The Bulletin - Law Society of South Australia - August 2021

THE

BULLETIN THE LAW SOCIETY OF SA JOURNAL

VOLUME 43 – ISSUE 7 – AUGUST 2021

IN THIS ISSUE

Responsible lending laws Corporate responsible to address climate change Combatting modern slavery PLUS:

Survey reveals mental health challenges for SA lawyers

CORPORATE & PROFESSIONAL

RESPONSIBILITY

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This issue of The Law Society of South Australia: Bulletin is cited as (2020) 43 (7) LSB(SA). ISSN 1038-6777

CONTENTS CORPORATE & PROFESSIONAL RESPONSIBILITY

FEATURES & NEWS

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Is the legal industry complicit in climate change? How Sharma has turned the heat up on lawyers’ responsibilities – By Brynn O’Brien

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Vaccination against mental health key to building wellbeing & resilience: A conversation with Gabrielle Kelly

By Michael Esposito

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Responsible Lending and Responsible Spending: What’s with the push to rollback consumer protection?

By Alexander Mackey

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Letter to the editor: Decriminalisation of sex work – By Loretta Polson

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Sex with robots: How should the law respond? – By Madi McCarthy & Prof Tania Leiman

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Tips to avoid breaching the ‘no-profit’ rule – By Werner Van Wyk

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Australian businesses must join to eradicate modern slavery

By Dr Jacoba Brasch QC

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A Decade on from the Guiding Principles on Business and Human Rights (UNGPs): Is consensus still lacking? – By Raffaele Piccolo Businesses’ responsibilities to assess and address climate risks

By Nicole Mead

Executive Members President: President-Elect: Vice President: Vice President: Treasurer: Immediate Past President: Council Member: Council Member:

R Sandford J Stewart-Rattray A Lazarevich V Gilliland F Bell T White M Mackie M Tilmouth

Metropolitan Council Members T Dibden M Tilmouth A Lazarevich M Mackie M Boyle E Shaw J Marsh C Charles R Piccolo M Jones Country Members S Minney (Northern and Western Region) P Ryan (Central Region) J Kyrimis (Southern Region) Junior Members Vacant Ex Officio Members The Hon V Chapman, Prof V Waye, Prof M de Zwart, Prof T Leiman

REGULAR COLUMNS 4

President’s Message

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From the Editor

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Dialogue – By Rosemary Pridmore

KEY LAW SOCIET Y CONTACTS Chief Executive Stephen Hodder stephen.hodder@lawsocietysa.asn.au Executive Officer Rosemary Pridmore rosemary.pridmore@lawsocietysa.asn.au Chief Operations Officer Dale Weetman dale.weetman@lawsocietysa.asn.au Member Services Manager Michelle King michelle.king@lawsocietysa.asn.au Director (Ethics and Practice) Rosalind Burke rosalind.burke@lawsocietysa.asn.au Acting Director (Law Claims) Grant Feary gfeary@lawguard.com.au Manager (LAF) Annie MacRae annie.macrae@lawsocietysa.asn.au Programme Manager (CPD) Natalie Mackay Natalie.Mackay@lawsocietysa.asn.au Programme Manager (GDLP) Desiree Holland Desiree.Holland@lawsocietysa.asn.au

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Wellbeing & Resilience: Survey reveals mental health challenges for SA lawyers – By Edwin Fah

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Young Lawyers: Premium Dinner a great success – By Mikayla Wilson & Meghan Fitzpatrick

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Risk Watch: Practitioners acting as Directors or Entrepreneurs – Professional Indemnity Issues Part 2

By Amanda Adamson

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Tax Files: Land Tax and the Primary Production Exemptions

By Bernie Walrut

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Members on the Move

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Gazing in the Gazette

THE BULLETIN Editor Michael Esposito bulletin@lawsocietysa.asn.au Editorial Committee A Bradshaw P Wilkinson S Errington D Sheldon J Arena D Weekley B Armstrong D Misell M Ford The Law Society Bulletin is published monthly (except January) by: The Law Society of South Australia, Level 10-11, 178 North Tce, Adelaide Ph: (08) 8229 0200 Fax: (08) 8231 1929 Email: bulletin@lawsocietysa.asn.au All contributions letters and enquiries should be directed to The Editor, The Law Society Bulletin, GPO Box 2066, Adelaide 5001.

Views expressed in the Bulletin advertising material included are not necessarily endorsed by The Law Society of South Australia.

No responsibility is accepted by the Society, Editor, Publisher or Printer for accuracy of information or errors or omissions.

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PRESIDENT’S MESSAGE

It’s incumbent on all of us to improve workplace culture REBECCA SANDFORD, PRESIDENT

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key focus during my Presidency this year has been the inquiry into sexual harassment in the legal profession, and the profession’s response to those findings. The (Acting) Equal Opportunity Commissioner’s comprehensive Report,1 released in April, was a sobering and confronting read. I acknowledge numerous media reports this year discussing sexual harassment have been triggering and painful for many people, and for many practitioners, the release of the Report was a difficult reminder of traumatising events. I remain exceptionally grateful to those who have bravely shared their experiences so that we can all better understand the problems faced by the profession in this area.

