Senate Finance and Public Administration Legislation Committee, , 0:04 to 23:47
The Office of the Registrar of Indigenous Corporations (ORIC) discusses monitoring non-compliance, tracking Indigenous corporation trends, and director identification systems.
Topics: First Nations, Integrity, Law reform
Speakers: Speaker 2, Kerrynne Liddle, Karen Grogan, Unknown Speaker, Senator Kerrynne Liddle
Good morning. I declare open this hearing of the Senate Finance and Public Administration Legislation Committee into the 202526 additional estimates. I begin by acknowledging the traditional custodians of the land on which we meet today and pay my respects to their elders past and present and extend that respect to ainal tourist rate islander peoples here today. The committee has set Friday the 20th of February 2026 is the date by which senators are to submit written questions on notice and Friday the 10th of April 2026 is the date for the return of answers to questions taken The committee's proceedings today will begin with the indigenous portfolio agencies as listed on today's program. Understanding order 26, the committee must take all evidence in public session. This includes answers to questions on notice. I remind all witnesses that in giving evidence to the committee, they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee and such an action may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence. The Senate has endorsed the following test of relevance for questions at estimates hearing. Any questions going to the operations or financial positions of the departments and agencies which are seeking funds in estimates are relevant questions for the purpose of the estimates hearing. I remind officers that the Senate has resolved that there are no areas in connection with the expenditure of public funds where any person has discretion to withhold details or explanations from the parliament or its committees unless the parliament has expressly provided otherwise. The Senate has resolved also that an officer of a department of the Commonwealth shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution does not preclude questions asking for explanations of policy or factual questions about when and how policies were adopted. Witnesses are reminded of the Senate order specifying the process by which a claim of public interest immunity should be raised and I incorporate the public immunity statement into the hands. I remind senators of their obligation under the behavior code for Australian parliamentarians to treat witnesses with dignity, courtesy, fairness, and respect. And as is my usual practice, I've provided copies of the code in the room for your reference. An officer called to answer a question for the first time should state their name and the capacity in which they appear. And I remind committee members and witnesses who are appearing via video conference and who are not speaking to mute their microphones. Welcome to uh Senator the Honorable Melender McCarthy, Minister for Indigenous Australians. Mr. Trisha Straoud, register of Aboriginal and Toouristra Islander Corporations and other officers. Minister, would you like to make an opening statement? >> Good to be with you, Senator, and the committee. Thank you. Uh Mr. Stra, would you like to make an opening statement? >> Okay. Well, let's get straight into it. We will go to Senator Little.
I'd like to ask and thank you for for being here. Um I'd like to ask a few questions obviously around uh governance and the first one is register you've stated that you've advised the minister's office that the cats act amendments are needed on what specific dates have you done that?
>> I don't recall the dates senator. I'd have to take that on notice.
>> Is it one occasion or several occasions?
uh one occasion.
>> Okay. If you can provide the date of
that letter,
>> so did can you recall whether you actually received a response to that
>> Uh I'll have to get the date again to you uh Senator, but it was in uh the context of an incoming brief and in the context of one of my uh regular catchups with the minister. uh so not a formal written uh correspondence uh nor one that sought a response from the minister's office.
>> Given the uh examples that I've given over a long period of time of some governance issues in organizations that continue to be funded even while in administration can you tell me have you received any information about the prior or correspondence in relation to the prioritization of issues in relation to governance and the katsy act? Sorry,
Senator, can you repeat that again?
>> So, I'm asking given the examples of uh governance issues in some of these organizations that are quite public at times, have you received any correspondence back from the minister's office that uh explains the prioritization of governance issues in those organizations or changes to the Katsy act by the government? No, >> So, can I ask uh what specific regulatory actions has ORIc been unable to take against the over 1,000 non-compliant corporations? What what what is it about the Katsy Act that means that sometimes you're not able to take action against them?
Uh, Senator, uh, certainly, uh, Deputy Registar Huey can, um, uh, also answer. Uh, but I'd have to take that on notice. Uh, we are monitoring, uh, non-compliance of corporations through the powers we have at the moment. uh we have in the last 12 months as set out in my regulatory posture um revisited the use of other uh powers that um haven't been used um in some time. Uh and that's resulted in for example corporations being prosecuted for not holding uh AGMs. Uh so we've certainly fulfilled our regulatory and support functions um at the moment uh using the powers available to us and in fact using greater uh use of powers over recent times.
>> I'm trying to understand in the following questions how organizations seek to find safe havens from um uh regulation or from leading practice governance or even exclude themselves from those. And I'm interested to understand if you have any um um evidence of organizations that are seeking to either establish or move to the associations and corporations act and similar in their states and territories to avoid the regulatory and compliance burdens of ORIC [clears throat] or ASICH.
