Director’s liability reforms introduced into Parliament

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Director’s liability reforms introduced into Parliament

A Bill amending a significant number of provisions across a range of Commonwealth legislation that impose personal criminal liability for corporate fault, other than for laws relating to workplace health and safety and environmental protection (which have been subject to separate reform processes), has been introduced into Federal Parliament.

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A Bill amending a significant number of provisions across a range of Commonwealth legislation that impose personal criminal liability for corporate fault, other than for laws relating to workplace health and safety and environmental protection (which have been subject to separate reform processes), has been introduced into Federal Parliament.

Australia has moved a step closer towards a seamless national economy with the introduction of the Personal Liability for Corporate Fault Reform Bill 2012 according to Parliamentary Secretary to the Treasurer, the Hon Bernie Ripoll MP.

Ripoll noted that the Bill represents the Gillard Government’s commitment to implement the Directors’ Liability reform initiative as part of the Council of Australian Governments’ (COAG) National Partnership Agreement to Deliver a Seamless National Economy.

Nationally consistent approach
 
The reform commits all jurisdictions to establishing a nationally consistent and principles-based approach to the imposition of personal criminal liability on directors for corporate fault.

Ripoll said that this was an important deregulation initiative aimed at encouraging wealth and job creation in Australia by removing unnecessary compliance burdens from company directors and corporate officers, where appropriate.

The Bill amends a significant number of provisions across a range of Commonwealth legislation that impose personal criminal liability for corporate fault, other than for laws relating to workplace health and safety and environmental protection, which have been subject to separate reform processes.

It will ensure that a person is only made criminally liable for the fault of a corporation where it is fair and reasonable in all circumstances to do so.

Personal penalty
 
As part of the COAG reform, Commonwealth legislation has been assessed against principles and guidelines endorsed by COAG for the imposition of personal liability. The Bill amends Commonwealth legislation to align it with these principles and guidelines.

States and territories have similarly committed to implementation plans to introduce proposed amendments to their legislation before the end of 2012.

When implemented by all jurisdictions, this reform will enhance national consistency in the imposition of personal criminal liability for corporate fault, and reduce unnecessary compliance burdens on business.

The introduction of the Bill follows three tranches of public consultation of the proposed amendments to Commonwealth legislation over the course of 2012.
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