Overview of governance arrangements

Statutory basis

2.15 The ALRC is, until 1 July 2011, a Commonwealth Authority under the Commonwealth Authorities and Companies Act 1997 (Cth) (CAC Act).^[17] As a separate legal entity from the Commonwealth, with the power to hold money on its own account, the ALRC is subject to the corporate governance, financial management and reporting requirements of the CAC Act, in addition to the ALRC Act.

2.16 Two major reforms to the ALRC’s governance arrangements will commence on 1 July 2011, following recent amendments to the ALRC Act.^[18] First, consistent with the recommendations of the 2003 Review of the Corporate Governance of Statutory Authorities and Office Holders, conducted by John Uhrig AO(the Uhrig Review),^[19]and the Australian Government policy on governance arrangements for Australian Government bodies,^[20] the ALRC will become a Prescribed Agency under the Financial Management and Accountability Act 1997 (Cth) (FMA Act), and a Statutory Agency for the purposes of the Public Service Act 1999 (Cth) (PS Act). Broadly, this means that the ALRC will be financially part of the Commonwealth as a single legal entity. The ALRC will move to an executive management model, by replacing its existing board of management with a Chief Executive Officer (the President), supported by a management advisory committee appointed by the Attorney-General. The staff of the ALRC will be employed under the PS Act.

2.17 Secondly, the 2010 amendments adjust the ALRC’s membership structure and appointments process to reflect the Australian Government’s intention to

introduce a more flexible membership structure for the Commission, so that the composition of the Commission can be adjusted based on the subject matter of the inquiries referred to it. The … amendments would facilitate the short-term appointment of members with expertise in particular areas of inquiry, rather than appointing exclusively legal experts or generalists … This will provide greater workability in the Commission’s membership, enhance the timeliness and workability of the appointment process and allow for better use of appointments for the length of specific references.^[21]

2.18 The amending legislation received assent on 17 December 2010, and the amendments will commence on 1 July 2011.^[22] A comparative summary of the current and new statutory governance frameworks follows.

Pre-July 2011 statutory governance framework

Statutory membership

2.19 Under the ALRC Act prior to the 2010 amendments, the ALRC’s statutory membership comprises a President, Deputy President and at least four other members (known as Commissioners).^[23] There is no upper limit for the number of Commissioners appointed to the ALRC. All members are currently appointed by the Governor-General, and must meet certain appointment criteria, namely:

• holding the office of a judge or justice of a federal court or a state or territory supreme court; or

• admission for at least five years as a legal practitioner of the High Court, or of a state or territory supreme court; or

• a graduate in law of a university, with experience as a member of the academic staff of a tertiary educational institution; or

• in the opinion of the Governor-General, suitable for appointment because of the person’s special qualifications, training or experience.^[24]

2.20 Members may be appointed for a term not exceeding seven years, and are eligible for re-appointment.^[25] The President and Deputy President must be full-time appointments, and Commissioners may be appointed on a full-time or part-time basis.^[26]

President

2.21 The role of the ALRC President is to take overall responsibility for the ALRC’s governance and for the strategic development of the organisation, to facilitate the participation of part-time Commissioners, and to assist the full-time Commissioners with high level policy formulation and analysis involved in a particular inquiry. The ultimate responsibility for ALRC reports and law reform recommendations is with the President. The President is the ALRC’s representative to the Parliament and to the Government, and also the key spokesperson regarding the ALRC’s work to the community, the legal profession, to industry stakeholders and to the media.

2.22 Currently, the President and sole full-time statutory member is Professor Rosalind Croucher, who was appointed on 14 December 2009 for a five-year term to 13 December 2014.

