[BIL026-B.HAL]

House of Assembly—No. 3

[As laid on the table and read a first time, 8 May 2002]

South Australia

[Prepared by the Parliamentary Counsel]

STATUTES AMENDMENT (HONESTY AND ACCOUNTABILITY IN GOVERNMENT) BILL 2002

A Bill For

An Act to amend the Criminal Law Consolidation Act 1935, the Public Corporations Act 1993 and the Public Sector Management Act 1995.

[OPC-108]

SUMMARY OF PROVISIONS

PART 1

PRELIMINARY

1.Short title

2.Commencement

3.Interpretation

PART 2

AMENDMENT OF CRIMINAL LAW CONSOLIDATION ACT 1935

4.Amendment of s. 237—Definitions

5.Amendment of s. 251—Abuse of public office

PART 3

AMENDMENT OF PUBLIC CORPORATIONS ACT 1993

6.Amendment of s. 3—Interpretation

7.Amendment of s. 5—Application of Act

8.Amendment of s. 16—Director's duty to act honestly

9.Amendment of s. 18—Directors' and associates' interests in corporation or subsidiary

10.Amendment of s. 19—Conflict of interest

11.Insertion of ss. 36A and 36B

36A.Duty of employees to act honestly

36B.Duty of senior executives with respect to conflict of interest

12.Amendment of s. 38—Executives' and associates' interests in corporation or subsidiary

13.Insertion of s. 38A

38A.Duty of employees with respect to conflict of interest

14.Amendment of Sched.—Provisions applicable to subsidiaries

PART 4

AMENDMENT OF PUBLIC SECTOR MANAGEMENT ACT 1995

15.Amendment of s. 3

16.Substitution of heading to Part 2

PART 2

GENERAL PUBLIC SECTOR AIMS, STANDARDS AND DUTIES

DIVISION 1—AIMS AND STANDARDS

17.Amendment of s. 6—Employee conduct standards

18.Insertion of Divisions

DIVISION 2—DUTY OF AGENCIES TO REPORT

6A.Duty of agencies to report

6B.Contents of report

DIVISION 3—DUTIES OF CORPORATE AGENCY MEMBERS

6C.Application of Division

6D.Duty of corporate agency members to act honestly

6E.Duty of corporate agency members not to be involved in unauthorised transactions with agency or subsidiary

6F.Duty of corporate agency members not to have unauthorised interest in agency or subsidiary

6G.Duty of corporate agency members with respect to conflict of interest

6H.Removal of corporate agency members

6I.Civil liability for contravention of Division

DIVISION 4—DUTIES OF SENIOR OFFICIALS

6J.Application of Division

6K.Duty of senior officials to act honestly

6L.Duty of senior officials with respect to conflict of interest

6M.Civil liability for contravention of Division

DIVISION 5—DUTIES OF EMPLOYEES

6N.Application of Division

6O.Duty of employees to act honestly

6P.Duty of employees with respect to conflict of interest

6Q.Civil liability for contravention of Division

19.Amendment of s. 12—Termination of Chief Executive's appointment

20.Repeal of s. 18

21.Amendment of s. 21—Termination of Commissioner's appointment

22.Repeal of s. 27

23.Repeal of s. 56

24.Repeal of s. 66

25.Amendment of s. 71—Extension of operation of certain provisions of Act

The Parliament of South Australia enacts as follows:

PART 1

PRELIMINARY

Short title

1. This Act may be cited as the Statutes Amendment (Honesty and Accountability in Government) Act 2002.

Commencement

2. This Act will come into operation on a day to be fixed by proclamation.

Interpretation

3. A reference in this Act to the principal Act is a reference to the Act referred to in the heading to the Part in which the reference occurs.

PART 2

AMENDMENT OF CRIMINAL LAW CONSOLIDATION ACT 1935

Amendment of s. 237—Definitions

4. Section 237 of the principal Act is amended—

(a)by striking out from paragraph (h) of the definition of "public officer" "body," and substituting "body; or";

(b)by inserting after paragraph (h) of the definition of "public officer" the following paragraph:

(i)a person who personally performs work for the Crown, a State instrumentality or a local government body as a contractor or as an employee of a contractor or otherwise directly or indirectly on behalf of a contractor,.

Amendment of s. 251—Abuse of public office

5. Section 251 of the principal Act is amended by inserting after its present contents (now to be designated as subsection (1)) the following subsection:

(2) A former public officer who improperly uses information that he or she gained by virtue of his or her public office with the intention of—

(a)securing a benefit for himself or herself or for another person; or

(b)causing injury or detriment to another person,

is guilty of an offence.

Penalty: Imprisonment for 7 years.