The Report unfortunately, and sadly as anticipated, reinforced findings from numerous surveys in recent years, including the Society’s 2018 survey.

Amongst other things, the Report confirmed that “harassment is indeed prevalent in this sector”, with 42% of practitioner survey respondents having experienced sexual or discriminatory harassment, including one-third who had experienced it more than once.

We inarguably have a problem with harassment in the legal profession, and it is well past time for this to end.

We may not be the only ones dealing with these issues, but there can be no more excuses for failing to ensure the profession is a safe, respectful, inclusive and supportive workplace. It is a privilege and an honour to be a legal practitioner and it is critical that having chosen to take on that responsibility, we each do our part to ensure the community’s trust in the profession can be maintained.

That includes holding ourselves, and each other, to the highest standards of behaviour. The public expects us, as noted

by Ms Halliday, to “serve as an exemplar for workplaces across our community”. The Report demonstrates we have not yet met that expectation in this respect.

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The Report makes it clear that the problem and its solutions sit at an organisational and a cultural level, and action is needed at various levels and by multiple bodies, institutions and individuals, to ensure change happens and sticks. As noted in the Report, “although it is frustrating and disappointing that this scourge persists in our profession, these are the very workplaces that can – and should – lead change in this area and there are already definite signs of improvement».”

The profession is complex and multifaceted and it stands to reason that there will not be a single quick fix solution. It will take concerted ongoing effort by everyone - solicitors, barristers, the judiciary, universities, and everyone working in the justice sector - to make meaningful and long-lasting change, and we must all do our part. Uncomfortable as it is to accept, each of us in the profession has contributed (though often unintentionally) in some way to the current state of affairs. The good news, though, is that means each of us can similarly contribute to positive change. We are all representatives for the profession and responsible for its culture, and everyone needs to take ownership of this issue.

Individual action Ruth Bader Ginsberg said: “real change, enduring change, happens one step at a time”, and it is often true that big cultural shifts occur through numerous small acts by individuals, leading to notable ‘tipping points’. Just a few ideas for individual action include: • Undertake bystander training. Arrange it for your workplace. Talk to colleagues and friends about what you have learned, and practice using active bystander frameworks.

• Regularly review workplace policies and procedures - ensure they are clear, accessible, and include confidential and robust complaint reporting processes.

Ensure induction training is led by

• •

•

•

senior practitioners so junior employees understand that commitment to appropriate standards of behaviour comes from the top. Run regular update sessions for all employees.

Use, and encourage use of, external complaint and support mechanisms to address serious conduct.

Call out inappropriate behaviour where you see it and it is safe for you to do so. Bystander tools can assist. This can be done by anyone and is especially important for those in leadership roles, whose behaviour guides that of the organisation. Where possible, do this respectfully, empathetically and having regard to the support needs and wishes of those subjected to the inappropriate conduct.

Make briefing and client engagement choices which reflect, and reinforce, a commitment to prioritising workplace safety.

Reflect on your own behaviour and commit to learning and changing where needed, including to better support colleagues and friends in the profession who have experienced harassment.

The Society’s Next Steps The Society has been committed to doing its part to address sexual harassment and encourage positive cultural change in the profession for some time.2 I want to particularly acknowledge important work done to that end by many trailblazing women lawyers in South Australia, including past President Amy Nikolovski, who made this issue a focus during her presidency. The Society will continue to maintain attention on this topic throughout, and beyond, 2021 - we remain strongly committed to helping eradicate unacceptable conduct in the profession and ensuring we can all be safe and respected in our workplaces.

Without limiting steps the Society may take, the Council recently resolved to focus

PRESIDENT’S MESSAGE

the Society’s work and resources in this area in the near future on education, model policies and procedures for law practices, and developing a judicial appointments policy. The Council considers the Society is well-placed to make a strong contribution to these areas of key relevance, to which it is particularly suited.

In June the Society introduced a culture change workshop specifically addressing sexual harassment. In the first week the program was available (free to all legal practitioners), the Legal Profession Conduct Commissioner and I delivered that training online to over 750 lawyers in South Australia, with more sessions available in August, and later in 2021.

Though it is impossible to cover every element of this issue in one training session, our hope is this workshop will help practitioners better understand the environment in which we operate and how certain cultural traits have contributed

to this problem, and leave individuals empowered to individually help to change the profession’s culture for the better.

The Society is contributing to development of a national Model Sexual Harassment Policy, currently the subject of consultation by the Law Council, and I look forward to sharing that work with the profession later this year. We will also build on the work undertaken nationally to develop a Judicial Appointments Policy for the Federal courts and will consider, and as appropriate advocate for, introduction of a similar policy in SA. I encourage Members to participate in upcoming engagement around these areas of work.