Uh Senator, I would have to take that on notice, but only in the sense of corporations that have moved out from under the uh Katsy act. Um I don't have that uh on hand at the moment. There are certainly a number of corporations usually anywhere between two to 300 which we dregister each year and they're corporations that um have failed to lodge reports um and have not lodged anything or conducted any business or interaction with Oric for a certain period and which we believe um are actually not conducting any business. >> whether any of those move over to the um associations act. Um I wouldn't know as far as I'm aware, but we'll confirm in our uh when we take it on notice. Uh ASICH doesn't identify uh indigenity of corporations registered under the corporations act and I am not aware of any of the um associations act under state and territory uh statutes that also identify. So to be able to identify how many migrate over I wouldn't be able to but I could tell you how many um uh voluntarily uh transition out from under the cats act.
Um I'm wanting to understand about uh why why is there no automated system or formal protocol for NIAA or the department of health when a corporation they fund is referred to the CDP for criminal prosecution? Why don't you explore that a little bit more about why there is this concerning firewall?
certainly um at prosecution stage that's something we can visit um as to whether we put in place formal mechanisms to formally advise funding bodies uh whether a corporation has been prosecuted we wouldn't notify them at the referral to CDP stage um anyway um and even though we might uh commence a formal process of notifying funding bodies it would be done so with us not knowing exactly what funding bodies uh corporations are funded by, noting that they're not required to um under the cats report to us which funding bodies they receive grants from.
>> I understand you had 29 successful prosecutions that were were actively receiving Commonwealth grants at the time of their conviction. Are you able to tell me um how many of those were actually actively receiving sorry how many of those 29 that you you prosecuted were actively receiving Commonwealth funds at the time of their prosecution?
>> Uh Senator apologies I'll have to take that one on notice as well. Um we will provide to the best of our ability the financial reporting details of those corporations. Um but it wouldn't be with absolute um certainty exactly how much and which funding bodies they receive it
>> Okay. If a large corporation fails to report for several years, does ORIc share that risk profile with NIAA's integrity group or is that also siloed by a lack of automatic information
So, a corporation remains on our website under the um uh reporting of corporations that have not yet lodged all of their reports. Uh and Senator notice uh noting that that has been enhanced um in the last uh 6 to 12 months in terms of the amount of information now provided on on that. So, it's for funding bodies to check that when they're doing their own due diligence on funding corporations as to whether corporations have outstanding uh reports. Once they're prosecuted, that also goes on our website. Uh we would only reach out to an integrity uh unit of any funding body where there are um [clears throat] substantiated allegations or where we have evidence of other um significant wrongdoing other than uh not just not reporting.
>> Right. Okay. Can I ask um the total number of corporations as at 5th of February 2026 was 3,364 um in a given that we're seeing businesses um go into administration shut down at record rates um because they're being affected by the economy. Um what is the trend that's happening now for indigenous corporations? Are you seeing more flip over to poorer governance or or are you seeing more uh folding up or more in administration? What are you seeing?
>> Uh Senator, I could take on notice and and get some specific data. Um our numbers of special admin administration is uh uh static. There's usually about four corporations at any time in special administration. Um they are typically um two factors. Uh one is financial um issues. Uh lack of maintaining financial uh records, directors not uh seeing financial reports and exercising their director uh duties um or disputes um in the the boardroom. Uh I off the top of my head I could think that there has been in the last 12 months um at least two special admin where the question of solvency um is a concern. Uh we have had in recent times a number of uh examinations where corporations have been issued show causes as to whether they are in fact uh solvent. Uh what that looks like in terms of stats and trends. I could um take that on notice and get some uh data to you.
>> Right. Okay. How many um how many corporations are yet to lodge their their reports? They were due on the 31st of December.
>> Okay. So the as of um 30 January um the reports that were due uh the 2425 reports due in December there are 2 61 corporations yet to lodge all of their reports. Um, as is the usual trend, the vast majority of that are small corporations. At the moment, that's about 74% of those corporations are small, which are corporations that are not required to lodge financial reports. They're corporations with under $100,000.
Can I just ask about your use of given the number of corporations changing directors you the use of um AI or other systems because even yesterday I was looking at um an example that appears to be a successful propos uh pro prosecution a few years ago where there is currently a director who was criminally prosecuted on a board currently. Um I'm just wondering how your systems pick up the movement of directors across organizations. um and the comp complexity of um uh identifying those linkages other than just stumbling across them.
>> Uh uh deputy registar can um contribute to this. He's uh the lead in a lot of our systems work. Certainly director identification will make that um easier noting that we've still uh some way to go in terms of getting all directors with uh director IDs.
