This is a service specifically targeted at the needs of busy non-executive Directors. We aim to give you a “heads up” on the things that matter for NEDs in the week ahead – all in two minutes or less.
In this edition, we consider ASIC’s corporate plan for 2021 – 2026 and the FRAA’s effectiveness and capability review of ASIC which aligns largely with the focus areas identified in ASIC’s corporate plan. We also consider the proposed increases to penalties for anti-competitive conduct, and the Federal Court proceedings commenced by the Tiwi traditional landowners against Santos in relation to its Barossa project.
In Over the Horizon, we consider the upcoming jobs and skills summit which seeks to gain support amongst various industries and unions for increased skilled worker migration.
GOVERNANCE & REGULATION
ASIC’s corporate plan for 2021 – 2026. ASIC has released its corporate plan which sets out its strategy and priorities over the next four years. The strategy is largely informed by key trends and reforms impacting upon the financial system, which include digitally enabled misconduct, emerging technologies, climate risks and an ageing population. ASIC has identified four external strategic priorities: (1) product design and distribution, (2) sustainable finance, (3) retirement decision making, and (4) technology risks. ASIC noted that ‘supporting these priorities are core strategic projects, focused on sustainable finance practices, crypto-assets, scams, cyber and operational resilience, breach reporting, design and distribution obligations and, subject to the passage of legislation, the Financial Accountability Regime’. ASIC Chair Joe Longo noted that ASIC will take strong and targeted enforcement action to protect consumers and investors and to maintain trust and integrity in the financial system. ASIC has also developed its own four internal priorities which are: (1) digital technology, (2) data and analytics, (3) people and resourcing, and (4) modernising business registers. Mr Longo has emphasised that while the plan highlights ASIC’s intentions over the longer term, ASIC remains cognisant of the fact that circumstances can change rapidly and ‘will continue to make rapid, strategic decisions to adapt where needed’. See media release.
FRAA’s effectiveness and capability review of ASIC. The Financial Regulator Assessment Authority (FRAA) conducted a review of ASIC looking at strategic prioritisation, planning and decision-making, surveillance and licensing, as well as ASIC’s use of data and technology in these areas. The FRAA concluded that ASIC is effective and capable in the areas reviewed but made four recommendations in its report. The recommendations focus on: (1) ASIC’s use of data and technology, (2) strengthening engagement with stakeholders, (3) enhancement of its ability to measure effectiveness and capability, and (4) continuing to broaden its mix of skill sets. The report acknowledges the fact that ASIC already has initiatives underway which align with the recommendations. ASIC Chair Joe Longo said he welcomed the recommendations and noted the alignment with his priorities set out in ASIC’s corporate plan (as set out above). The FRAA is mandated to review and report on the effectiveness and capability of ASIC every two years. See media release.
Proposed legislation to increase penalties for anti-competitive conduct. An exposure draft of the Treasury Laws Amendment (Competition and Consumer Reforms No. 1) Bill 2022 reveals plans to significantly increase penalties for anti-competitive behaviour. The proposed legislation would have the prospective effect of increasing the penalty for entities engaging in anti-competitive conduct from $10 million (which it has been for 30 years) to $50 million, and the penalty for individuals from $500,000 to $2.5 million. The dramatic increase demonstrates the Federal Government’s seriousness on delivering its election promise to protect consumers and ease costs of living. Market competition is integral to keeping the costs of living down as rival companies compete to have attractive prices and the proposed legislation could aid with the prevention of anti-competitive behaviour. The Treasury Consultation on the exposure draft closed last week. See media release.
Federal Court travels to the Tiwi Islands for on-Country evidence in relation to proceedings concerning Santos’ Barossa Project. In June this year, Federal Court proceedings were commenced against Santos by Tiwi traditional landowners in relation to the Barossa oil and gas project. The Barossa project has been labelled one of the biggest projects in the Australian oil and gas sector over the last decade and is based off the coast of Darwin. The project received government support. However, the Tiwi traditional landowners commenced proceedings alleging that they were not properly consulted in relation to the project and its potential impacts upon the marine environment. Last week, Justice Bromberg granted an application for the Federal Court to hear evidence on Country, despite objections from Santos. Elders voiced their fears about risks from the drilling and pipeline to the natural environment and shared the importance of their song lines including the turtle dreaming belonging and the sea serpent Ampitji who would be angered by damage to the sea country. The hearing continued in Darwin for the remainder of the week. Justice Bromberg will soon reach a decision.
OVER THE HORIZON
Jobs and skills summit: the first step in addressing Australia’s labour shortage? This week the Federal Government is hosting a jobs and skills summit to seek support from unions and businesses to increase the cap of skilled migrants permitted to reside in Australia. Australia is currently facing a 48-year low unemployment rate, with more jobs vacant than unemployed people available to fill them. Increasing the number of skilled migrants to Australia could be the solution to the problem. Analysts from the Grattan Institute suggest that increasing the cap by 40,000 migrants could improve Federal and State budgets by $38 billion over the next decade. If agreement can be reached on raising the current 160,000 migrant cap, the change can be expected to be implemented during the Federal budget sitting in October.