Role of Commissioners

2.23 In practice, full-time and part-time Commissioners play distinct but complementary roles.

2.24 Full-time Commissioners: While the internal structure of the ALRC has varied, the standing practice is that references are managed by individual, full-time Commissioners as Commissioners in charge of particular inquiries. In this sense, there are parallels between Commissioners’ strategic leadership and management roles and those of Senior Executive Service officers within the Australian Public Service. In addition, full-time Commissioners are generally eminent or very senior members of the legal profession, whose standing and connections can facilitate access to a wide range of people and information.

2.25 The role of the full-time Commissioner, in consultation with the President, is to provide leadership, direction and day-to-day management to a legal team for a particular inquiry and to lead the formulation of the final recommendations made in the inquiry. Full-time Commissioners take responsibility for scoping the inquiry from the Terms of Reference; identifying the policy framework; using their experience to assist the President to identify and establish an Advisory Committee with high level stakeholders and assisting the President to conduct Advisory Committee meetings; identifying stakeholders and leading consultations; providing supervision to legal officers, overseeing their research and reviewing all written work; leading the policy discussions and formulation of proposals and recommendations for reform; and taking overall responsibility for the timely completion of all consultation documents and reports. The Commissioner will also contribute significantly to any publication and share presentation and media engagements with the President.

2.26 Full-time Commissioners makes a key contribution to an ALRC inquiry, most importantly bringing their high level knowledge and experience to the law reform process, adding credibility to the ALRC’s processes by their seniority, and taking inquiry management responsibility to ensure the inquiry is completed to schedule, and ensuring the final report is of high quality, well researched and well documented. Full-time Commissioners also contribute through the ability to leverage considerable influence and contributions in an inquiry based upon their personal standing, expertise and networks. Part-time Commissioners also contribute in this way.

2.27 Full-time members (the President, Deputy President and Commissioners) are also responsible for the management and administration of the ALRC, in accordance with the board of management structure set out in the ALRC Act, which is operational until 1 July 2011 and discussed further below.

2.28 Part-time Commissioners: The description of ‘part-time’ for these Commissioners is somewhat of a misnomer. The principal role of a part-time Commissioner is an advisory one for ALRC inquiries. These members assist the ALRC in identifying the key issues involved in a particular inquiry, and provide advice in the research and consultation effort, and in the process of formulating final recommendations. They are generally appointed on the basis of their recognised eminence and expertise in their respective fields. In addition to their direct contributions, the standing and connections of part-time Commissioners can assist the ALRC identify and obtain access to persons and information relevant to its inquiries. The status of such persons as part-time Commissioners also contributes to the quality of public participation in inquiries—and ultimately enhances public confidence in the calibre of the ALRC’s work—by promoting impartiality, independence and respect.

2.29 However, part-time Commissioners do not have financial or administrative responsibilities, nor do they assume responsibility for direction of a reference or the day-to-day management of inquiries. The time that these members can devote to inquiry work is very limited, constrained by their employment on a full-time basis elsewhere—for example, as judges, academics and legal practitioners.

2.30 Part-time Commissioners may be appointed for a period of years or specifically for an inquiry.

2.31 Standing part-time Commissioners, as distinct from inquiry-specific part-time Commissioners, form part of any Advisory Committee established for an inquiry and provide input with the Committee, in addition to their formal administrative responsibility as a statutory office-holder of the Commission.

2.32 Inquiry-specific Commissioners may take a more active role, drawing upon inquiry-relevant expertise to assist, eg, participating more actively in consultations, in proposal workshops and in inquiry team meetings as their schedule will allow.

2.33 There are currently four part-time Commissioners, all of whom are judges of the Federal Court of Australia. These members are:

• The Hon Justice Susan Kenny (since 14 May 2003, term of current appointment 9 July 2009 to 8 July 2012);

• The Hon Justice Berna Collier (since 2 October 2007, term of current appointment 27 October 2010 to October 2013);

• The Hon Justice Arthur Emmett (from 27 October 2010 to 30 April 2011); and

• The Hon Justice Bruce Lander (from 27 October 2010 to 30 April 2011).

