Mr MACPHEE (Minister for Employment and Industrial Relations)(9.5) —I move:

That the Bill be now read a second time.

This Bill relates to two important areas of the affairs of federally registered organisations of employers and employees. The first area concerns the fitness for office of officers of those organisations or of individuals who aspire to office. The second area involves the use of the financial resources of such organisations to make loans, grants or donations. These provisions take account of and develop recommendations made in the report by the Royal Commission into the Activities of the Australian Building Construction Employees and Builders Labourers Federation-the Winneke report. The Royal Commission was established in 1981 and reported to the Commonwealth and Victorian governments in May of this year. The report of the royal commission identified serious shortcomings in the affairs of the Federation and in the conduct of certain of its officers, about which I do not propose to speak now.

I need only inform honourable members that these matters, which have been widely reported and achieved considerable notoriety, led the Royal Commission to make certain recommendations as to action to be taken by the Commonwealth and Victorian governments. One recommendation was for the Conciliation and Arbitration Act to be amended to disqualify an officer of an organisation who was convicted of an indictable offence involving an abuse of that office, from holding that or any office in the organisation, and for that person to remain ineligible for such office or offices for a period of five years. Another recommendation was made for an amendment to the Act to provide that the funds of any registered organisation, or any branch, should not be applied in the granting of loans to any officer or member of the organisation or branch unless the terms and conditions upon which the loan is to be granted have been fully disclosed to and approved by the membership of the organisation or branch in general meeting. Both of these recommendations highlight the need for the honest administration of registered organisations. These bodies play a vital role in Australian society. It is plainly against the interests of the community and the members of registered organisations if their administration is not competent and honest. The Government does not doubt that by far the majority of registered organisations are honestly run, and not only the Royal Commission into the Builders Labourers Federation but also that into the Federated Ship Painters and Dockers Union has shown that there is an urgent requirement for legislation to combat corruption in the management of registered organisations.

In framing this Bill, the Government has had regard to the longstanding prohibition in the uniform companies Acts on certain persons managing corporations. Similarly, the requirements in that legislation about loans to directors of companies and certain other individuals have been noted by the Government. While the Government does not consider that a close comparison can be drawn between companies and registered organisations, nonetheless the community and the members of these bodies are entitled to expect an equally high standard of integrity to be applied for those who are entrusted with the management of their affairs. Indeed, the Royal Commission into the Activities of the Builders Labourers Federation in making its recommendation concerning disqualification also drew attention to the standards required of company directors in this regard.

So, as I have said, this Bill contains provisions based on those contained in the co-operative companies legislation which disqualify certain persons from being involved in the management of a corporation. I would, in this regard, draw the attention of the House particularly to sections 227 and 562 of the Companies Act 1981. The policy in relation to these companies provisions is under consideration in the context of the planned exposure draft of the Companies and Securities Legislation (Miscellaneous Amendments) Bill 1983. It is hoped the the Ministerial Council for Companies and Securities will later this year agree to this exposure draft being made available for public comment. The Attorney- General (Senator Durack) has directed his Department to ensure that when the public comments on the exposure draft are being examined, consideration is given to the question whether the companies provisions need any amendment so that, as far as possible, they cover the same range of offences as those set out in proposed sub-section 132F (1) contained in this Bill and to the question whether any other adjustments would be desirable to the companies legislation to bring it into line with the relevant provisions of this Bill. I should also inform honourable members that this present legislation has been the subject of detailed discussion with the members of the National Labour Consultative Council and takes account of their most helpful observations.

Let me outline the provisons of this Bill for honourable members. The Bill will disqualify a person from holding office or being eligible to become a candidate for election or to be elected or appointed to an office within any organisation unless a period of five years has elapsed since he was convicted of an offence of a specified type or released from prison for the conviction as set out in clause 4 of the Bill by a proposed new section 132F. The categories of offences are:

(i) an offence involving fraud and dishonesty punishable on conviction by imprisonment for a period of not less than three months;

(ii) specific and serious offences against the Conciliation and Arbitration Act and Regulations;

(iii) an offence in connection with the formation, registration or management of an association or organisation other than those covered by (ii) above; and

(iv) any other offence involving the intentional or reckless use of violence towards another person or the intentional or reckless causing of death or injury to another person or the intentional or reckless damaging or destruction of property.

The first three of these categories are derived from the Companies Act. The fourth arises from our consideration of what Royal Commissioner Costigan had to say in his various reports.