Call to Action It is time for the whole legal profession to collectively commit to rejecting harassment in all forms. It’s reassuring to see change already underway, but we must continue to be proactive to embed

respect, transparency and inclusivity in our collegiate dealings, and reinforce that there is absolutely no place for harassment in the profession (or any workplace). To quote Sheryl Sandberg, Facebook COO “we cannot change what we are not aware of, and once we are aware, we cannot help but change”. It’s now on all of us to act to improve the current position. What contribution will you make? B Endnotes 1 https://www.eoc.sa.gov.au/documents/FinalReport-of-the-Review-of-Harassment-in-theSouth-Australian-Legal-Profession.pdf 2 The Law Society of South Australia, Submission to Acting Commissioner for Equal Opportunity, South Australia, Independent Review into Harassment in the Legal Profession, (12 February 2021); The Law Society of South Australia, Submission to Acting Commissioner for Equal Opportunity, South Australia, Independent Review into Harassment in the Legal Profession, (18 February 2021).

Profession rises to meet challenges of lockdown MICHAEL ESPOSITO, EDITOR

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write this article with an eerie sense of déjà vu. South Australia is in the grip of a lockdown and I am back at the dining table, attempting to be a productive worker while also refreshing my Year 3 fractions knowledge and keeping an eye out for signs of creative home decorating as styled through the eyes of a five-year-old.

No doubt all of us dealt with our own unique and personal challenges during the lockdown.

The Law Society has received a number of questions from Members that echoed those asked at the beginning of the pandemic early last year and during the November 2020 snap lockdown – is the practice of law an essential service? Can affidavits be signed in lockdown? What should lawyers advise clients with shared parenting arrangements?

By now, much of the profession would have experience in working during lockdown conditions, and will have had processes in place to transition to a remote work set-up. But even with finely honed crisis actions plans in place, it still does not completely alleviate the anxiety, uncertainty and complexity of delivering legal services, particularly to vulnerable clients, during a lockdown.

It is important for practitioners to remember that, during periods of heavy restrictions, they still need to comply with their statutory and professional obligations, even if they need to adapt some of their usual practices in meeting their obligations.

Practitioners should also note that support is at hand. If you have any questions about how you can comply with your obligations in particular

circumstances, you can contact the Society’s Ethics and Practice Unit for guidance.

Similarly, if you have any uncertainty about meeting your obligations to the administration of justice, you can contact the Court (and the other party in relevant circumstances) to ask for direction on how to proceed.

The legal profession has shown incredible resilience and industriousness in adapting to the shifting sands of the pandemic, and the commitment of the profession to serving and protecting their clients is to be commended.

Whatever challenges arise, I have no doubt the profession will rise to meet them.

And please remember, the Law Society is always there to provide support. Visit our webpage or COVID-19 hub for information on numerous support services. B August 2021 THE BULLETIN

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CORPORATE RESPONSIBILITY

Is the legal industry complicit in climate change? How Sharma has turned the heat up on lawyers’ responsibilities BRYNN O’BRIEN, EXECUTIVE DIRECTOR, AUSTRALASIAN CENTRE FOR CORPORATE RESPONSIBILITY

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ustralia is getting hotter. The continued buildup of carbon dioxide, methane and other greenhouse gases in the Earth’s atmosphere, due to human activities, primarily the extraction and burning of fossil fuels for energy, is driving global temperatures up.

In April this year, carbon dioxide reached a critical record: at a concentration of 420 parts per million, we are halfway to a doubling of pre-industrial levels.

The International Energy Agency told us in May this year that exploring for new fossil fuels in 2021 is fundamentally incompatible with a safe climate.

From 8 July 2021, it is the law of the land in Australia that the Minister for the Environment: “has a duty to take reasonable care, in the exercise of her powers …to avoid causing personal injury or death to persons who were under 18 years of age and ordinarily resident in Australia at the time of the commencement of this proceeding arising from emissions of carbon dioxide into the Earth’s atmosphere.”

(Sharma v Minister for the Environment [2021] FCA 774, per Bromberg J) The Sharma decision is indeed groundbreaking, but to anyone paying attention it cannot be a surprise. It comes as the harms of climate change become increasingly obvious, and more easily attributed to corporate emissions, and follows years of legal opinions on the theme of corporate and directors’ responsibilities for companies’ climate impacts. A 2019 opinion warned of the risk of litigation, which in the authors’ view was “increasing, probably exponentially, with time”. It is fair to say that this particular risk is now material for Australia’s corporate greenhouse polluters, in ways that may continue to take form.

To put it another way, given the way Sharma illuminates the Minister’s duty, it is

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reasonable to entertain the prospect that there are other classes of persons and other classes of decision-makers to whom a similar relationship, and by extension duty, can be constructed.

For example, does the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA), Australia’s independent regulator for all offshore oil and gas operations, owe such a duty, and to whom?

If NOPSEMA decision-makers fail to take into account and appropriately weigh the harm their licence-granting activities may have on children and future generations, have they acted unlawfully?