2.34 The Hon Justice Emmett and the Hon Justice Lander have been appointed specifically to contribute to the ALRC’s current inquiry into improving the discovery process in civil litigation in federal courts. Their appointments are consistent with the Government’s stated intention to make greater use of short-term, reference-specific appointments of eminent persons with expertise in specific fields of inquiry. The appointment of Victorian Magistrate Anne Goldsbrough to the ALRC’s recently completed inquiry into family violence laws is another instance of this approach.

2.35 The office of the Deputy President has been vacant for much of the past 10 years, and was last occupied from December 2005 to September 2006. While, in the ALRC’s experience, a complement of full-time members is integral to its capacity to discharge its statutory mandate, the ALRC Act provides that vacancies in membership do not invalidate or otherwise affect the performance of its functions or exercises of its powers.^[27]

Board of Management

2.36 The ALRC Act further provides for a board of management governance model, operational until 1 July 2011. The function of the board is to ‘manage the Commission and, in particular, ensure that it performs its functions efficiently and economically’.^[28] The board’s membership is prescribed as the President, Deputy President and full-time members.^[29] The current board consists solely of Professor Croucher, as the only full-time member. The President is the Chief Executive Officer of the ALRC and is, under the board, responsible for the management of the ALRC. The President’s powers are delegable, wholly or partially, to members and employees of the ALRC.^[30] The ALRC has established an audit committee, in accordance with CAC Act requirements, as a sub-committee of the Board of Management.^[31]

2.37 The ALRC Act also prescribes an operational framework for meetings and proceedings of the ALRC in the performance of its functions. In addition to meetings of the full Commission, the Act permits, but does not mandate, the establishment of Divisions for the purposes of individual references—for example, as structures for the making of policy decisions about recommendations. Divisions must comprise at least three members and are subject to formal quorum requirements and deadlock resolution mechanisms for the determination of questions arising in the course of inquiries.^[32] In practice, however, members assume collegial responsibility for the findings and recommendations in all references.

2.38 The distinction between the abovementioned structures may be summarised as follows. The Board of Management is the ALRC’s governance body with responsibility of general oversight of organisational operations, including budget and policies. The audit committee is a sub-committee of the Board of Management. Full Commission meetings, generally convened at least twice per year, provide an opportunity to discuss the progress of current inquiries, the ALRC’s financial performance and other matters of interest to Commissioners. Divisions, where constituted, have responsibility for legal policy decisions relating to specific references.

Appointment of staff

2.39 The ALRC has power to appoint staff under s 43 of the ALRC Act. Since 1996, all staff have been appointed on a fixed-term, renewable basis, in accordance with the ALRC’s certified agreement. Staffing is discussed further below.

2.40 The ALRC Act further permits the engagement of persons with ‘suitable qualifications and experience’ as consultants, on such terms and conditions as determined by the ALRC and approved by the board.^[33] While there are some similarities between the role of external consultants and part-time Commissioners, in terms of the expertise such persons contribute, each has quite discrete and complementary functions. For example, the scope of a consultant’s brief may be limited to specific aspects of references, whereas part-time Commissioners’ involvement is more general. The status of part-time Commissioners, as statutory appointees, encourages impartiality, independence and respect. Consultants, on the other hand, may have well-defined views and more freedom to express their personal views for consideration by the ALRC, without being constrained by the need to maintain independence or be part of the collective decision-making process. In addition, consultants may be engaged on a full-time basis, whereas part-time Commissioners generally participate around existing full-time employment commitments.