The Government recognises, of course, that there is a wide range of activities which will come within the scope of these categories. There have to be opportunities for convicted persons holding or seeking office in organisations to have what they have done measured against the holding of or standing for office. Accordingly, the Bill provides an office holder or a candidate for election or appointment to any office who has been convicted of one of the classes of offence I have referred to with the right to seek leave from the Federal Court of Australia to continue to hold office or to be eligible for election or appointment. If the Court grants the application, the applicant will not be disqualified under the legislation. Where the Court refuses the application, the disqualification will continue to operate but it may, if the Court thinks fit, be reduced to a period less than five years. There is provision in the Bill to enable the disqualification provisions to be enforced in the Court on application by the organisation, a member of the organisation or the Industrial Relations Bureau.

The Bill will permit certain financial assistance to some individuals concerned in leave and enforcement proceedings before the Court. The Bill will not apply to existing office holders who committed an offence before the date on which the Act comes into operation. It will apply to all office holders who commit a prescribed offence after the Act comes into operation unless within 28 days after being so convicted the office holder seeks the leave of the Court to continue in office. All persons who have been convicted of a class of offence such as I have referred to, whether before or after the commencement of the Act and who wish to become a candidate for election to an office within any organisation, or to be elected or appointed to an office within any organisation , will come within the scope of the Bill unless a period of five years has elapsed since that conviction. Such a person will be able to seek the leave of the Court to become a candidate for election or appointment to office. Where the leave of the Court is sought, the Court will be empowered to:

Grant the person leave to continue in office, to become a candidate for election or be appointed to office as the case may be; or

Refuse leave to that person to continue in office or to become a candidate for election or be appointed to office as the case may be; and

If the Court thinks fit, specify a period of less than five years during which the person concerned may not seek election or be appointed to or hold office.

Criteria to guide the Court in dealing with cases before it are set out in clause 4 of the Bill by a proposed new section 132E. They are modelled on pronouncement by the courts in this country when they have been called upon to deal with similar types of cases arising from the operation of companies legislation.

I turn now to what the Bill contains about the making of loans, grants and donations by organisations. There are already detailed provisions in the Act and the regulations designed to give persons having a genuine interest access to certain information about decisions taken by organsiations to make loans, grants and donations. However in light of what the report of Mr Winneke, Q.C., brought forth, the Government has decided that these provisions do not go quite far enough. And, as I have said, we have taken note of and developed a recommendation which Royal Commissioner Winneke made on this subject. The upshot is that, by the provisions of the Bill, all loans, grants or donations of $1,000 or more will have to be approved by the committee of management of an organisation or branch, as appropriate.

Moreover the Bill requires that the rules of organisations provide for the committee of management concerned to satisfy itself before it makes a loan, grant or donation that it is in accordance with the rules and, in the case of a loan, that, in the circumstances, any security is adequate and repayment arrangements are satisfactory. Consistent with the provisions in the companies legislation, the requirements relating to loans, grants or donations will not include anything done by the organisation to provide a person with funds to meet expenditure incurred or to be incurred for the purposes of the organisation or the purpose of enabling him to perform properly his duties as an officer of the organisation.

Details of all loans, grants or donations of $1,000 or more will have to be filed annually with the Industrial Registrar along with the other financial returns an organisation is required to file. However, an organisation will be able to file these details of loans, grants or donations separately. Consistent with norms of privacy, when an organisation certifies that a loan, grant or donation has been made to relieve a member or a dependant of a member from severe financial hardship it will not be necessary for the organisation to include in material it filed with the Registrar the name and address of the member or dependant. Finally, details of all loans, grants or donations filed with the Registrar will be available for imspection by a member of the organisation.

This is responsible and reasonable legislation. It is legislation which, I believe, the community expects. It is legislation which any self-respecting organisation will welcome. Organisations run competently and honestly have nothing to fear from it. It will protect a high standard of administration in organisations. I want to emphasise that the legislation does not single out the trade union movement for attention. The Bill applies equally to organisations of employers registered under the Conciliation and Arbitration Act.

It is unfortunate to say the least that the behaviour of some notorious trade union officials may have done a grave disservice to the reputations for honest administration enjoyed by so many other officals of organisations in this country. However, the members of organisations registered under the Conciliation and Arbitration Act are entitled to have protection against untoward activities that might be engaged in by officials. At the same time, as I have pointed out to the House, there are safeguards in the Bill to protect the individual officials of organisations. The Bill is certainly not intended as a reflection on the probity of the great majority of hard-working officials of employer and union bodies in this country. Such officials should not see it as an adverse reflection upon them any more than the great majority of company directors should see similar provisions applying to them as reflecting upon their integrity. I commend the Bill to honourable members.

Debate (on motion by Mr Hawke) adjourned.