Sharma will loom large in the practices of Australian lawyers advising companies that extract (or facilitate the extraction of) coal, oil and gas, for the immediate future. The decision has implications for project, asset and company valuation, and corresponding impacts on corporate disclosure obligations and directors’ duties.

While the Minister has signalled her intention to appeal the decision to the Full Federal Court, companies will be reckoning with what is at stake for their businesses, and their lawyers will be advising them on how to deal with the precarity of planned fossil fuel projects.

On one view, the common law, through the court, has seen fit to intervene to restore sense when the national political rhetoric and debate has become too removed from the reality of the science and its frightening predictions. The legal profession must now wrestle with the question of whether it has a duty, albeit a philosophical one, to follow the court’s lead.

It is also time to grapple with some of the assumptions underpinning commercial legal practice. Commercial lawyers have, to a large extent, advanced the side of polluting industries. The Sharma case was run by a small firm, Equity Generation

Lawyers. The Minister was represented by the Australian Government Solicitor, while the solicitors on the record for Vickery Coal, a subsidiary of ASX-listed Whitehaven, were Ashurst.

This dynamic is familiar in public interest litigation in Australia, especially where corporate interests are involved.

A small firm, community legal centre or NGO represents David, and a top tier player represents Goliath. But in 2021, this power dynamic is increasingly anachronistic.

The fossil fuels industry is often compared to the tobacco industry, and lawyers who protected the industry, despite the known harms of the product, have rightly been judged on their conduct.

But this analogy has little relevance to the issue of climate change. Lawyers for the tobacco industry could avoid smoking cigarettes. They could represent an industry doing harm and not experience that harm themselves.

To put it simply, the commercial legal industry has never been required to respond to systemic risk of the kind posed by climate change. None of us, not even big firm commercial lawyers, can escape its harms.

Climate change, as I often remind myself, means everything changes. But for the arid regions of Australia, a lot of what it means is heat.

The last time I was in South Australia, it was 48C. We crossed into South Australia on a day when the fire danger in the Flinders Ranges was described as “catastrophic”.

We wandered around towns where more than a handful of shops displayed signs saying they were “closed due to heat”. Heat is familiar to South Australians. But apparently not that kind of heat, and not for such an extended period of time.

As we pulled up in Port Pirie, it felt

CORPORATE RESPONSIBILITY

like we were in the set-up to a formulaic joke: an ex-commercial lawyer and an ex-advertising professional, both turned climate champions, pull into a regional industrial town. They lock themselves out of the car by mistake, as the temperature enters the high forties.

But we were in luck; it was early evening, and there was a cool change on its way. We took shelter in a nearby shopping centre and, as we waited for the RAA representative to arrive, the temperature dropped 10 degrees. I had never thought of 38 as a comfortable temperature, but after 48 it was a relief.

Thirty-eight seemed survivable, at least for a bit, whereas 48 did not. We thanked the diligent RAA rep for his help in prising open our little car, waited for the car to air out, and kept going.

Thirty-five degrees, as it turns out, is the temperature at which, from a medical perspective, the human body’s ability to cool itself through sweating becomes markedly less effective. A 2019 report

by The Australia Institute, based on data published by the Bureau of Meteorology and the CSIRO, found that, in Adelaide, “the average number of days over 35 could increase by 180% without strong climate policies, from historical averages of 17–19 days per year up to 50–51 days per year by 2090.”

None of us has to reach back far into our memories to have a glimpse of climate harm. Less than a year after my trip to South Australia but before the pandemic took hold, Australia caught fire. The devastation of these fires was felt acutely in South Australia, particularly on Kangaroo Island and in the Adelaide Hills. Ecological experts have told us that koalas are now severely under threat of extinction, and that the Great Barrier Reef is, we are told, very likely in a state of terminal decline. Across the country over the Black Summer people were

displaced from their homes. Thirty-five people lost their lives directly in the fires, with at least 400 more deaths from smoke inhalation and other fire-related causes.

As if this isn’t terrifying enough, our scientific agencies like the BOM and the CSIRO are telling us that, in 20 years’ time, the summer of 2019-2020 will very likely seem mild.

Although every major bank in the world still lends money to fossil fuel exploration, the long-term work of climate campaigners means that capital for coal, oil and gas exploration is getting harder to attract, and more expensive.

Climate awareness in the legal services industry, however, is nascent.

In most Australian jurisdictions, fossil fuels companies are major players in the economy. This means many law firms and many more lawyers are deeply embedded in the fossil fuels problem.

Big firm lawyers know how to cultivate relationships and practices to win work. It would be laughable to suggest that commercial law firms treat the perpetrators and the victims of climate change equally.

Law firms are not taking the victims of climate change out for long lunches.

It is unlikely that a First Nations community whose land a multinational oil company intends to frack will get representation from a major firm. Firms’ business development plans do not target communities of colour whose lives are disproportionately impacted by air pollution.