Directions

2.41 In addition to referring matters to the ALRC, the Attorney-General is expressly empowered by the ALRC Act and the CAC Act to issue certain directions, including:

• alterations to the terms of reference for a particular Inquiry;^[34]

• directions about the order in which it is to deal with multiple references;^[35]

• directions to make an interim report on an reference;^[36] and

• directions to comply with a general policy of the Australian Government.^[37]

Post-July 2011 statutory governance framework

Summary

2.42 The Financial Framework Legislation Amendment Act 2010 (Cth) made several significant changes to the ALRC’s statutory governance framework, to achieve the dual purpose of a transition to regulation under the FMA Act and PS Act (using an executive management structure), and enhancing flexibility of membership structure for the purposes of specific inquiries.^[38]

2.43 Key amendments directed towards an executive management structure under the FMA Act include:

• Repealing provisions establishing the ALRC as a separate legal entity to the Commonwealth and thus subject to the CAC Act.^[39]

• Replacing the existing Board of Management with the President as Chief Executive Officer.^[40]

• Expressly empowering the Attorney-General to establish, appoint members to, and dissolve a management advisory committee to advise the President on issues relevant to the proper discharge of the ALRC’s function.^[41] The Explanatory Memorandum states:

The management advisory committee will not possess executive powers or decision-making authority and may not compromise the intellectual independence or impartiality of the Law Reform Commission. The intent of this provision is that the management advisory committee will provide support to the President on the management of the Law Reform Commission in a non-binding manner, within a relationship where the committee is subordinate to the President. The Law Reform Commission will continue to report to the Attorney-General on the results of any reviews and to include in those reports any recommendations it may wish to make (as provided for in section 21). Additionally, the President of the Law Reform Commission may decide matters about the management advisory committee that are not provided for in the ALRC Act, such as the timing and conduct of meetings.^[42]

• Formalising the current practice of at least two Full Commission meetings per financial year, and streamlining quorum requirements in respect of such meetings.^[43]

• Amending provisions pertaining to members’ disclosure of certain interests in matters being considered by the ALRC, largely for consistency with FMA Act terminology.^[44]

• Abolishing Divisions of the ALRC for the purposes of specific references.^[45]

• Providing for the engagement of ALRC staff under the PS Act, and deeming the President and the staff as together constituting a statutory agency for the purposes of the PS Act, and that the President is the head of the agency under the latter Act.^[46]

• Streamlining arrangements for the engagement of external consultants, with the effect that the President may engage consultants with suitable qualifications and experience, under general contract law.^[47]

• Repealing provisions relating to the ALRC’s financial management, which will be subject to the FMA Act, and creating an ALRC Special Account for the purposes of the FMA Act.^[48]

Membership structure

2.44 Key amendments directed towards membership structure include:

• removal of the office of Deputy President, and providing that the ALRC consists of the President and not more than six other members.^[49]

• empowering the Attorney-General to appoint part-time members as he or she considers necessary from time-to-time, while all full-time appointments continue to be made by the Governor-General.^[50]

• amending appointment criteria for both full and part-time members—in particular to include the holder of a ‘judicial office’, which expressly includes magistrates and judges of state and territory courts, as well as federal courts.^[51]

• amending the term of appointments to promote consistency with Commonwealth guidelines for the merit-based selection of Australian Public Service agency heads and statutory office holders. Members can hold office for a minimum term of six months, and a maximum term of five years, and are eligible for re-appointment.^[52]

Performance of functions

2.45 Other key amendments, directed towards the ALRC’s performance of its functions, include:

• The repeal of the express reference to the International Covenant on Civil and Political Rights (ICCPR)as a matter to which the ALRC must have regard in performing its functions under s 24. The amendment reflects the current obligation that the ALRC must consider all of Australia’s relevant international obligations relevant to the terms of reference, including the ICCPR.^[53]

• Requiring the ALRC to have regard to the effect of recommendations on persons and businesses in general (including economic effects), in addition to the effect of recommendations on the costs of gaining access to and dispensing justice.^[54]

• Enabling the Attorney-General to give written directions to the President with respect to the administration of the ALRC.^[55] The Explanatory Memorandum provides that the amendment is designed to ensure that the ALRC’s administration is consistent with government policy. It states that the provision is consistent with FMA Act requirements and is limited to administrative matters.^[56]