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December 23, 2008

Australian Government responses to the Clarke Inquiry and other counter-terrorism reviews

The Attorney General has announced the Government’s response to reviews of national security legislation as well to the public report of the Inquiry by the Hon. John Clarke QC into the case of Dr Mohamed Haneef .

The Government will establish a National Security Legislation Monitor to review the practical operation of counter-terrorism legislation on an annual basis.

The Government will change the title of the offence of “sedition” to “urging violence". It will also ensure there is an offence of urging violence against a group or individual on the basis of race, religion, nationality, national origin or political opinion.

The Government will establish a Parliamentary Joint Committee on Law Enforcement to extend parliamentary oversight to include the Australian Federal Police.

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Posted 23rd December 2008 by David Jacobson in Current Affairs

February 13, 2008

Apology to Australia’s Indigenous Peoples

Here is the text of today's apology by Parliament to the Stolen Generation.

Reconciliation Australia has background information.

UPDATE: ABC News video and audio of the Prime Minister's speech in support of the apology.

The text of the speeches made by the Prime Minister and Leader of the Opposition are now available from Parliament:

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Posted 13th February 2008 by David Jacobson in Current Affairs

February 8, 2008

Saying Sorry and the Bringing Them Home Report

The Parliamentary Library has published a Background Note ‘Sorry: the unfinished business of the Bringing Them Home report'.

The note provides a useful summary of the Bringing Them Home report recommendations relating to an apology and compensation as well as a chronology.

UPDATE: ABC News will broadcast Mr Rudd's statement of apology to the Stolen Generation live on television and radio next Wednesday 13 February at 8.55am AEDT.

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Posted 8th February 2008 by David Jacobson in Current Affairs

October 14, 2007

Comonwealth election 2007

So the election has been called for 24 November 2007.

That means that Parliament is unlikely to sit before February 2008 when the unfinished business of this Parliament will be reviewed by the new Government (whichever party succeeds) and the expected many election promises will be implemented.

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Posted 14th October 2007 by David Jacobson in Current Affairs

August 28, 2006

When is a director “fit and proper”?

VBN and Ors and Australian  Prudential Regulation Authority and Ors contains a detailed analysis of APRA's powers to decide that a director is not "fit and proper". In the decision the AAT reviewed decisions by the Australian Prudential Regulation Authority (APRA), to disqualify seven of nine former directors of a Trustee of a superannuation fund (Trustee) as a director of the Trustee.

APRA had made its decisions on the basis that the Trustee had contravened the Superannuation Industry (Supervision) Act 1993 (SIS Act) and that the nature or seriousness of the Trustee’s contraventions provided grounds for the disqualification of each of them.

In relation to two of them, APRA also decided that two of them were not fit and proper persons to be responsible officers of a body corporate that is a trustee and disqualified them under s 120A(3).

The AAT set aside the decisions after finding that the Trustee had not contravened the SIS Act and that it was not satisfied that two of them were not fit and proper persons to be responsible officers of a body corporate that is a trustee. The effect of the setting aside all of APRA’s decisions is that none of the applicants is a disqualified person within the meaning of the SIS Act.

In respect of the 2 directors deemed not fit and proper the AAT said there were 2 issues:

  • what is meant by the expression “fit and proper”?
  • did the 2 directors, or either of them, have a conflict of the duties they owed to the Employer and those they owed as Directors of the Trustee?

The decision analyses the investigatory powers of APRA and the construction of the section which deals with disqualification of a person who is not fit and proper:

Section 120A(3) of the SIS Act encompasses two steps. The first is to decide whether or not either VBN or VBW is a fit and proper person
to be a trustee, investment manager or custodian or a responsible officer of a
body corporate that performs one of those functions. If we decide that they are not, we must take
the second step to decide whether or not they, or either of them, should be
disqualified. We must take that second
step because there is, inherent in the use of the word “may” in s 120A(3) a discretion.
[para 519]

a person who was a
responsible officer of a trustee at the time that it contravened the SIS Act,
and the nature, seriousness or number of the contraventions provided grounds
for disqualification of that person under s 120A(2), would not be a fit and
proper person. A similar analysis would
mean that a person who had contravened the SIS Act in circumstances justifying
disqualification under s 120A(1) would not be a fit and proper person
.[para 528]

That there is a
potential for conflict between the interests of the directors and their role is
an integral part of the scheme established by the SIS Act. ... The potential
for conflict by virtue of their appointment alone does not mean that there is a
conflict of the sort that means that an individual director is in breach of a
fiduciary duty. There must be something
more that shows that there is in fact a conflict of duty between the interests
of the directors of a trustee of a fund. This must be determined by reference to the circumstances and not by
reference to a formula or recitation of principle. Do the circumstances show that a director was
in a position in which that director’s interests or those of another for whom
he or she had responsibility or to whom he or she owed a duty conflicted with
the interests of the trustee?...