Commercial lawyers, by default, take the side of incumbency, of wealth of atmospheric pollution; in short, of those causing catastrophic climate change.

But lawyers’ principled refusal to facilitate the expansion of the fossil fuels industry would be a crucial step in constraining activities that will harm all of us.

In an interlocutory decision in the Sharma litigation, His Honour Justice Bromberg characterised climate change as “the greatest intergenerational injustice ever inflicted by one generation of humans upon the next.” His assessment of the children-litigants’ predicament was withering: “It is difficult to characterise in a single phrase the devastation that the plausible evidence presented in this proceeding forecasts for the Children. As Australian adults know their country, Australia will be lost and the World as we know it gone as well. The physical environment will be harsher, far more extreme and devastatingly brutal when angry. As for the human experience – quality of life, opportunities to partake in nature’s treasures, the capacity to grow and prosper – all will be greatly diminished. Lives will be cut short.

Trauma will be far more common and good health harder to hold and maintain. None of this will be the fault of nature itself. It will largely be inflicted by the inaction of this generation of adults, in what might fairly be described as the greatest inter-generational injustice ever inflicted by one generation of humans upon the next. (Sharma v Minister for the Environment [2021] FCA 560, per Bromberg J, at 293) I have argued in the Financial Times that there is a growing cohort of lawyers who are “deeply uncomfortable with the profession’s role in facilitating the expansion of the fossil fuel industry,” and that, in the very near future, “the best and brightest junior lawyers” will reject firms whose activities are incompatible with their safety.

It will not surprise me if a couple of the Sharma litigants, all aged under 18 at the commencement of the proceedings, choose to pursue a legal career. And what major law firm would want to alienate them, and their classmates, as graduates? B August 2021 THE BULLETIN

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FEATURE

Responsible Lending and Responsible Spending: What’s with the push to rollback consumer protection?

ALEXANDER MACKEY, LEGAL COUNSEL, HOMESTART FINANCE

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hen the precursor bill to the National Consumer Credit Protection Act 2009 (Cth) was introduced to parliament, commentators observed two notable features, namely the requirements for a lender to assess the suitability of the loan for the borrower, and the borrower’s ability to repay the loan.1 The sun was about to set on the first decade of the 21st century when Australia – having only been slightly grazed by the global financial crisis – realised there was no obligation to engage in responsible lending.

Consumer protection laws did exist before that point-in-time. The Uniform Consumer Credit Code and the general legal principles of unconscionable conduct, misleading and deceptive conduct and economic duress were available to help regulate the retail lending market.

However, the events of the period known as the global financial crisis shone a light into the banking and finance sector that revealed predatory lending, assetbased lending, low-doc and no doc loans, sub-prime and non-conforming loans and sub-optimal conduct by brokers and intermediaries.2 After the NCCP Act was introduced, consumer discontent with the banking and finance sector continued to grow. This discontent was then the catalyst for the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry which conducted its hearings in 2018 and delivered its final report in February, 2019. Interestingly, in his final report, Commissioner Hayne said this about the NCCP Act: “I am not persuaded that the NCCP Act’s framework for responsible lending to consumers needs change. The responsible lending issues identified during the Commission’s hearings will be resolved by banks applying the law as it stands.” 3

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One might be forgiven then for wondering why, in December, 2020, the Assistant Treasurer and Minister for Housing introduced the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020.4 A bill that amends the NCCP Act so that only activities involving small amount credit contracts and consumer leases will attract responsible lending obligations.5 In other words, if passed, the legislation will rollback responsible lending obligations that currently apply to home loan credit providers.

NATIONAL CONSUMER CREDIT PROTECTION ACT 2009 (CTH) The obligations credit providers owe to their customers are documented in the Australian Securities and Investment Commission Act 2001 (Cth),6 the Banking Code of Practice and the NCCP Act. This article focuses on the NCCP Act. The Act came into force on 1 January, 2011, ushering in the era of responsible lending obligations. The introduction of additional regulation was justified by the view that the consumer laws existing at the time were narrow, applicable only to a small number of situations and the alternatives of self-regulation, greater disclosure, and increased education were partial.7 There was of course opposition to reform. Counterarguments unsuccessfully raised issues of paternalism and the need for an emphasis on responsible borrowing, nevertheless, the prevailing wisdom was summarised as follows: “It is not disputed that it is important for consumers to educate themselves and make appropriate financial decisions. However, it must be remembered that there are groups of vulnerable and disadvantaged consumers who are incapable of protecting themselves financially.”8

The relevant provisions are found in Division 3 of the Act, where there is: • an obligation to assess whether the contract or credit limit increase is unsuitable for the consumer,9 • an expectation, in conducting the unsuitability assessment to make reasonable inquiries about (and take steps to verify) a consumer’s requirements, objectives, and financial situation,10 and • a direction given as to when a credit contract must be assessed as unsuitable, namely the consumer could not comply with the financial obligations under the contract, could only do so with substantial hardship or the credit contract does not meet the consumer’s requirements or objectives.11 The problem is that the Act is silent as to how a credit provider is to conduct the assessment.12 To add to the mystery, it has even been acknowledged that unsuitable loans do not necessarily result from a breach of responsible lending obligations.13 The emphasis is on the process not the outcomes.

