Australian Bar Association pays tribute to lawyers who defended Chan & Sukumaran

From the New South Wales Bar Association's InBrief:

Australian Bar Association President Fiona McLeod SC today endorsed the remarks of Victorian Bar President Jim Peters QC and New South Wales Bar Association President Jane Needham SC in paying tribute to the team of Indonesian and Australian lawyers who had worked so tirelessly, pro bono, over many years to prevent the execution of Andrew Chan and Myuran Sukumaran.

Dr. Christopher Ward was amongst those honoured for their efforts.

Robert Angyal SC appointed to Mining & Petroleum Disputes Arbitration Panel

The members of 6 St James' Hall Chambers congratulate our colleague Robert Angyal SC on his recent appointment by the NSW Minister for Resources and Energy to the Arbitration Panel constituted under the Mining Act 1992 and Petroleum (Onshore) Act 1991 to conciliate and arbitrate disputes about access to land between landowners and holders of mineral or petroleum exploration licenses or assessment leases. 

Egyptian Court of Cassation Orders Retrial for Journalist Peter Greste

On 1 January 2015, Egypt's highest judicial body overturned the conviction, and ordered a retrial, of Australian journalist, Peter Greste. Mr Greste, along with two other Al Jazeera journalists, Mohamed Fadel Fahmy and Baher Mohammad, had been convicted of news reporting "spreading lies in an attempt to aid a terrorist group" (the banned Muslim Brotherhood) in June 2014. Mr Greste was sentenced to 7 years incarceration.

Since November 2014, 6 St James' Hall Chambers' international law specialists Dr Christopher Ward and Dr Stephen Tully, instructed by Chris Flynn of Gilbert & Tobin, have been acting for Mr Greste pro bono in relation to the appeal and associated international law issues.

Peter Greste Egyptian Deportation Application Lodged

Since November 2014, 6 St James' Hall Chambers' international law specialists Dr Christopher Ward and Dr Stephen Tully have been acting pro bono for jailed Al Jazeera journalist Peter Greste. Instructed by Chris Flynn of Gilbert & Tobin Lawyers, they acted on the successful appeal to the Court of Cassation and associated issues (see our earlier blog).

This evening, Mr Greste's Australian lawyers announced that a formal application has now been lodged with the Egyptian Government for Mr Greste's deportation. In November 2014, Egypt issued a new decree granting the President Abdel Fattah al-Sissi the power to deport foreign defendants convicted or accused of crimes. 

Read online the transcript of Mr Flynn's interview with ABC Radio's PM programme.

Financial disclosure: a challenge for foreign investors in Australia

Foreign interests wishing to carry on business in Australia may do through a number of means,  but primarily will choose among:

•    a foreign corporation, operating alone or as a joint venture partnership;

•    controlling a subsidiary incorporated in Australia as a domestic trading or financial corporation;

•    establishing or acquiring a public company on a listed market such as the Australian Stock Exchange.

Different Australian statutory obligations will apply to each scenario, but consistent amongst all of them will be an obligation in most circumstances to disclose the financial standing of the Australian  based company on a relatively frequent basis.

Foreign companies wishing to carry on business in Australia do need to register under Part 5B.2 of the Corporations Act.

If a foreign corporation is a disclosing entity, public company, large proprietary company or registered scheme, it must prepare a financial report and directors’ report each financial year. [2] The annual report must be lodged with ASIC within three months after the end of the financial year.[3] The financial report must comply with accounting standards[4] and give a true and fair view of the company’s financial position and performance.[5] Listed companies must also produce an audited financial report and a directors’ report on a half-yearly basis,[6] to be lodged with ASIC within 75 days after the end of the half-year.[7]

The Australian Stock Exchange (ASX) Listing Rules provide for further financial disclosure. The Rules include the obligation to keep shareholders fully informed of any price-sensitive information of which the company becomes aware,[8] (similar to the notice on significant matters rule in China and Hong Kong,[9]) and the obligation to disclose necessary information to the ASX to correct a false market in its securities.[10]

In response to a failure to comply, ASIC may initiate civil proceedings or take other enforcement steps,[11] or criminal liability may ensue.[12]

Listed entities, directors and those who advise them obtained much clearer and more detailed information to help them understand and comply with their continuous disclosure obligations with the release of the ASX’s final revised Guidance Note 8 in May 2013.[13]

Listed companies are also subject to period disclosure obligations: they must report their full-year results to the ASX within two months after the end of the accounting period,[14] and similarly must provide their half-year results within two months after the end of the period.[15]

While the ASX has used its power of suspension and delisting in relation to smaller listed companies failing to lodge half-year and annual reports, the ASX and ASIC usually prefer settlement over litigation.[16] ASIC has previously prosecuted listed companies and their directors for failure to comply with statutory annual reporting provisions.

