House of Representatives

Explanatory Memorandum

(Circulated by authority of the Prime Minister, the Honourable John Howard, MP)

Outline

The Bill is intended to ensure that Royal Commissions can provide information regarding possible contraventions of a law to the persons and agencies responsible for the administration or enforcement of that law, such as the Australian Securities and Investments Commission (ASIC). The Bill is also intended to ensure that Royal Commissions are able to obtain information from ASIC and AUSTRAC.

The Royal Commissions Act 1902, the Australian Securities and Investments Commission Act 2001 and the Financial Transaction Reports Act 1988 already allow Royal Commissions, ASIC and AUSTRAC to provide specified information to certain persons and agencies. However, their ability to provide information to one another is limited.

The Prime Minister recently announced a Royal Commission into the failure of the HIH Insurance Group. The terms of reference for the Royal Commission require the Commissioner to inquire into the reasons for and circumstances surrounding the failure of HIH. The terms of reference also require the Commission to cooperate with ASIC's ongoing investigation into whether any criminal or civil proceedings should be brought as a result of the failure.

The Prime Minister also recently announced a Royal Commission into the building and construction industry. The terms of reference for that Royal Commission require its Commissioner, broadly speaking, to inquire into certain unlawful or otherwise inappropriate practices and conduct in the building and construction industry.

These Royal Commissions may, in the course of their inquiries, obtain information regarding possible contraventions of the law which may attract criminal, civil or administrative penalties. In the case of the Royal Commission into the failure of the HIH Insurance Group, such information will potentially assist ASIC's ongoing investigation into HIH. The Royal Commission into the building and construction industry and Royal Commissions established in future years should also be able to provide information about such contraventions of the law to the persons and agencies responsible for the administration and enforcement of the law.

ASIC and AUSTRAC, in turn, may hold information which could assist these Royal Commissions to comply with their terms of reference. Royal Commissions established in future years may also benefit from access to such information.

The Bill will therefore amend:

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the Royal Commissions Act to allow Royal Commissions to communicate information and furnish evidence that relates to or may relate to a contravention of the law to the responsible persons and authorities, regardless of whether the contravention may give rise to a criminal, civil or administrative penalty;

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the Royal Commissions Act to allow Royal Commissions to communicate such information to the Attorney-General of the Australian Capital Territory, along with other Attorneys-General around Australia;

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the Australian Securities and Investments Commission Act to allow ASIC to disclose information to Royal Commissions voluntarily; and

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the Financial Transaction Reports Act to allow Royal Commissions which are inquiring into whether unlawful conduct may have occurred, to access financial transaction reports information.