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Australian Ownership Bill 2013

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2013

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

AUSTRALIAN OWNERSHIP BILL 2013

 

EXPLANATORY MEMORANDUM

 

 

Circulated by the authority of Hon Bob Katter MP

 

 

 

 

 

 

 

 

AUSTRALIAN OWNERSHIP BILL 2013

OUTLINE

The Bill limits foreign investment in Australian agribusiness and agricultural land, unashamedly protecting our agricultural and food security. The Bill prevents a foreign person or bodies from holding ownership interests of more than 49% in an Australian agribusiness or a parcel of Australian land of 4 hectares or greater. The Bill aims to protect the future of Australia’s food security and our long-term strategic economic interests.

Recently, there has been a significant increase in foreign-controlled bodies purchasing domestic agricultural land and agribusinesses. The Foreign Investment Review Board (FIRB) has in effect become a ‘rubber stamp’ for foreigners.

With a rapidly increasing global population, top-quality agricultural land has never been more valuable. This Bill aims to redress the sell-off of Australia overseas. There are currently complexities and uncertainty around the level of foreign ownership, with the current ‘national interest’ test lacking strength.

This Bill also recognises that in limited circumstances, foreign investment is necessary to provide our farmers and producers with the only exit possible from many years of unfair prices; or to open new markets, provide new technology or finance. If the foreign person or body can demonstrate that the acquisition will provide substantial benefits to the nation and is the national interest, (for example, inter alia , by the opening of new markets; by providing for the financial betterment of all Australians; or by providing for either or both technological advancement and major capital investment,) then the exception may prevail.

 

 

 

 

 

 

 

 

 

 

 

FINANCIAL IMPACT STATEMENT

There is no financial impact associated with the Bill.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STATEMENT ON COMPATIBILITY WITH HUMAN RIGHTS

The Statement of Compatibility with Human Rights appears at the end of this Explanatory Memorandum.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOTES ON CLAUSES

 

Part 1 - Preliminary

Clause 1 - Short Title

This is a formal provision specifying the short title.

Clause 2 - Commencement

The Bill’s provisions are to commence the day after the Bill receives Royal Assent.

Clause 3 - Extension to external Territories

This Bill also extends to external Territories.

Clause 4 - Act prevails over other inconsistent law

This Bill prevails if there are any inconsistencies with the Foreign Acquisitions and Takeovers Act 1975.

Clause 5 - Definitions       

This sets out definitions for the Bill.

 

Part 2 - Maintaining Australian ownership of Australian agribusiness and Australian land

Clause 6 - FIRB review of foreign investment proposals affecting large Australian agribusiness or Australian land  

This Clause gives power to the Foreign Investment Review Board (FIRB) to review any proposal that would result in a foreign person or bodies to acquire;

·          A controlling ownership interest in a large Australian agribusiness;

·          Relevant influence over a large Australian agribusiness;

·          An ownership interest in any parcel of Australian land more than 4 hectares.

The Foreign Investment Review Board (FIRB) must consider whether the proposal would be contrary to the national interest and make recommendations to the Treasurer.

 

 

 

The Treasurer is to consider the recommendations by the Foreign Investment Review Board (FIRB), and to consider whether;

·          the foreign acquisition would be contrary to the national interest; or

·          the foreign acquisition would contravene Clause 7 (limits on foreign investment in large Australian agribusiness and Australian agricultural lands by preventing a foreign person or bodies from holding ownership interests of more than 49% in an Australian agribusiness or a parcel of Australian land of 4 hectares or greater).

The Treasurer is to give written notice of this determination and prohibit the acquisition.

Of the foreign person or body contravenes this notice, the penalty is 50% of the value of the person or body’s share of the ownership interest. There is a continuing offence penalty of $500,000 for each day thereafter. If a corporation commits an offence, then an officer of the corporation may be liable for a $100,000 penalty.

If the foreign person or body continues to acquire the interest or influence contrary to this notice, the Treasurer may in writing order the person or body to dispose of the acquisition (mandatory divestment). If a foreign person or body continues to contravene the written notice relating to the ‘forced divestment’, the penalty is 50% of the value of the person or body’s share of the ownership interest. There is a continuing offence penalty of 5% for each day thereafter. If a corporation commits an offence, an officer of the corporation may be liable for a $100,000 penalty.

Clause 7 - Limit on foreign investment in large Australian agribusiness and Australian land

This Clause prevents a foreign person or body from holding ownership interests of more than 49% in an Australian agribusiness or a parcel of Australian land of 4 hectares or greater. The Treasurer must inform the foreign person or body in writing if this has been contravened.

If a foreign person or body commits an offence, the penalty is 50% of the value of the person or body’s share of the ownership interest. There is a continuing offence penalty of 5% for each day thereafter. If a corporation commits an offence, an officer of the corporation may be liable for a $100,000 penalty.

Clause 7 provides an exception to a foreign person or body from holding ownership interests of more than 49% in an Australian agribusiness or a parcel of Australian land of 4 hectares or greater. To apply, the Foreign Investment Review Board (FIRB) must determine in writing that the holding of the ownership interest by the foreign person or body provides substantial benefits to the nation and is in the national interest (for example, inter alia , by the opening of new markets; by providing for the financial betterment of all Australians; or by providing for either or both technological advancement and major capital investment).

It is the responsibility of the Foreign Investment Review Board (FIRB) to make or refuse to make this decision.

Here, the foreign person or body (defendant) bears an evidential burden - so rather than requiring proof beyond reasonable doubt, it is sufficient for the defendant to point to enough evidence that tends to establish the exception, and the prosecution must disprove it. Here, the evidence is peculiarly within the knowledge of the defendant, so that it would not be reasonable to expect the prosecution to be able to establish the matter beyond reasonable doubt without the defendant producing evidence that the acquisition was in the national interest and provided substantial benefits to the nation.

 

Clause 3 - Miscellaneous  

Clause 8 - Anti-avoidance  

This anti-avoidance clause prevents persons or bodies from seriously undermining the Bill, by acquiring multiple parcels of adjoining land or multiple acquisitions.

Clause 9 - Application of Part 2

This Bill applies to any proposal made after the Bill commences.

The Bill also applies to any new proposals that have been made but not yet approved. The Foreign Investment Review Board (FIRB) can then review it and Treasurer can prohibit it.

If it has been foreign owned for more than 12 months, then the Foreign Investment Review Board (FIRB) cannot review it, and consequently the Treasurer cannot prohibit it. Any existing arrangements that have been in place for at least 12 months are not going to be affected by the Bill.

Clause 10 - Application of Crimes Act 1914  

This Clause specifies that the Crimes Act 1914 does not apply to this Bill.

Clause 11 - Australian Ownership Rules  

This Clause specifies that the Minister may make legislative instruments in order to carry out or give effect to the Bill.

 

 

 

 

 

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

AUSTRALIAN OWNERSHIP BILL 2013

This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the Bill

The object of this Bill is to limit foreign investment in Australian agribusiness and agricultural land to prevent foreign persons or bodies from holding ownership interests of more than 49% in an Australian agribusiness or a parcel of Australian land comprising 4 hectares or greater.

Human rights implications

This Bill does not engage any of the applicable rights or freedoms.

Conclusion

This Bill is compatible with human rights as it does not raise any human rights issues.

 

Hon Bob Katter MP