In 2019, in the ‘wagyu and shiraz judgment’ (so dubbed for its reference to the decisions consumers may be expected to make about household expenditure after taking on a home loan),14 Perram J dismissed ASIC’s prosecution of Westpac for allegedly failing to have regard to customer’s declared living expenses in their loan applications. The Full Federal Court then dismissed ASIC’s appeal but was split (Middleton J, dissenting).15 The conclusion in both judgments was that ASIC had a tendency towards prescriptive requirements whereas the courts were inclined to hold that there was a real degree of flexibility.16

FEATURE

NATIONAL CONSUMER CREDIT PROTECTION AMENDMENT (SUPPORTING ECONOMIC RECOVERY) BILL 2020 The NCCPA (SER) Bill was introduced to the Federal Parliament in December, 2020 and was described to be: • part of the COVID-19 economic recovery plan, • deregulatory in nature with benefits for lenders and borrowers, • helpful in reducing the time and cost associated with obtaining credit, • offering greater flexibility to lenders in adhering to ‘prudent’ lending principles, • helpful to borrowers by giving reduced application times and relieving them of the need to provide information to lenders, • promoting a new framework for non-ADIs based on APRA’s current prudential standards for ADIs.17 The explanatory memorandum also claims that over time responsible lending obligations have revealed themselves to be burdensome and unnecessary processes on both lenders and borrowers.

It claims they are one-size-fits-all and overly prescriptive.18 This was not an issue identified in the Royal Commission19 and it is not made obvious which particular aspects of the obligations are intolerable.

Little detail is given about the new standards to be imposed on non-ADI credit contracts. However, they are explained to be system-level obligations as opposed to being focused on individual loans but will also “support risk-based lending that is attuned to the needs and circumstances of the borrower and credit product”.20 Confusingly, such a statement is not at odds with Westpac’s conduct in the ‘wagyu and shiraz’ litigation, which managed to avoid any criticism by the Federal Court at first instance and on appeal.

Despite the expressed view that the present obligations are overly prescriptive, the new non-ADI credit standards, as they are described, will prohibit non-ADI credit conduct unless the applicable systems, policies and procedures required by the standards are established, maintained, comply with the requirements in the standard and are documented in a written plan.21 This seems more prescriptive than the current regime.

Time will tell, but the present obligations22 seem on all fours with the stated purpose of these reforms especially since the courts appear willing to give these obligations a broad interpretation.

The economic argument does not seem persuasive either. The cost of borrowing is low23 and the housing market is evidently booming, yet there is a push to make credit not just easier to obtain but quicker. The writer is concerned that such conditions seem reminiscent of those which prompted the last financial markets melt-down, but hoping they are not. B

Endnotes 1 Jessica Tuffin, ‘Responsible Lending Laws: Essential Development or Overreaction?’ (2009) 9 Queensland U. Tech L. & Just. J 280, 281-282.

2 Ibid.

3 Commonwealth, Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Final Report (2019) vol 1, 116-117.

4 Commonwealth, House of Representatives, National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020, Second Reading Speech, Hansard p11029.

5 Explanatory Memorandum to the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020, p 3, 7.

6 See Division 2 – Unconscionable conduct and consumer protection in relation to financial services which includes the provisions on unfair contract terms.

7 Jessica Tuffin, ‘Responsible Lending Laws: Essential Development or Overreaction?’ (2009) 9 Queensland U. Tech L. & Just. J 280, 300 8 Jessica Tuffin, ‘Responsible Lending Laws.

Essential Development or Overreaction?’ (2009) 9 Queensland U. Tech L. & Just. J 280, 304.

9 National Consumer Credit Protection Act 2009 (Cth), ss 128 and 129.

10 Ibid, s 130 11 Ibid, s 131 12 Australian Securities and Investments Commission v Westpac Banking Corporation [2019] FCA 1244, para 5.

13 Ibid, para 4; and Australian Securities and Investments Commission v Westpac Banking Corporation [2020] FCAFC 111, para 4, per Middleton J. 14 See note 12, at para 76 Perram J said: “I may eat Wagyu beef everyday washed down with the finest shiraz but, if I really want my new home, I can make do on much more modest fare.”

15 Australian Securities and Investments Commission v Westpac Banking Corporation [2020] FCAFC 111.

16 A credit provider may assume that a customer will adjust their spending habits in order to make their loan repayments. See notes 14 and 15.

17 Explanatory Memorandum to the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020, p 3-11. Essentially both ADIs and non-ADIs will be relieved of responsible lending obligations, ADIs will remain subject to the purely prudential regulatory framework in the Banking Act 1959 and non-ADIs will receive a new risk-based framework based on similar obligations to be made by the Minister. The Bill is still before the Federal Senate.

