Australian Government to introduce sanctions for charitable organisation who fail to join the National Redress Scheme

When the Australian National Redress Scheme (NRS) was established in July 2018, institutions named in the Royal Commission into Institutional Responses to Child Sexual Abuse and/or in an application to the NRS were asked to join the scheme by 30 June 2020.

Due to difficulties that some institutions may have experienced as a result of COVID-19, institutions were asked to provide a written statement outlining their intention to join but given an extension of time to complete the process by 31 December 2020.

The Australian Government has always made it clear that it is committed to utilising serious financial levers to ensure that all institutions where the sexual abuse of children occurred were held accountable for that abuse. This commitment was evidenced by an announcement on the 27 November 2020, on the 2nd anniversary of the National Apology to Victims and Survivors of Institutional Child Sexual Abuse of the Government’s intention to introduce sanctions for charities that failed to join the NRS.

The Australian Charities and not-for profits commission are to be given the power to deregister a charity which did not take reasonable steps to participate in the NRS.

Minister for Families and Social Services, Anne Ruston said: “It is completely unacceptable for named institutions to refuse to accept their moral obligation and responsibility to acknowledge the wrongs committed…This proposal delivers on the Prime Minister’s commitment to place further sanctions on recalcitrant institutions and we hope this will encourage them to reconsider their position allowing child sexual abuse survivors to receive the redress and recognition they undeniably deserve.”

The proposals include introducing a new Australian Charities and Not-for profits Commission (ACNC) Governance Standard that would require registered charities to take all reasonable steps to become a participating non-government institution in the NRS if a claim has been, or was likely to be, made against them. The Government is seeking submissions on the draft legislative instrument and explanatory materials for the introduction of the new governance standard in the Australian Charities and Not-for-profits Commission Regulation 2013. The consultation period is open from 7 December 2020 to 8 January 2021.

The proposals also include plans to amend the definition of ‘basic religious charity’ under s 205-35 of the Australian Charities and Not for-profits Commission Act 2012 to provide that a religious institution that has been named in a redress application but refuses to join the NRS will not be entitled to be a ‘basic religious institution’. In practice this will mean that the religious institution is then required to comply with not only the proposed Governance Standard referred to above but all of the existing Governance Standards unless and until it joins the NRS. The necessary legislation to give effect to this change was to be introduced into Parliament before the end of the year through the Treasury Laws Amendment (2020 Measures No. 6) Bill 2020.

Registered charities which fail to fulfil their obligation to join, or take reasonable steps to join, the NRS will be subject to the ACNC’s existing compliance powers, including revocation of charity registration, which would result in the loss of access to a range of commonwealth benefits, tax and other concessions.

In addition to ACNC compliance action, registered charities which fail to join or signify their intent to join the NRS already risk having their name published on the NRS website.

As of the 31 December 2020 the NRS had published a list of institutions that were either named by the Royal Commission and/or in an application made to the NRS and, as of that date, had failed to join or signify their intention to join the NRS and they are as follows:

  • Jehova’s Witnesses
  • Communication
  • Fairbridge Restored Limited

This list does not include institutions that are defunct, meaning they no longer exist.

In addition to the sanctions set out above in terms of charitable status the Australian Government has also put in place a National Redress Scheme Grant Connected Policy. This policy provides that those institutions that have been identified by the Royal Commission and/or in an application to the NRS and who did not join the NRS within the required timeframe (i.e. by 31 December 2020) will no longer be eligible to access future Australian Government grant funding. The Australian Government say that they will update this list on a regular basis so that it will form a reliable point of reference for all government departments and agencies who are administering such grant aid and funding.

The NRS have also advised that from 1 January 2021, when the NRS receives an application that names an institution which had not been previously named, that institution will have a period of six months from their first engagement to join the NRS.

Failure to join the NRS within six months means that such institutions may be publicly named, will have financial sanctions applied and may lose their charitable status until they join the NRS.

While the carrot and stick approach utilised by the Australian Government in order to encourage participation by institutions in the NRS has been successful in the main (i.e. on the date of the announcement of the above sanctions all state and territory governments and 358 non-government institutions were participating in the NRS), the announcement of these sanctions can leave institutions in no doubt that the Australian Government will happily use whatever stick is available to them to ensure participation.

These recent developments in Australia are also no doubt being keenly observed by the governments in Scotland and Northern Ireland who are still in the early stages of engagement with institutions and negotiating with those institutions as to what their involvement and/or contribution might look like vis-à-vis those national redress schemes. It is also likely that these sanctions will come to the attention of IICSA and form part of their considerations as they set about finalising their outstanding reports and recommendations.

Sharon Moohan is a Partner at BLM

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s