PART 3

AMENDMENT OF PUBLIC CORPORATIONS ACT 1993

Amendment of s. 3—Interpretation

6. Section 3 of the principal Act is amended—

(a)by striking out from the definition of "debenture" in subsection (1) "Corporations Law" and substituting "Corporations Act 2001 of the Commonwealth";

(b)by inserting after the definition of "dividend" in subsection (1) the following definition:

"employee" in relation to a public corporation or a subsidiary of a public corporation, includes a person who personally performs work for the corporation or subsidiary as a contractor or as an employee of a contractor or otherwise directly or indirectly on behalf of a contractor;;

(c)by inserting after the definition of "liability" in subsection (1) the following definition:

"managed investment scheme" has the same meaning as in the Corporations Act 2001 of the Commonwealth;;

(d)by striking out from subsection (1) the definition of "prescribed interest";

(e)by striking out from the definition of "relevant interest" in subsection (1) "Corporations Law" and substituting "Corporations Act 2001 of the Commonwealth";

(f)by inserting after the definition of "remuneration" in subsection (1) the following definition:

"senior executive" in relation to a public corporation or a subsidiary of a public corporation, means an employee of the corporation or subsidiary holding or acting in—

(a)the position of chief executive of the corporation or subsidiary; or

(b)a position designated as a senior executive's position by the board of the corporation or the board of the subsidiary's parent corporation;;

(g)by striking out from the definition of "subsidiary" in subsection (1) "Corporations Law" and substituting "Corporations Act 2001 of the Commonwealth".

Amendment of s. 5—Application of Act

7. Section 5 of the principal Act is amended—

(a)by inserting after subsection (1) the following subsection:

(1a) If a provision of this Act is declared to apply to a statutory corporation (other than a corporation sole), Part 4 and sections 36A to 38A (inclusive) apply to the corporation subject to any modifications prescribed by or under the corporation's incorporating Act or this Act.;

(b)by striking out from subsection (3) "is declared to apply in pursuance of this section" and substituting "applies".

Amendment of s. 16—Director's duty to act honestly

8. Section 16 of the principal Act is amended by striking out subsections (2) and (3).

Amendment of s. 18—Directors' and associates' interests in corporation or subsidiary

9. Section 18 of the principal Act is amended—

(a)by striking out from subsection (1)(a) "prescribed interests made available by" and substituting "managed investment schemes of";

(b)by striking out from subsection (1)(b) "prescribed interests made available by" and substituting "interests in managed investment schemes of";

(c)by striking out from subsection (1)(c) "prescribed interests made available by" and substituting "interests in managed investment schemes of".

Amendment of s. 19—Conflict of interest

10. Section 19 of the principal Act is amended—

(a)by inserting in subsection (1)(a) "in writing" after "disclose";

(b)by striking out from subsection (5) "full and accurate details of the interest or office to the board of the corporation" and substituting "in writing to the board of the corporation full and accurate details of the interest or office".

Insertion of ss. 36A and 36B

11. The following sections are inserted after section 36 of the principal Act:

Duty of employees to act honestly

36A. (1) An employee of a public corporation must at all times act honestly in the performance of his or her duties, whether within or outside the State.

Penalty: Division 4 fine or division 4 imprisonment, or both.

(2) If a person is convicted of an offence against this section in relation to a public corporation, the court by which the person is convicted may, in addition to imposing a penalty, order the convicted person to pay to the corporation—

(a)if the court is satisfied that the person or any other person made a profit as a result of the contravention—an amount equal to the profit; and

(b)if the court is satisfied that the corporation or a subsidiary of the corporation suffered loss or damage as a result of the contravention—compensation for the loss or damage.

(3) If a person contravenes this section in relation to a public corporation, the corporation or the corporation's Minister may (whether or not proceedings have been brought for the offence) recover from the person by action in a court of competent jurisdiction—

(a)if the person or any other person made a profit as a result of the contravention—an amount equal to the profit; and

(b)if the corporation or a subsidiary of the corporation suffered loss or damage as a result of the contravention—compensation for the loss or damage.

Duty of senior executives with respect to conflict of interest

36B. (1) A senior executive of a public corporation must—

(a)on appointment as a senior executive, disclose his or her pecuniary interests to the board of the corporation in writing in accordance with the regulations; and

(b)on acquiring any further pecuniary interest of a kind specified in the regulations, disclose the pecuniary interest to the board of the corporation in writing in accordance with the regulations; and

(c)if a pecuniary interest (whether or not required to be disclosed under paragraph (a) or (b)) or other personal interest of the senior executive conflicts or may conflict with his or her duties—

(i)disclose in writing to the board of the corporation the nature of the interest and the conflict or potential conflict; and

(ii)not take action or further action in relation to the matter except as authorised in writing by the corporation's Minister.

Penalty: Division 4 fine.

(2) Subsection (1)(a) applies to a person who is a senior executive of a public corporation on the commencement of this section as if the requirement to disclose interests on appointment as a senior executive were a requirement to disclose the interests within one month after that commencement.

(3) A senior executive of a public corporation must comply with any written directions given by the corporation's Minister to resolve a conflict between the executive's duties and a pecuniary or other personal interest.

Penalty: Division 4 fine.

(4) Without limiting the effect of this section, a senior executive of a public corporation will be taken to have an interest in a matter for the purposes of this section if an associate of the executive has an interest in the matter.

(5) A disclosure under subsection (1)(c) must be reported to the corporation's Minister.

(6) If a senior executive of a public corporation makes a disclosure of interest and complies with the other requirements of subsection (1) in respect of a proposed contract—

(a)the contract is not liable to be avoided by the corporation; and

(b)the executive is not liable to account to the corporation for profits derived from the contract.