Listed companies are also subject to some extent to the ASX’s Corporate Governance Principles.[17] All recent Chinese listings have – at least publicly – recognised the importance of good corporate governance and establishing the accountability of the Board and management, and have established a corporate governance structure framework that is consistent with the ASX Corporate Governance Principles and Recommendations.

10 January 2014

 

Dominique Hogan-Doran is in Hong Kong this week as part of International Financial Week, and will present at the Australasian Financial Forum on the challenges for Chinese investment in Australia.

This blog does not constitute personal legal advice. 

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Endnotes

[1] Corporations Act 2001 (Cth), s 601CK.

[2] Corporations Act 2001 (Cth), s 292(1).

[3] Corporations Act 2001 (Cth), s 319.

[4] Corporations Act 2001 (Cth), s 296.

[5] Corporations Act 2001 (Cth), s 297.

[6] Corporations Act 2001 (Cth), ss 302-306.

[7] Corporations Act 2001 (Cth), s 320.

[8] Australian Securities Exchange Listing Rule 3.1.

[9] Securities and Futures (Amendment) Ordinance 2012 (HK), s 307B.

[10] Australian Securities Exchange Listing Rule 3.1B.  See Listing Rules 3.2-3.19 for the other continuous disclosure rules. See also Corporations Act 2001 (Cth) Ch 6CA.

[11] Corporations Act 2001 (Cth), s 1317E(ja). See also Gill North, Company Disclosure in Australia (Thomson Reuters, Sydney, 2013), 72.

[12] Corporations Act 2001 (Cth), ss 674, 678 and 1311(1).

[13] As to the feedback received, see http://www.asx.com.au/documents/about/GN8_Consultation_Response.pdf

[14] Australian Securities Exchange Listing Rule 4.3B.

[15] Mining exploration entities are excepted. Australian Securities Exchange Listing Rule 4.2.

[16] Gill North, Company Disclosure in Australia (Thomson Reuters, Sydney, 2013), 57.

[17] Listed corporations must include in their annual report a statement disclosing the extent to which it has followed the recommendations and give reasons for those it has not followed:ASX LR 4.10.3.

Dominique Hogan-Doran, "Looking forward to Australia-China Free Trade?"

Australia has shown great enthusiasm for entering into free trade agreements and strengthening economic ties. Australia currently has seven FTAs currently in force,[1] and is engaged in nine FTA negotiations.[2] 

Australia’s Foreign Minister Julie Bishop recently expressed hope that a Australia/China FTA could be concluded in the near future.[4]  Negotiations have proved particularly complex and lengthy since Australia and China first agreed to negotiate a bilateral FTA in April 2005.[5]

Australia’s largest FTA, the ASEAN-Australia New Zealand FTA (AANZAFTA)[3] was concluded on 27 February 2009, and in December 2013 Australia reached a free trade agreement with Korea (KAFTA). Interestingly, the KAFTA delivers firsts in the treatment of law firms and television industries. It will permit Australian law firms to set up South Korean offices to access the legal consulting services market and allow “new commercial opportunities” for film and television under an Audiovisual Co-production Agreement.

China is reported to be pushing for fewer restrictions on Chinese investment in Australia, on par with the treatment Australia grants to the USA and NZ.[6] Under Australia's foreign investment screening process, US and NZ firms can invest in businesses and developed commercial real estate up to a value of $1bn before being required to notify the Foreign Investment Review Board (FIRB).

However, in certain sectors, there is public antipathy towards foreign investment (particularly from China) and pushes for Australia to tighten scrutiny over investment in agricultural and rural land, where foreign investment is often opposed as leading to a loss of national control [7] or being harmful to food security. [8] But recent research by the Rural Industries Research and Development Corporation revealed that foreign investment in Australian agriculture is relatively low, and has a net positive impact on food security, although it remains unclear whether that will sufficiently allay such community concerns. (For further analysis of Australia's current foreign investment screening rules, see my earlier blog).

The recent introduction by an individual Senate cross-bencher of draft legislation raising labour force issues is thought by some to risk slowing negotiations yet again.  Named the Fair Trade (Workers' Rights) Bill 2013, if enacted it would prohibit Australia from concluding an agreement with any country which does not meet minimum standards of workers’ rights. (Senator Madigan, who introduced the bill, is one of seven crossbenchers who will hold the balance of power in the Australian Senate from July 2014).  With opposition from the Business Council of Australia (but support from the Australian Council of Trade Unions), it seems unlikely to win Government support. The draft bill has been referred to committee for investigation and report, so watch this space.