18 Explanatory Memorandum to the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020, p 8.

19 See note 3 20 Explanatory Memorandum to the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020, p 9, 10 and 19.

21 National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020 (Cth) Schedule 1, item 67, sections 133 EB and 133EC. 22 Those in Division 3 of the National Consumer Credit Protection Act 2009 (Cth).

23 The Reserve Bank of Australia’s Cash Rate Target is 0.10% as at 2 June 2021 https://www.rba.gov.au/statistics/cash-rate/ viewed 27 June 2021.

August 2021 THE BULLETIN

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PROFESSIONAL ETHICS

Tips to avoid breaching the 'no-profit' rule WERNER VAN WYK, DEPUTY DIRECTOR, ETHICS AND PRACTICE

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awyers should check their retainer agreements to ensure that they do not contain provisions which breach the “no profit rule”. The following is a very brief overview of the no profit rule and what practitioners need to do to ensure that they do not breach it.

The lawyer-client relationship is a fiduciary one in which the lawyer is bound by certain obligations or duties. One of those duties is that the lawyer must not profit from the fiduciary position (see ASIC v Citigroup (2007) 62 ACSR 427 at 289).

This includes receiving benefits or profits which came about as a result of the fiduciary relationship. If the fiduciary (the lawyer) makes a profit by virtue of the role as fiduciary, the fiduciary must inform the principal about this profit and obtain the principal’s consent before keeping it. If the principal’s informed consent is not obtained, the subject profit may be considered to be held by the fiduciary on constructive trust for the principal, and thus is payable to the principal on their authority.

Money or benefits that are received by a lawyer as a reward for referring a person or entity to someone else is a clear example of where the no profit rule would be breached unless the client’s informed consent to the lawyer retaining that fee or benefit is obtained (Australian Solicitors’ Conduct Rule 12.4.3).

Gaudron and McHugh JJ in Breen said the following: In this country, fiduciary obligations arise because a person has come under an obligation to act in another’s interests. As a result, equity imposes on the fiduciary proscriptive obligations – not to obtain any unauthorised benefit from the relationship and not to be in a position of conflict. If these obligations are breached, the fiduciary must account for any profits and make good any losses arising from the breach. But the law of this country does not otherwise impose positive legal duties on the fiduciary to act in the interests of the person to whom the duty is owed (54 (1996) 186 CLR 113).

However, the situation is more complex when considering what the client is being told that they have to pay their lawyer.

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In general, lawyers are only entitled to profit from the fiduciary relationship via the receipt of fair and reasonable fees in exchange for competent legal services. As long as those fees are properly disclosed to the client and the client has given their informed consent to those fees being retained by the lawyer, then the no-profit rule will not be breached.

Lawyers are also entitled to the reimbursement of reasonable expenses that are incurred in the course of the provision of competent legal services.

These include administrative items such as the cost of phone calls, fax, postage, copying and printing and legal disbursements such as counsel fees and the cost of obtaining expert reports.

Such charges that are passed on to the client must have been actually incurred by the lawyer and must not involve any profit or benefit to the lawyer. That is, the lawyer can only charge the client what the item cost the lawyer. In cases of doubt or ambiguity, the Supreme Court Scale provides a sound basis for many of the administrative charges associated with the provisions of legal services.

Where lawyers tend to err, is where they charge clients fees for non-legal services such as opening of files, attending on trust transactions or even for administrative actions by non-lawyers.

The imposition of such fees raises two issues: Firstly, such fees may be deemed to not be fair and reasonable and are therefore vulnerable to being set aside by the courts - particularly so if they relate to time spent in the satisfaction of administrative functions and/or statutory obligations as referred to above.

Secondly, such fees may offend the no profit rule and may therefore constitute a breach of a fiduciary duty.

The only way a lawyer is able to escape liability for a breach of a fiduciary duty is if the conduct was undertaken with the fully informed consent of the client to whom the duty is owed. The client can only give informed consent if there is full disclosure by the fiduciary to the client of all material facts and information that could affect the decision to give the consent.

It is validly argued that the role of contract in setting the parameters of fiduciary obligations is evidentiary in nature. One of the ramifications of such a view is the idea that informed consent is effectively the same as contracting out of your ordinary fiduciary obligations. Both concepts involve a voluntary variation of the terms of the fiduciary relationship.1 This would accordingly involve the lawyer providing to the client a detailed explanation of the basis for the fee and why it is fair and reasonable under the circumstances, and also informing the client that the charging of the fee constitutes a breach of the fiduciary duty which requires their consent.

Finally, it is worth noting her Honour’s observations in Modtech Engineering Pty Ltd v GPT Funds Management Holdings Ltd (No. 2) [2013] FCA 1163 where she said the following: First, it should be recognised that a lawyer’s hourly rate includes a component for the fixed overheads of the firm. Those overheads will ordinarily include, inter alia, the costs associated with utilities bills, internal printing and photocopying, information technology systems and employee wages. In the absence of any specific agreement to the contrary, it is inappropriate for lawyers to seek to “doubledip” by charging clients for those overhead costs as disbursements.