(7) If a senior executive of a public corporation fails to make a disclosure of interest or fails to comply with any other requirement of subsection (1) in respect of a proposed contract, the contract is liable to be avoided by the corporation or the corporation's Minister.

(8) A contract may not be avoided under subsection (7) if a person has acquired an interest in property the subject of the contract in good faith for valuable consideration and without notice of the contravention.

(9) If a person is convicted of an offence against this section in relation to a public corporation, the court by which the person is convicted may, in addition to imposing a penalty, order the convicted person to pay to the corporation—

(a)if the court is satisfied that the person or any other person made a profit as a result of the contravention—an amount equal to the profit; and

(b)if the court is satisfied that the corporation or a subsidiary of the corporation suffered loss or damage as a result of the contravention—compensation for the loss or damage.

(10) If a person contravenes this section in relation to a public corporation, the corporation or the corporation's Minister may (whether or not proceedings have been brought for the offence) recover from the person by action in a court of competent jurisdiction—

(a)if the person or any other person made a profit as a result of the contravention—an amount equal to the profit; and

(b)if the corporation or a subsidiary of the corporation suffered loss or damage as a result of the contravention—compensation for the loss or damage.

(11) This section does not apply in relation to a conflict or potential conflict between a senior executive's duties and a pecuniary or other personal interest while the executive remains unaware of the conflict or potential conflict, but in any proceedings against the executive the burden will lie on the executive to prove that he or she was not, at the material time, aware of the conflict or potential conflict.

Amendment of s. 38—Executives' and associates' interests in corporation or subsidiary

12. Section 38 of the principal Act is amended—

(a)by striking out from subsection (1)(a) "prescribed interests made available by" and substituting "managed investment schemes of";

(b)by striking out from subsection (1)(b) "prescribed interests made available by" and substituting "interests in managed investment schemes of";

(c)by striking out from subsection (1)(c) "prescribed interests made available by" and substituting "interests in managed investment schemes of".

Insertion of s. 38A

13. The following section is inserted after section 38 of the principal Act:

Duty of employees with respect to conflict of interest

38A. (1) If an employee of a public corporation has a pecuniary or other personal interest that conflicts or may conflict with the employee's duties, the employee must disclose in writing to the chief executive of the corporation the nature of the interest and the conflict or potential conflict.

(2) An employee of a public corporation must comply with any written directions given by the chief executive of the corporation to resolve a conflict between the employee's duties and a pecuniary or other personal interest.

(3) Without limiting the effect of this section, an employee of a public corporation will be taken to have an interest in a matter for the purposes of this section if an associate of the employee has an interest in the matter.

(4) A disclosure under subsection (1) must be reported to the board of the corporation and to the corporation's Minister.

(5) Failure by an employee to comply with this section constitutes grounds for termination of the employee's employment.

(6) If an employee of a public corporation makes a disclosure of interest under subsection (1) in respect of a proposed contract—

(a)the contract is not liable to be avoided by the corporation; and

(b)the employee is not liable to account to the corporation for profits derived from the contract.

(7) If an employee of a public corporation fails to make a disclosure of interest under subsection (1) in respect of a proposed contract, the contract is liable to be avoided by the corporation or the corporation's Minister.

(8) A contract may not be avoided under subsection (7) if a person has acquired an interest in property the subject of the contract in good faith for valuable consideration and without notice of the contravention.

(9) If a person contravenes this section in relation to a public corporation, the corporation or the corporation's Minister may recover from the person by action in a court of competent jurisdiction—

(a)if the person or any other person made a profit as a result of the contravention—an amount equal to the profit; and

(b)if the corporation or a subsidiary of the corporation suffered loss or damage as a result of the contravention—compensation for the loss or damage.

(10) This section does not apply in relation to a conflict or potential conflict between an employee's duties and a pecuniary or other personal interest while the employee remains unaware of the conflict or potential conflict, but in any proceedings against the employee the burden will lie on the employee to prove that he or she was not, at the material time, aware of the conflict or potential conflict.

(11) This section does not apply to a senior executive of a public corporation.

Amendment of Sched.—Provisions applicable to subsidiaries

14. The Schedule of the principal Act is amended—

(a)by striking out subclauses (2) and (3) of clause 5;

(b)by striking out from clause 7(1)(a) "prescribed interests made available by" and substituting "managed investment schemes of";

(c)by striking out from clause 7(1)(b) "prescribed interests made available by" and substituting "interests in managed investment schemes of";

(d)by striking out from clause 7(1)(c) "prescribed interests made available by" and substituting "interests in managed investment schemes of";

(e)by inserting in clause 8(1)(a) "in writing" after "disclose";

(f)by striking out from clause 8(5) "full and accurate details of the interest or office to the board of the subsidiary" and substituting "in writing to the board of the subsidiary full and accurate details of the interest or office";

(g)by inserting after clause 14 the following clauses:

Duty of employees to act honestly

14A. (1) An employee of a subsidiary must at all times act honestly in the performance of his or her duties, whether within or outside the State.

Penalty: Division 4 fine or division 4 imprisonment, or both.