Having regard to all
of these matters, we are satisfied that VBW disclosed his interest and the
nature of his interest as a result of his position with the Employer. Taken in the context of their appointments
and their decisions to give him and others the task of dealing with the
Employer, he did so in sufficient detail to reveal his position and to ensure
that the Directors were fully informed of all the information that they needed
to make a proper decision. We are
satisfied that he was not in a position of conflict of interest...

the Trustee’s
Board had all of the information that they needed in order to make a decision
about what it should do about the Employer’s Offer. VBN was not in possession of any information
that it did not have but that it should have known or that could have assisted
it with its deliberations. There is no
evidence that satisfies us that he influenced, or attempted to influence, the
course of the Board’s deliberations.

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Posted 28th August 2006 by David Jacobson in Compliance, Corporate Governance, Current Affairs, Financial Services, Insurance

December 18, 2005

USA anti-terrorist laws not renewed

During Australia's recent debate about its new Anti-terrorism Act there was discussion about a sunset clause (to ensure that the law would expire after a set period of time). Although there was argument for a 5 year sunset period, the provisions will sunset after 10 years  and will be reviewed by COAG after 5 years.

It is interesting to look at the US review process for its anti-terrorism laws introduced after the 11 September 2001 attacks.

The Wall Street Journal reports that the US senate has blocked renewal of certain Patriot Act provisions.

Whilst it is possible that an extension may be negotiated, the US public is concerned about alleged privacy and civil liberties breaches by the Bush Administration.

UPDATE: Washington Post: President acknowledges approving secret eavesdropping

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Posted 18th December 2005 by David Jacobson in Current Affairs, Financial Services, Privacy

November 29, 2005

Senate report on Anti-Terrorism Bill

The Senate Legal and Constitutional Legislation Committee Inquiry into the provisions of the Anti-Terrorism Bill (No. 2) 2005 has delivered its Report.

It has recommended that the Senate pass the Bill subject to 50 amendments listed in its Recommendations.

In particular the Committee recommended the deletion of Schedule 7 dealing with sedition. The recommendations also cover preventative detention and control orders.

Chapter 7 of the report deals with anti-money laundering and and terrorism financing. Whilst it noted concerns it only recommended a review in 5 years.

Recommendations 40-44 deal with the topic of "National Security Notices" discussed by me here.

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Posted 29th November 2005 by David Jacobson in Business Planning, Current Affairs, Financial Services, Privacy

August 31, 2005

8 former US KPMG partners indicted

This New York Times story carries details of indictments presented against 8 former partners of the US branch of KPMG accountants (a separate firm from KPMG Australia) together with an outside lawyer.

The indictments allege not only that the accused conspired to defraud the government by advising clients to enter fraudulent tax shelters and preparing tax returns to conceal them but also that they concealed information from investigators.

The article says "According to the indictment, one defendant, Mr. Eischeid, gave "false,
misleading and evasive" testimony to the I.R.S. in 2002 about certain
tax shelters. The indictment cited an e-mail message from one KPMG
partner who wrote that the firm's general counsel and outside lawyer
"determined that the best strategy was 'the less said the better.' " As
a result, the e-mail message continued, "the record will reflect
repeated 'I don't knows,' 'I don't recalls,' and 'I was out of the
loops' - the rope-a-dope/Enron defense."

A federal judge has approved a US$456 million (AUD 606 million) settlement between KPMG and the
Justice Department that allows the firm to avoid a criminal indictment.

UPDATE 18 July 2007: Washington Post reports that a federal judge has tossed out indictments against 13 former KPMG
executives in the government's largest criminal tax-fraud
case ever, citing "intolerable" prosecutorial abuses that deprived the
officials of their constitutional right to a defense.

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Posted 31st August 2005 by David Jacobson in Current Affairs

July 19, 2005

Australian immigration detention: the Palmer Report

The Palmer Report into the immigration detention of Australian citizen Cornelia Rau has been released.

The report exposes serious cultural and organisational problems in the Immigration Department.

The Main Findings conclude that compliance officers had "little or no formal training and a poor understanding of the legislation they are enforcing". "Officers lack basic investigative and management skills". "There was a failure of executive leadership".

It's a tragedy.

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Posted 19th July 2005 by David Jacobson in Current Affairs

February 15, 2005

Money laundering

New international anti-money laundering standards will oblige Australia to expand customer due diligence requirements for financial institutions and extend anti-money laundering obligations to non-financial businesses and professions such as real estate agents, dealers in precious metals and stones, accountants, trust and company service providers, legal professionals and notaries.

Existing account identification requirements will be strengthened and better record keeping will be required.

A new Bill is expected to be introduced into Parliament this year.


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Posted 15th February 2005 by David Jacobson in Anti-money laundering, Current Affairs, Financial Services
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