The Co-operatives Amendment Bill 2015 was introduced into the Legislative Council by the Hon Michael Mischin, Minister for Commerce, on 18th November 2015.
If you want to
track progress of the Bill you can do so by accessing the following link:
The following extract has been lifted from the Minister’s First Reading Speech.
The Co-operatives Amendment Bill 2015 (the Bill) amends the Co-operatives Act 2009 (WA Co-operatives Act) to achieve consistency with the Co-operatives National Law (CNL) and to allow Western Australian (WA) co-operatives to participate in a national regulatory scheme for the registration and regulation of co-operatives.
Participation in the scheme will remove barriers to the development and expansion of co-operative enterprises and offer investment opportunities by allowing those WA registered co-operatives wishing to expand their operations to carry on business nationally, without any requirement to register in other jurisdictions.
Co-operatives are organisations that are owned and democratically controlled by members who have united to meet common economic, social or cultural needs. Capital is used to service the common needs of active members of the enterprise, rather than generating a dividend to shareholders.
There are currently 52 co-operatives registered in Western Australia. They operate a variety of enterprises including agriculture and aquaculture, grain distribution and marketing, value-added production, export development, retail trading, transport, arts and crafts, and construction and engineering. The majority of registered co-operatives are small to medium sized businesses, but the sector also includes some significant enterprises. The reported revenue of the sector was over $3 billion last financial year, and the largest co-operative in Australia — Co-operative Bulk Handling or CBH — is registered in Western Australia.
Each State and Territory has legislation regulating the registration and operation of co-operatives. Since 2007, Australian jurisdictions have been working to develop uniform legislation, recognising that fragmented, overly prescriptive and, in some instances, outdated legislation has placed co-operatives at a competitive disadvantage against entities registered under the Commonwealth Corporations Act 2001.
The Australian Uniform Co-operative Laws Agreement (the Agreement) came into effect in February 2012. The Agreement is aimed at providing a modern scheme that minimises regulatory burden, allows co-operatives to compete with other forms of enterprise on equal terms and facilitates interstate expansion and trade.
Western Australia and the other signatories to the Agreement agreed to either apply the Co-operatives National Law (developed by a national working party and enacted in New South Wales) or enact alternative but consistent legislation.
In 2010, Western Australia replaced the dated Companies (Co-operatives) Act 1943 with its current WA Co-operatives Act. As the national law was still under consideration at that time, the WA Co-operatives Act was developed in consultation with the Co-operatives National Law Working Group. Consequently, the WA Co-operatives Act already incorporates most elements of the national law.
For that reason, and to ensure that the powers of future WA Parliaments are not fettered, the WA Government decided to meet its commitment under the Agreement to achieve substantial consistency with the national law by amending the WA Co-operatives Act.
The Agreement requires jurisdictions choosing to enact alternative consistent legislation to seek approval from the Legislative and Governance Forum on Consumer Affairs (CAF) of their proposed consistent legislation. On 12 June 2015, CAF Ministers endorsed Western Australia's proposed amendments to its legislation, meaning that an amended WA Co-operatives Act will be regarded as being consistent for the purposes of the Agreement.
Mr President, I will now summarise some of the key elements of the Bill.
The majority of changes align the processes and terminology in the legislation with those in the national law, and will not have an impact on the day-to-day operations of co-operatives.
The most significant changes that will be made are of a regulatory nature as follows:
· A registered co-operative will be permitted to conduct business in any participating jurisdiction, subject to complying with the applicable provisions of the legislation in that jurisdiction. The Registrar of Co-operatives in that jurisdiction will retain the right to revoke that entitlement.
· Duties applying to the directors of co-operatives, and the defences available to an allegation of a breach of those duties, will be aligned with those that apply to the directors of proprietary companies. In accordance with changes proposed by the Directors Liability Reform Bill 2015 with regard to liability of officers, directors will only be liable for offences where culpability is established on the part of the officer concerned.
· Obligations in relation to accounting, auditing and financial reporting will be more closely aligned with those applying to proprietary companies, and reporting thresholds will be adjusted to allow non-distributing co-operatives to have access to the simplified auditing and reporting regimes that apply to small co-operatives.
· A mechanism will be introduced to allow a co-operative to adopt by reference any or all of the provisions of model rules prescribed by the regulations. Rules will be able to be altered more easily and only those changes that have potential to have a significant impact on the rights or obligations of members will require pre-approval from the Registrar.
On becoming a party to the Agreement, the Government undertook to consult stakeholders before amending the WA Co-operatives Act. National consultation was undertaken in relation to the draft national law and was promoted in Western Australia by the Consumer Protection Division of the Department of Commerce (Consumer Protection).
Following the finalisation of the national law, and its adoption as the co-operatives law in NSW, Consumer Protection released a consultation paper titled "Proposals to Align the Co-operatives Act 2009 with the Co-operatives National Law". The paper was distributed widely within the sector and an industry reference group was formed to discuss the proposed amendments.
As a result of that consultation, some differences between the WA Co-operatives Act and the national law will be preserved, including the following:
· the rules of a WA co-operative may allow a member under the age of 18 to vote;
· a member of a co-operative may also be the representative of a corporate member;
· a person who is not a member of the co-operative may act as a proxy if the rules of the co-operative permit it;
· provisions in relation to the valuation of shares of former members will take into account falls in the value of assets; and
· the timing currently prescribed in the WA Act for lodgement of annual reports and some applications will be retained.
All participating jurisdictions have accepted that these are minor differences of local application and will not prevent the WA Co-operatives Act from being accepted as substantially consistent for the purposes of the Agreement.
The changes proposed by the Bill have the full support of Western Australia's co-operatives sector.
Mr President, the Government is committed to providing a legislative framework for the co-operatives sector in Western Australia that is modern, efficient and fit for purpose.
Western Australia's participation in the national scheme through alternative consistent legislation, will offer immediate opportunities for growth and expansion for co-operatives in this State, and the proposed changes will aid the development of the sector in the longer term. The changes to be implemented by the Bill reflect the Government's commitment to streamline regulation, reduce red-tape and to increase opportunities for investment for small business in this State.
Pursuant to standing order 126, I advise that this Bill is a uniform legislation Bill. It gives effect to the Australian Uniform Co-operative Laws Agreement, an intergovernmental agreement to which the State is a party.
In accordance with Ministerial Office Memorandum 2007/01, the following information has been forwarded to the Standing Committee on Uniform Legislation and Statutes Review:
· a copy of the Australian Uniform Co-operative Laws Agreement 2012 and the Co-operatives National Law;
· a statement of the proposed timetable for implementation;
· a copy of the explanatory memorandum;
· a public statement of the Government's policy on the Bill;
· a summary of the advantages and disadvantages to the State of participation in the national scheme;
· details of constitutional issues, and in particular notification obligations arising under the Corporations Law Agreement with regard to the provisions displacing the Corporations Law in the regulation of co-operatives; and
· an explanation as to mechanisms for amendment of the Cooperatives National Law, and for the State to opt out of the scheme.”