(2) If a person is convicted of an offence against this clause in relation to a subsidiary, the court by which the person is convicted may, in addition to imposing a penalty, order the convicted person to pay to the parent corporation of the subsidiary—

(a)if the court is satisfied that the person or any other person made a profit as a result of the contravention—an amount equal to the profit; and

(b)if the court is satisfied that the subsidiary, the parent corporation or any other subsidiary of the parent corporation suffered loss or damage as a result of the contravention—compensation for the loss or damage.

(3) If a person contravenes this clause in relation to a subsidiary, the parent corporation or the parent corporation's Minister may (whether or not proceedings have been brought for the offence) recover from the person by action in a court of competent jurisdiction—

(a)if the person or any other person made a profit as a result of the contravention—an amount equal to the profit; and

(b)if the subsidiary, the parent corporation or any other subsidiary of the parent corporation suffered loss or damage as a result of the contravention—compensation for the loss or damage.

Duty of senior executives with respect to conflict of interest

14B. (1) A senior executive of a subsidiary must—

(a)on appointment as a senior executive, disclose his or her pecuniary interests to the board of the subsidiary in writing in accordance with the regulations; and

(b)on acquiring any further pecuniary interest of a kind specified in the regulations, disclose the pecuniary interest to the board of the subsidiary in writing in accordance with the regulations; and

(c)if a pecuniary interest (whether or not required to be disclosed under paragraph (a) or (b)) or other personal interest of the senior executive conflicts or may conflict with his or her duties—

(i)disclose in writing to the board of the subsidiary the nature of the interest and the conflict or potential conflict; and

(ii)not take action or further action in relation to the matter except as authorised in writing by the subsidiary's parent corporation's Minister.

Penalty: Division 4 fine.

(2) Subclause (1)(a) applies to a person who is a senior executive of a subsidiary on the commencement of this clause as if the requirement to disclose interests on appointment as a senior executive were a requirement to disclose the interests within one month after that commencement.

(3) A senior executive of a subsidiary must comply with any written directions given by the subsidiary's parent corporation's Minister to resolve a conflict between the executive's duties and a pecuniary or other personal interest.

Penalty: Division 4 fine.

(4) Without limiting the effect of this clause, a senior executive of a subsidiary will be taken to have an interest in a matter for the purposes of this clause if an associate of the executive has an interest in the matter.

(5) A disclosure under subclause (1)(c) must be reported to the board of the parent corporation and the parent corporation's Minister.

(6) If a senior executive of a subsidiary makes a disclosure of interest and complies with the other requirements of subclause (1) in respect of a proposed contract—

(a)the contract is not liable to be avoided by the subsidiary; and

(b)the executive is not liable to account to the subsidiary for profits derived from the contract.

(7) If a senior executive of a subsidiary fails to make a disclosure of interest or fails to comply with any other requirement of subclause (1) in respect of a proposed contract, the contract is liable to be avoided by the subsidiary or by its parent corporation or its parent corporation's Minister.

(8) A contract may not be avoided under subclause (7) if a person has acquired an interest in property the subject of the contract in good faith for valuable consideration and without notice of the contravention.

(9) If a person is convicted of an offence against this clause in relation to a subsidiary, the court by which the person is convicted may, in addition to imposing a penalty, order the convicted person to pay to the parent corporation of the subsidiary—

(a)if the court is satisfied that the person or any other person made a profit as a result of the contravention—an amount equal to the profit; and

(b)if the court is satisfied that the subsidiary, the parent corporation or any other subsidiary of the parent corporation suffered loss or damage as a result of the contravention—compensation for the loss or damage.

(10) If a person contravenes this clause in relation to a subsidiary, the parent corporation or the parent corporation's Minister may (whether or not proceedings have been brought for the offence) recover from the person by action in a court of competent jurisdiction—

(a)if the person or any other person made a profit as a result of the contravention—an amount equal to the profit; and

(b)if the subsidiary, the parent corporation or any other subsidiary of the parent corporation suffered loss or damage as a result of the contravention—compensation for the loss or damage.

(11) This clause does not apply in relation to a conflict or potential conflict between a senior executive's duties and a pecuniary or other personal interest while the executive remains unaware of the conflict or potential conflict, but in any proceedings against the executive the burden will lie on the executive to prove that he or she was not, at the material time, aware of the conflict or potential conflict.;

(h)by striking out from clause 16(1)(a) "prescribed interests made available by" and substituting "managed investment schemes of";

(i)by striking out from clause 16(1)(b) "prescribed interests made available by" and substituting "interests in managed investment schemes of";

(j)by striking out from clause 16(1)(c) "prescribed interests made available by" and substituting "interests in managed investment schemes of";

(k)by inserting after clause 16 the following clause:

Duty of employees with respect to conflict of interest

16A. (1) If an employee of a subsidiary has a pecuniary or other personal interest that conflicts or may conflict with the employee's duties, the employee must disclose in writing to the chief executive of the subsidiary the nature of the interest and the conflict or potential conflict.

(2) An employee of a subsidiary must comply with any written directions given by the chief executive of the subsidiary to resolve a conflict between the employee's duties and a pecuniary or other personal interest.

(3) Without limiting the effect of this clause, an employee of a subsidiary will be taken to have an interest in a matter for the purposes of this clause if an associate of the employee has an interest in the matter.

(4) A disclosure under subclause (1) must be reported to the board of the subsidiary, the board of the parent corporation and the parent corporation's Minister.

