 2003.
Part 3--Transfer of other matters relating to ARCo
Part 3 (items 5-8) provides for the transfer of other matters, other than assets and liabilities,
relating to ARCo.
Item 5 provides that, before or after the transfer time, the Finance Minister may determine
that a thing done by or in relation to ARCo before the transfer time has effect as if it had been
done by, or in relation to, the Commonwealth. Such a determination takes effect accordingly.
This provision is intended to ensure that if it is necessary for the effective transfer of ARCo's
relevant responsibilities, the Finance Minister can determine that the Commonwealth is
treated as if it did a thing which was done by ARCo. For example, for the purposes of
effectively managing insurance arrangements, it might be necessary to treat something done
by ARCo (such as being a member of a P&I club) as if it was done by the Commonwealth.
To avoid doubt, subitem (5) states that a certificate made by the Minister under this item is
not a legislative instrument. This provision is included to assist readers, as the instrument is
not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act
2003.
To avoid doubt, subitem (6) provides that this item does not limit item 2. Liabilities and
assets of ARCo are transferred under that provision even if they relate to actions about which
no determination has been made under this item.
Item 6 provides that ARCo is replaced by the Commonwealth for certain instruments, when
those instruments were in force immediately before the transfer time and the instrument
makes a reference to ARCo. Subitem (2) provides for an automatic substitution of the
Commonwealth where the instrument relates to an asset or liability which was transferred
under item 2, or a thing done by, or in relation to, ARCo, which is taken to have been done
by, or in relation to, the Commonwealth under item 5.
5
This means that if assets and liabilities are transferred to the Commonwealth under item 2,
the Commonwealth would be substituted as a party to ARCo's existing contracts which are
relevant to one or more of those assets or liabilities. For example, insurance contracts to
which ARCo is a party would be continued in existence with the Commonwealth substituted
for ARCo in those contracts.
Subitem (4) allows the Finance Minister to determine that the Commonwealth is substituted
for ARCo in an instrument if it does not relate to a relevant asset, liability or thing done for
the purposes of subitem (2).
To avoid doubt, subitem (5) states that a determination made by the Minister under this item
is not a legislative instrument. This provision is included to assist readers, as the instrument is
not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act
2003.
Item 7 provides for the substitution of the Commonwealth for ARCo as a party to any
proceedings that were pending in any court or tribunal to which ARCo was a party, where
they relate to an asset or liability transferred to the Commonwealth under item 2. This
provision is designed to ensure that any existing litigation is not affected by this Bill.
Subitems (4)-(6) allow the Finance Minister to determine that the Commonwealth is
substituted for ARCo in proceedings if they do not relate to a relevant asset or liability for the
purposes of subitem (2).
To avoid doubt, subitem (7) states that a determination made by the Minister under this item
is not a legislative instrument. This provision is included to assist readers, as the instrument is
not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act
2003.
Item 8 provides that any records or documents that were in ARCo's possession immediately
before the transfer time are transferred to the Commonwealth's custody. The Note refers to
the fact that ARCo documents are Commonwealth records under the Archives Act 1983.
Part 5--Other matters
Part 5 (items 12-17) contains miscellaneous provisions.
Item 9 provides that the rules may specify a Commonwealth entity under the PGPA Act
which has a function of managing, on behalf of the Commonwealth, some or all liabilities
that are liabilities of the Commonwealth because of the operation of the Bill and which that
entity has agreed to manage on the Commonwealth's behalf. If such a rule is made, this item
confers that function on the entity. This gives scope for the Commonwealth to come to an
agreement with a Commonwealth entity (including a corporate Commonwealth entity which
has defined statutory powers and functions) under which it will assist the Commonwealth to
manage particular ARCo liabilities if it is considered appropriate.
Item 10 provides that particular obligations under the Corporations Act with respect to the
treatment of company records which would otherwise attach personally to the directors of
ARCo are instead attached to the Commonwealth. This ensures that the directors of ARCo,
who are public servants serving in an ex officio capacity, do not personally have any ongoing
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responsibilities to maintain records when the Commonwealth will have custody of relevant
papers pursuant to this Bill (and in accordance with the Archives Act).
Item 11 provides that State and Territory taxes, such as stamp duty, do not apply to the
transfer of the assets and liabilities from ARCo to the Commonwealth. This item is a
standard provision contained in Commonwealth laws effecting the transfer of assets and
liabilities and ensures that the transfer is treated as an effective substitution of the
Commonwealth in place of ARCo with respect to the assets or liabilities without creating an
unintended consequences of the transaction.
Item 12 provides that a document that appears to be a certificate made or issued under this
Part is taken to be such a certificate and is taken to have been properly given, unless the
contrary is established. This means that any certificate made or issued under this Part (for
example a certificate made under item 3 or 4) is taken to be authentic and accepted as proof
of its contents until proved otherwise.
Item 13 provides for compensation to be paid by the Commonwealth to a person from whom
property is acquired on other than just terms within the meaning of section 51(xxxi) of the
Constitution. If the Commonwealth and the person in question cannot agree on the amount of
any such compensation to be paid, the Federal Court of Australia may determine a reasonable
amount of compensation for the acquisition of the property.
Item 14 provides that the Finance Minister may, by writing, delegate all or any of his or her
powers and functions under the Bill to either the Secretary of the Department of Finance, a
member of the Senior Executive Service (SES) of the Department, or an acting SES
employee of the Department. Subitem (2) provides that in exercising powers or functions
under a delegation, the delegate must comply with any directions of the Minister.
Item 15 provides that the Finance Minister may, by legislative instrument, make rules
prescribing matters required or permitted by the Bill to be prescribed by the rules, or
necessary or convenient to be prescribed for carrying out or giving effect to this Act. These
matters may relate to the deregistration of ARCo, matters that occur after the transfer time
that relate to ARCo, reporting obligations which apply after the transfer time, or the
enactment of the Bill.
This item is a standard provision which will allow for additional transitional rules to assist in
giving effect to this Bill, including dealing with transitional matters that were not foreseen
when the Bill was being drafted. Rules may be made which, for example, provide for the
handling of any outstanding reporting obligations which apply after the deregistration of
ARCo, or in relation to an agreement the Commonwealth reaches with another
Commonwealth entity to manage ARCO's former liabilities on its behalf.
The rules may modify the operation of the Schedule. This enables any unforeseen
complications that may arise from the transfer of ARCo's remaining responsibilities to the
Commonwealth to be dealt with if they arise. For example, if an arrangement or liability is
discovered or arises after the enactment of this Bill and it is not considered appropriate to
treat that matter in the way automatically provided for under the Bill, rules could be made in
relation to that particular matter to facilitate its effective handling. This might arise if, for
example, an instrument makes reference to ARCo but it is not appropriate to substitute the
Commonwealth for ARCo in that instrument in the circumstances (eg because it is not
possible for the instrument to operate as intended if it refers to the Commonwealth).
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For similar reasons, rules made for the purposes of subitem (2)(a) (matters relating to the
deregistration of ARCo under the Corporations Act 2001) or (2)(b) (matters that occur after
the transfer time that relate to ARCo) may be expressed to take effect retrospectively if that is
necessary for their effective operation. For example, if ARCo does a thing after the transfer
time which gives rise to some other obligation or liability, rules could be made which provide
that the Commonwealth is to be treated as if it did the thing done by ARCo.
Subitem (5) also lists matters that may not be covered by the rules, to avoid doubt. These
include imposing penalties or taxes, creating appropriations or amending the Act.
8