Before passing from this topic, it is worth noting the limits of the FTA success story in New Zealand- which has been enjoyed largely by the meat, timber and dairy sectors. New Zealand businesses have enjoyed windfall profits in the five years since the FTA was signed. According to NZ PM John Key, the country has done more business in five years than in every year prior to that combined. However, the trade relationship has a narrow base, with most gains largely felt by dairy giant Fonterra - up to half of all dairy products coming into China are from New Zealand and 86 percent of milk powder comes from there. Extending the trade relationship to small and medium-sized enterprise level is something that reportedly needs real work.

Shanghai Pilot Free Trade Zone

In the meantime, the 3 month old Shanghai Pilot Free Trade Zone may offer an early foothold for Australian companies seeking genuine access to Chinese markets.

Operators in the FTZ will have the ability to access:

•    liberalised interest rates,

•    RMB convertibility, and

•    more liberal foreign investment criteria.

The Shanghai Pilot FTZ will likely provide an important glimpse into the possible future direction of PRC-wide investment rules. Potential reform areas include:

•    shifting the focus from pre-approval to in-process and post-supervision,

•    establishing united, concentrated and comprehensive market supervision and law enforcement systems, and

•    extending the field of foreign investment by establishing a negative list management system (granting national treatment to the foreign investments not falling under the negative list).

Outside the FTZ in China, generally speaking enterprises must obtain pre-approval and permission and then apply for a business license. The adoption of a "one stop shop" approval system within the FTZ system will apply a registration system of "license first, permit second" in the FTZ.

The Shanghai FTZ, which covers an area of nearly 29 sq km on the eastern outskirts of Shanghai, will permit primarily services based industries (mainly financial, shipping, business, professional, cultural and social). The areas are based on the Special Administrative Measures on the Entry of Foreign Investment in China (Shanghai) Pilot Free Trade Zone (Negative List) issued by the Shanghai Municipal Government, which is composed of categories according to the National Economic Industrial Classification and Codes (2011), containing 18 industrial sectors. Only 2 sectors - S (public administration, social security and social organisations) and T (international organisations) are not subject to the negative list.

Since the announcement in April last year of the direct convertibility of the Australian Dollar, trading in the Shanghai FTZ will be particularly attractive for Australian operators. Australia New Zealand Banking Group Ltd (ANZ) has already announced preparatory approval from the China Banking Regulatory Commission (CBRC) for its establishment of a sub-branch. [9]  Other Australian banks are following ANZ's lead. Foreign companies in the FTZ will also be empowered to issue yuan-denominated bonds for repatriation, making it easier for them to raise funds, such as through derivatives trading or private share placements.

9 January 2014

Dominique Hogan-Doran is in Hong Kong this week as part of International Financial Week and will present at the Australasian Financial Forum on the challenges for Chinese investment in Australia.

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Endnotes

[1] With New Zealand, Singapore, Thailand, US, Chile, ASEAN and Malaysia.

[2] Bilateral negotiations are occurring with Korea (recently concluded, but yet to enter into force), China, Japan, India, Indonesia. Plurilateral negotiations are occurring to conclude the Trans-Pacific Partnership Agreement (TPP), the Gulf Cooperation Council (GCC), the Pacific Trade and Economic Agreement (PACER Plus), and the Regional Comprehensive Economic Partnership Agreement (RCEP). See DFAT, Australia’s Trade Agreements, available at http://www.dfat.gov.au/fta/.

[3] Between Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Phillipines, Singapore, Thailand, Vietnam, New Zealand and Australia.

[4] ‘Australia close to FTA with China: Bishop’, The Australian, 8 December 2013, available at http://www.theaustralian.com.au/news/latest-news/australia-close-to-fta-with-china-bishop/story-fn3dxix6-1226777940039.

[5] Department of Foreign Affairs and Trade, Australia-China Free Trade Agreement negotiations, available at http://www.dfat.gov.au/fta/acfta/.

[6] Toh Han Shih, ‘China to push Australia on “fairer” FTA terms’ (5 December 2013) South China Morning Post, available at http://www.scmp.com/business/economy/article/1373497/china-push-australia-fairer-fta-terms.

[7] See e.g. http://australianpolity.com/feature/guarding-food-security-in-the-national-interest

[8] See eg http://www.greens.org.au/land-ownership

[9] http://www.reuters.com/article/2013/11/17/us-china-economy-freetradezone-anz-idUSBRE9AG01N20131117

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