(5) Failure by an employee to comply with this clause constitutes grounds for termination of the employee's employment.

(6) If an employee of a subsidiary makes a disclosure of interest under subclause (1) in respect of a proposed contract—

(a)the contract is not liable to be avoided by the subsidiary; and

(b)the employee is not liable to account to the subsidiary for profits derived from the contract.

(7) If an employee of a subsidiary fails to make a disclosure of interest under subclause (1) in respect of a proposed contract, the contract is liable to be avoided by the subsidiary or by its parent corporation or its parent corporation's Minister.

(8) A contract may not be avoided under subclause (7) if a person has acquired an interest in property the subject of the contract in good faith for valuable consideration and without notice of the contravention.

(9) If a person contravenes this clause in relation to a subsidiary, the parent corporation or the parent corporation's Minister may recover from the person by action in a court of competent jurisdiction—

(a)if the person or any other person made a profit as a result of the contravention—an amount equal to the profit; and

(b)if the subsidiary, the parent corporation or any other subsidiary of the parent corporation suffered loss or damage as a result of the contravention—compensation for the loss or damage.

(10) This clause does not apply in relation to a conflict or potential conflict between an employee's duties and a pecuniary or other personal interest while the employee remains unaware of the conflict or potential conflict, but in any proceedings against the employee the burden will lie on the employee to prove that he or she was not, at the material time, aware of the conflict or potential conflict.

(11) This clause does not apply to a senior executive of a subsidiary.

PART 4

AMENDMENT OF PUBLIC SECTOR MANAGEMENT ACT 1995

Amendment of s. 3

15. Section 3 of the principal Act is amended—

(a)by inserting after the definition of "administrative unit" in subsection (1) the following definition:

"beneficiary" includes a person who is an object of a discretionary trust;;

(b)by inserting after the definition of "the Commissioner" in subsection (1) the following definition:

"debenture" has the same meaning as in the Corporations Act 2001 of the Commonwealth;;

(c)by inserting after the definition of "executive" in subsection (1) the following definition:

"managed investment scheme" has the same meaning as in the Corporations Act 2001 of the Commonwealth;;

(d)by striking out from paragraph (c)(iii) of the definition of "public sector agency" in subsection (1) "agency," and substituting "agency; or";

(e)by inserting after paragraph (c) of the definition of "public sector agency" in subsection (1) the following paragraph:

(d)a subsidiary of a person or body referred to in paragraph (b) or (c),;

(f)by striking out from subsection (1) the definition of "public sector employee" and substituting the following definition:

"public sector employee" means—

(a)a person appointed to the Public Service; or

(b)a person employed by the Crown or a public sector agency; or

(c)a person personally performing work for the Crown or a public sector agency as a contractor or as an employee of a contractor or otherwise directly or indirectly on behalf of a contractor;;

(g)by inserting after the definition of "recognised organisation" in subsection (1) the following definitions:

"relative", in relation to a person, means the spouse, parent or remoter linear ancestor, son, daughter or remoter issue or brother or sister of the person;

"relevant interest" has the same meaning as in the Corporations Act 2001 of the Commonwealth;

"relevant Minister" means—

(a)in relation to a public sector agency—

(i)in the case of an agency established under an Act other than this Act—the Minister responsible for the administration of the Act; or

(ii)in any other case—the Minister responsible for the agency;

(b)in relation to a senior official or employee—

(i)in the case of the Commissioner or the Deputy Commissioner for Public Employment—the Minister responsible for the administration of this Act;

(ii)in any other case—the Minister responsible for the public sector agency by or in which the senior official or employee is employed;;

(h)by inserting after the definition of "selection processes" in subsection (1) the following definitions:

"senior official" means—

(a)the Commissioner for Public Employment; or

(b)the Deputy Commissioner for Public Employment; or

(c)the Chief Executive of an administrative unit; or

(d)a statutory office holder with the powers and functions of a Chief Executive of an administrative unit; or

(e)a chief executive (or acting chief executive) of a public sector agency other than an administrative unit; or

(f)a person declared under subsection (2) to be a senior official;

"spouse" includes a putative spouse (whether or not a declaration of the relationship has been made under the Family Relationships Act 1975);

"subsidiary" has the same meaning as in the Corporations Act 2001 of the Commonwealth;;

(i)by inserting after subsection (1) the following subsection:

(1a) For the purposes of this Act—

(a)a person is an associate of another person if—

(i)the other person is a relative of the person or of the person's spouse; or

(ii)the other person—

(A)is a body corporate; and

(B)the person or a relative of the person or of the person's spouse has, or two or more such persons together have, a relevant interest or relevant interests in shares in the body corporate the nominal value of which is not less than 10 per cent of the nominal value of the issued share capital of the body corporate; or

(iii)the other person is a trustee of a trust of which the person, a relative of the person or of the person's spouse or a body corporate referred to in subparagraph (ii) is a beneficiary; or

(iv)the person is declared by the regulations to be an associate of the other person;

(b)in determining whether a company is a subsidiary of a public sector agency, any shares held, or powers exercisable by, the agency or any other body are not to be taken to be held or exercisable in a fiduciary capacity by reason of the fact that the agency is an instrumentality of the Crown or holds its property on behalf of the Crown.;

(j)by inserting after paragraph (a) of subsection (2) the following paragraph:

(ab)declare that a person holding or acting in a specified position in a public sector agency is a senior official; or.