>> Now hang on. What what what number have you got now? because it's been pretty low. >> just what Yeah, sorry to interrupt just
>> Um I will give you the exact number, but it is 45.6%. >> So it is steadily increasing, but um uh still not uh where we'd like it to be. Um the tracking of directors um is relying on directors uh full details, their names, their um personal details being absolutely consistent um in the [clears throat] uh system. Uh remembering that corporations are responsible for their details. So it's up to corporations to uh lodge details with the you know the full legal name of directors. Um but we do note that many directors or some directors um in some instances uh use different names shortened versions or you know junior senior different uh variations of uh their names. Uh if I'm uh honest with you, Senator, tracking directors that move from one corporation to another relies largely at this moment on uh our intel and knowledge of corporations or corporation members and other directors uh lodging uh reports of concern or suspicion that uh a director um uh isn't fit for uh duties. uh but only those directors that have been disqualified under the Catsy act um and are on the public register uh and are all directors uh in their consent and change of office forms are required to um declare that they are not a disqualified director. Only those directors are those that are legally unable to be a director of another corporation regardless of their >> the character or confidence and trust that members have in an individual.
Yeah, I'm I'm wondering on um the flow of information to you and intelligence from people about um some concerns within organizations. You know, if I get a correspondence from people, the first thing they say is, "I'm terrified." >> Of providing this information. And then they provide you with a bit of information that quite frankly is just extraordinary at times. I'm I'm wondering what you do with that information and what um if it's not clearly a governance issue in terms of uh the books, but there's clearly some people raising some flags about things that they um see as that I think a reasonable person would view as extremely serious and certainly an indicator. What do you do with that?
So Senator, there are a number of ways that an individual can lodge a reporter concern with Oric. They can do it uh confidentially um and they are always advised that the information will be held in confidence unless Oric is required by a court of law to disclose that information or they can provide the information um anonymously. uh and they're also advised that by doing so there are limitations on ORIC in terms of our engagement how much we can update them um and what have you. Uh but the balancing act for us is taking information uh that is provided um and having evidence of allegations that are being made. Uh we have internal referral um systems in place that uh if uh enough people uh make noises or there are enough flags um whether there um full kind of you know briefs of evidence for one of a better term uh that we might decide that there is enough smoke there that we might conduct an investigation. Um, conducting an investigation then often leads to uh some burden being lifted off the complainant um or the person reporting the concern in that the examiner goes in, examines the books of the corporation and are able to substantiate whether any of the allegations we're hearing are um um are truthful. Um and if so, it is then that an examination outcome will result in some type of compliance action um or a referral to our investigation team for a formal investigation.
>> Okay. All right. What if those allegations are sort of more full into rather than being strictly around compliance with the act maybe of a criminal nature?
>> Sorry, are of a criminal nature. >> Um if
>> potentially criminal nature.
>> Yeah. if they're of a criminal nature. Um, unfortunately the complainant is um and they're not offenses under the Catsy Act. Um, unfortunately the complainant is um advised that they're uh policing matters and that they would need to
>> Thank you. Okay. Um, I've got some questions uh around non-compliance Aboriginal health services and I know I'm asking these questions also in department of health. Canal Aberational Health Service is an [clears throat] organization that's registered with Oric and has a history of governance failures and is currently undergoing a forensic audit by the Department of Health disability and aging. Do you have any role at all in
I'm not aware of uh that one but in uh generally where our preference is if it is the allegation of misuse or misappropriation of uh funding that the funding body investigate it. Um if there are out of that also offenses under the uh cats act we would um consider them.
>> So
>> but I'm not aware of that specific
investigation. Right. But prior to DHDA commencing that investigation, were you aware of did you receive any communications or any information in relation to governance issues at Canal?
>> Yeah, I'd have to take that on notice.
>> And similar with respect to Wellington Ainal Corporation Health Service.
>> Yep.
>> Uh what have you played any role at all since it went into special administration last year?
Uh so uh Senator it's in um the purpose of special or the cause of special administration for Wellington uh was not around uh financial mismanagement or fraud allegations. It was around um dispute between uh directors um and to a point that directors couldn't convene meetings and govern the corporation. The special administrator is um uh in place and while we attend general meetings uh with the special administrator, we get reports from the special administrator, uh we don't uh have a hands-on role or interfere um uh too much into the special administration. uh noting that the special administrator replaces the board and so they're appointed to in effect govern the corporation in the interests of the members and the the corporation.
>> So can I also ask on in that question in relation to the APY council were you involved at all in relation to that going into administration? I understand it's not anymore but
>> APY council
>> APY in South Australia. I know the state government had a role to play in that, but did you play a role at all in that? >> Did you receive any information from anyone about issues at the APY council?
>> No. Apology, Senator, this is a a council, not an ainal corporation.
>> Yeah.
>> Yeah.
>> Yeah. Okay.
>> No. So, no role for us. Whether we were given um any information um uh about issues, I'd have to take on notice, but I would suspect not given it's not a corporation under the Cats
Act. Yeah, but that's why I asked if if you got any information rather than because people don't necessarily think that when they first contact the organization they see as being responsible for ainal governance. >> Y so you didn't receive any information about APY Council from anyone?
>> Uh not that I'm aware of, but I'll double check just to be certain.
>> Thank you. That's the end of my line of questioning. Thank you.
>> Thank you. >> Um thank you so much for your time this morning. We appreciate it. Um, we will let you go. Thank you.