Substitution of heading to Part 2

16. The heading to Part 2 of the principal Act is repealed and the following headings are substituted:

PART 2

GENERAL PUBLIC SECTOR AIMS, STANDARDS AND DUTIES

DIVISION 1—AIMS AND STANDARDS

Amendment of s. 6—Employee conduct standards

17. Section 6 of the principal Act is amended by inserting after paragraph (e) the following paragraph:

(ea)observe the requirements of any code of conduct for employees issued from time to time by the Commissioner; and.

Insertion of Divisions

18. The following Divisions are inserted after section 6 of the principal Act:

DIVISION 2—DUTY OF AGENCIES TO REPORT

Duty of agencies to report

6A. (1) Each public sector agency must, once in each year, present a report on the agency's operations to the relevant Minister in accordance with this Division.

(2) Subject to this section, the report must be related to a financial year and must be presented within three months after the end of the financial year to which it relates.

(3) If a public sector agency is under some other statutory obligation to make an annual report to the relevant Minister—

(a)the report required by this section may be incorporated with that other report; and

(b)the period to which the report relates must be the same as for that other report; and

(c)the report must be presented within three months after the end of the reporting period referred to above.

(4) A Minister must, within 12 sitting days after receipt of a report under this section, cause copies of the report to be laid before each House of Parliament.

(5) If a report is presented to the relevant Minister after the end of the period allowed under this section, the report must be accompanied by a written statement of the reasons for the delay and the statement must be laid before each House of Parliament together with the report.

Contents of report

6B. (1) The public sector agency must ensure that the report is accurate, comprehensive, deals with all significant issues affecting the agency and written and presented in a manner that aids ready comprehension.

(2) The report must contain the information required by the regulations.

DIVISION 3—DUTIES OF CORPORATE AGENCY MEMBERS

Application of Division

6C. (1) This Division applies to persons (corporate agency members) who are—

(a)members of a public sector agency that is a body corporate; or

(b)members of the governing body of a public sector agency that is a body corporate.

(2) This Division does not apply in relation to a corporation sole.

(3) This Division does not apply to a corporate agency member if provisions of the Public Corporations Act 1993 apply to the public sector agency.

Duty of corporate agency members to act honestly

6D. A corporate agency member must at all times act honestly in the performance of the functions of his or her office, whether within or outside the State.

Penalty:Division 4 fine or division 4 imprisonment, or both.

Duty of corporate agency members not to be involved in unauthorised transactions with agency or subsidiary

6E. (1) Neither a corporate agency member nor an associate of a corporate agency member may, without the approval of the relevant Minister, be directly or indirectly involved in a transaction with the agency or any subsidiary of the agency.

(2) A person will be treated as being indirectly involved in a transaction for the purposes of subsection (1)—

(a)if the person initiates, promotes or takes any part in negotiations or steps leading to the making of the transaction with a view to that person or an associate of that person gaining some financial or other benefit (whether immediately or at a time after the making of the transaction); and

(b)despite the fact that neither that person nor an agent, nominee or trustee of that person becomes a party to the transaction.

(3) Subsection (1) does not apply—

(a)to the provision of services by the agency or any subsidiary of the agency in the ordinary course of its ordinary business and on ordinary terms; or

(b)to transactions of a prescribed class.

(4) If a transaction is made with an agency or any subsidiary of the agency in contravention of subsection (1), the transaction is liable to be avoided by the agency or by the relevant Minister.

(5) A transaction may not be avoided under subsection (4) if a person has acquired an interest in property the subject of the transaction in good faith for valuable consideration and without notice of the contravention.

(6) A corporate agency member must not counsel, procure, induce or be in any way (whether by act or omission or directly or indirectly) knowingly concerned in, or party to, a contravention of subsection (1).

Penalty:If an intention to deceive or defraud is proved—Division 4 fine or division 4 imprisonment, or both.

In any other case—Division 6 fine.

Duty of corporate agency members not to have unauthorised interest in agency or subsidiary

6F. (1) Neither a corporate agency member nor an associate of a corporate agency member may, without the approval of the relevant Minister—

(a)have or acquire a beneficial interest in shares in, debentures of or managed investment schemes of the agency or any subsidiary of the agency; or

(b)have or hold or acquire (whether alone or with another person or persons) a right or option in respect of the acquisition or disposal of shares in, debentures of or interests in managed investment schemes of the agency or any subsidiary of the agency; or

(c)be a party to, or entitled to a benefit under, a contract under which a person has a right to call for or make delivery of shares in, debentures of or interests in managed investment schemes of the agency or any subsidiary of the agency.

(2) A corporate agency member must not counsel, procure, induce or be in any way (whether by act or omission or directly or indirectly) knowingly concerned in, or party to, a contravention of subsection (1).

Penalty:If an intention to deceive or defraud is proved—Division 4 fine or division 4 imprisonment, or both.

In any other case—Division 6 fine.

Duty of corporate agency members with respect to conflict of interest

6G. (1) A corporate agency member who has a direct or indirect personal or pecuniary interest in a matter decided or under consideration by the agency or the governing body of the agency—

(a)must, as soon as reasonably practicable, disclose in writing to the agency or the governing body of the agency full and accurate details of the interest; and

(b)must not take part in any discussion by the agency or the governing body of the agency relating to that matter; and

(c)must not vote in relation to that matter; and

(d)must be absent from the meeting room when any such discussion or voting is taking place.

Penalty:Division 4 fine.

(2) If a corporate agency member makes a disclosure of interest and complies with the other requirements of subsection (1) in respect of a proposed contract—

(a)the contract is not liable to be avoided by the agency; and

(b)the corporate agency member is not liable to account to the agency for profits derived from the contract.

(3) If a corporate agency member fails to make a disclosure of interest or fails to comply with any other requirement of subsection (1) in respect of a proposed contract, the contract is liable to be avoided by the agency or by the relevant Minister.

(4) A contract may not be avoided under subsection (3) if a person has acquired an interest in property the subject of the contract in good faith for valuable consideration and without notice of the contravention.

(5) Where a corporate agency member has or acquires a personal or pecuniary interest, or is or becomes the holder of an office, such that it is reasonably foreseeable that a conflict might arise with his or her duties as a corporate agency member of the agency, the corporate agency member must, as soon as reasonably practicable, disclose in writing to the agency or the governing body of the agency full and accurate details of the interest or office.

Penalty:Division 4 fine.

(6) A disclosure under this section must be recorded in the minutes of the agency or the governing body of the agency and reported to the relevant Minister.

(7) If, in the opinion of the relevant Minister, a particular interest or office of a corporate agency member is of such significance that the holding of the interest or office is not consistent with the proper discharge of the duties of the corporate agency member, the Minister may require the corporate agency member either to divest himself or herself of the interest or office or to resign from the agency or governing body of the agency (and non-compliance with the requirement constitutes misconduct and hence a ground for removal of the corporate agency member from the agency or governing body of the agency).

(8) Without limiting the effect of this section, a corporate agency member will be taken to have an interest in a matter for the purposes of this section if an associate of the corporate agency member has an interest in the matter.

(9) This section does not apply in relation to a matter in which a corporate agency member has an interest while the corporate agency member remains unaware that he or she has an interest in the matter, but in any proceedings against the corporate agency member the burden will lie on the corporate agency member to prove that he or she was not, at the material time, aware of his or her interest.

Removal of corporate agency members

6H. Non-compliance by a corporate agency member with a duty imposed by this Division constitutes a ground for removal of the corporate agency member from office.

Civil liability for contravention of Division

6I. (1) If a person who is a corporate agency member or former corporate agency member is convicted of an offence for a contravention of this Division, the court by which the person is convicted may, in addition to imposing a penalty, order the convicted person to pay to the agency—

(a)if the court is satisfied that the person or any other person made a profit as a result of the contravention—an amount equal to the profit; and

(b)if the court is satisfied that the agency or a subsidiary of the agency suffered loss or damage as a result of the contravention—compensation for the loss or damage.

(2) If a person who is a corporate agency member or former corporate agency member is guilty of a contravention of this Division, the agency or the relevant Minister may (whether or not proceedings have been brought for the offence) recover from the person by action in a court of competent jurisdiction—

(a)if the person or any other person made a profit as a result of the contravention—an amount equal to the profit; and

(b)if the agency or a subsidiary of the agency suffered loss or damage as a result of the contravention—compensation for the loss or damage.

DIVISION 4—DUTIES OF SENIOR OFFICIALS

Application of Division

6J. This Division does not apply to a senior official if provisions of the Public Corporations Act 1993 apply to the senior official.

Duty of senior officials to act honestly

6K. A senior official must at all times act honestly in the performance of his or her duties, whether within or outside the State.

Penalty: Division 4 fine or division 4 imprisonment, or both.

Duty of senior officials with respect to conflict of interest

6L. (1) A senior official must—

(a)on appointment as a senior official, disclose his or her pecuniary interests to the relevant Minister in writing in accordance with the regulations; and

(b)on acquiring any further pecuniary interest of a kind specified in the regulations, disclose the pecuniary interest to the relevant Minister in writing in accordance with the regulations; and

(c)if a pecuniary interest (whether or not required to be disclosed under paragraph (a) or (b)) or other personal interest of the senior official conflicts or may conflict with his or her duties—

(i)disclose in writing to the relevant Minister the nature of the interest and the conflict or potential conflict; and

(ii)not take action or further action in relation to the matter except as authorised in writing by the relevant Minister.

Penalty: Division 4 fine.

(2) Subsection (1)(a) applies to a person who is a senior official on the commencement of this section as if the requirement to disclose interests on appointment as a senior official were a requirement to disclose the interests within one month after that commencement.

(3) A senior official must comply with any written directions given by the relevant Minister to resolve a conflict between the senior official's duties and a pecuniary or other personal interest.

Penalty: Division 4 fine.

(4) Without limiting the effect of this section, a senior official will be taken to have an interest in a matter for the purposes of this section if an associate of the senior official has an interest in the matter.

(5) If a senior official makes a disclosure of interest and complies with the other requirements of subsection (1) in respect of a proposed contract—

(a)the contract is not liable to be avoided; and

(b)the senior official is not liable to account for profits derived from the contract.

(6) If a senior official fails to make a disclosure of interest or fails to comply with any other requirement of subsection (1) in respect of a proposed contract, the contract is liable to be avoided by the relevant Minister.

(7) A contract may not be avoided under subsection (6) if a person has acquired an interest in property the subject of the contract in good faith for valuable consideration and without notice of the contravention.

(8) This section does not apply in relation to a conflict or potential conflict between a senior official's duties and a pecuniary or other personal interest while the senior official remains unaware of the conflict or potential conflict, but in any proceedings against the senior official the burden will lie on the senior official to prove that he or she was not, at the material time, aware of the conflict or potential conflict.

Civil liability for contravention of Division

6M. (1) If a person is convicted of an offence against this Division, the court by which the person is convicted may, in addition to imposing a penalty, order the convicted person to pay to the relevant Minister—

(a)if the court is satisfied that the person or any other person made a profit as a result of the contravention—an amount equal to the profit; and

(b)if the court is satisfied that any loss or damage has been suffered as a result of the contravention—compensation for the loss or damage.

(2) If a person contravenes this Division, the relevant Minister may (whether or not proceedings have been brought for the offence) recover from the person by action in a court of competent jurisdiction—

(a)if the person or any other person made a profit as a result of the contravention—an amount equal to the profit; and

(b)if any loss or damage has been suffered as a result of the contravention—compensation for the loss or damage.

DIVISION 5—DUTIES OF EMPLOYEES

Application of Division

6N. This Division does not apply to an employee if Division 4 or provisions of the Public Corporations Act 1993 apply to the employee.

Duty of employees to act honestly

6O. A public sector employee must at all times act honestly in the performance of his or her duties, whether within or outside the State.

Penalty: Division 4 fine or division 4 imprisonment, or both.

Duty of employees with respect to conflict of interest

6P. (1) If a public sector employee has a pecuniary or other personal interest that conflicts or may conflict with the employee's duties, the employee must disclose in writing to the chief executive of the public sector agency by or in which the employee is employed the nature of the interest and the conflict or potential conflict.

(2) An employee employed by or in a public sector agency must comply with any written directions given by the chief executive of the agency to resolve a conflict between the employee's duties and a pecuniary or other personal interest.

(3) Without limiting the effect of this section, a public sector employee will be taken to have an interest in a matter for the purposes of this section if an associate of the employee has an interest in the matter.

(4) Failure by an employee (other than an employee to whom Part 8 applies) to comply with this section constitutes grounds for termination of the employee's employment.

(5) If an employee makes a disclosure of interest under subsection (1) in respect of a proposed contract—

(a)the contract is not liable to be avoided; and

(b)the employee is not liable to account for profits derived from the contract.

(6) If an employee fails to make a disclosure of interest under subsection (1) in respect of a proposed contract, the contract is liable to be avoided by the relevant Minister.

(7) A contract may not be avoided under subsection (6) if a person has acquired an interest in property the subject of the contract in good faith for valuable consideration and without notice of the contravention.

(8) This section does not apply in relation to a conflict or potential conflict between an employee's duties and a pecuniary or other personal interest while the employee remains unaware of the conflict or potential conflict, but in any proceedings against the employee the burden will lie on the employee to prove that he or she was not, at the material time, aware of the conflict or potential conflict.

Civil liability for contravention of Division

6Q. (1) If a person is convicted of an offence against this Division, the court by which the person is convicted may, in addition to imposing a penalty, order the convicted person to pay to the relevant Minister—

(a)if the court is satisfied that the person or any other person made a profit as a result of the contravention—an amount equal to the profit; and

(b)if the court is satisfied that any loss or damage has been suffered as a result of the contravention—compensation for the loss or damage.

(2) If a person contravenes this section, the relevant Minister may recover from the person by action in a court of competent jurisdiction—

(a)if the person or any other person made a profit as a result of the contravention—an amount equal to the profit; and

(b)if any loss or damage has been suffered as a result of the contravention—compensation for the loss or damage.

Amendment of s. 12—Termination of Chief Executive's appointment

19. Section 12 of the principal Act is amended by inserting in subsection (1)(a)(ii) "an offence against this Act or" after "convicted of".

Repeal of s. 18

20. Section 18 of the principal Act is repealed.

Amendment of s. 21—Termination of Commissioner's appointment

21. Section 21 of the principal Act is amended by inserting in subsection (1)(b) "an offence against this Act or" after "convicted of".

Repeal of s. 27

22. Section 27 of the principal Act is repealed.

Repeal of s. 56

23. Section 56 of the principal Act is repealed.

Repeal of s. 66

24. Section 66 of the principal Act is repealed.

Amendment of s. 71—Extension of operation of certain provisions of Act

25. Section 71 of the principal Act is amended—

(a)by striking out from subsection (2) "subsection (3)" and substituting "this section";

(b)by inserting after subsection (2) the following subsection:

(2a) The provisions of Schedule 2 relating to long service leave do not apply to persons personally performing work for the Crown or a public sector agency as a contractor or as an employee of a contractor or otherwise directly or indirectly on behalf of a contractor.

By Authority: J. D. Ferguson, Government Printer, South Australia