Secondly, costs of an unusual sum or nature are not allowed as between solicitor and client unless they have been authorised by the client after full disclosure, including the fact that they might not be allowed as between party and party: see, by way of example, Re Blyth and Fanshawe (1882) 10 QBD 207 at 210 and 212 and Dal Pont GE, Law of Costs (3rd ed, LexisNexis Butterworths, 2013) at [5.26]- [5.32].

If you want to know more about this subject, or you want help with reviewing your retainer agreement please do not hesitate to contact Ethics and Practice at the Law Society. B Endnotes 1 Daniel Reynolds, ‘The merely evidentiary role of contracts in ascertaining the scope of fiduciary obligations’ (2020) 48 Australian Bar Review 386

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FEATURE

AUSTRALIAN BUSINESSES MUST JOIN TO ERADICATE MODERN SLAVERY DR JACOBA BRASCH QC, PRESIDENT, LAW COUNCIL OF AUSTRALIA “It is a confronting reality that even in the present day, men, women and children all over the world remain victims of modern slavery.

They are bought and sold in public markets, forced to marry against their will and provide labour under the guise of “marriage,” forced to work inside clandestine factories on the promise of a salary that is often withheld, or on fishing boats where men and boys toil under threats of violence. They are forced to work on construction sites, in stores, on farms, or in homes as maids.

Labour extracted through force, coercion, or threats produces some of the food we eat, the clothes we wear, and the footballs we kick. The minerals that men, women, and children have been made to extract from mines find their way into cosmetics, electronics, and cars, among many other products.”1

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ccording to experts, there are more people enslaved today than at any other time in history - roughly 13 million people were captured and sold as slaves between the 15th and 19th centuries,2 whereas the most recent, reliable data available estimates that 40.3 million people3 are living in some form of modern slavery, 70% of whom are women and girls.4 For Australia, the Walk Free experts estimate 15,000 people are living in modern slavery,5 but alarmingly add a rider that the prevalence estimates for various countries, including ours, are likely higher than previously understood.6 However, many Australian businesses are unaware of the risk of slavery in their business or supply chain – for example, in 2019, Australian retailers Target and Cotton On ceased sourcing cotton from China’s Xinjiang province, following an expose by ABC’s Four Corners.7 Walk Free also note: even in countries with seemingly strong laws and systems, there are critical gaps in protections for groups such as irregular migrants, the homeless, workers in the shadow or gig economy, and certain minorities. These gaps, which are being

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actively exploited by criminals, need urgent attention from governments.8 Thus, in 2018, the Commonwealth enacted the Modern Slavery Act 2018 (Cth), which came into force on 1 January, 2019. It established mandatory Reporting Requirements for businesses with a revenue of $100M and above.9 Those under that threshold can voluntarily report.10 In turn, the Law Council of Australia, guided by its Business and Human Rights Committee, has collaborated with the Association of Corporate Counsel and released a fact sheet to help businesses understand their reporting requirements under the Modern Slavery Act 2018 (Cth). It is available on the Law Council website.11 There is no doubt that taking action to combat modern slavery makes good business sense. Businesses that take action to combat modern slavery in their operations and supply chains are protecting themselves against possible business harm while improving the integrity and quality of their supply chains.12 They can also increase profitability, investor confidence and access to financing opportunities.13 Whether a mandatory or voluntary reporter, a ‘modern slavery statement’ is submitted to the Minister, via a publicly accessible registry on the Australian Border Force’s website.14 The modern slavery statement must: • identify the reporting entity; • describe the structure, operations and supply chains of the reporting entity; • describe the risks of modern slavery practices in the operations and supply chains of the reporting entity, and any entities that the reporting entity owns or controls; • describe the actions taken by the reporting entity and any entity that the reporting entity owns or controls, to assess and address those risks, including due diligence and remediation processes;

• describe how the reporting entity assesses the effectiveness of such actions; and • describe the process of consultation with any entities the reporting entity owns or controls, and any entity with which it is issuing a joint modern slavery statement; and • include any other information that the entity giving the statement considers relevant.15 The statement must be given to the Minister within six months after the end of the reporting entity’s reporting period (usually its financial year), in a manner approved by the Minister.16 However, the drafting of such a statement should not be the starting point of working to eradicate modern slavery.

Instead, all businesses should be continually assessing and addressing any modern slavery risks.17 This includes the implementation or enhancement of sound governance and policy frameworks which should be cross functional and include, legal, procurement, compliance and risk, with all business units involved in the process.18 Also critical for any business is building awareness of what modern slavery is in practice and how it may be relevant to a particular business or organisation. Yet it is not just the principal organisation that has to consider this, but also those who procure finished goods, use contractors, hold events, provide food and supplies, or invest in the business.19 They must all examine their activities and supply chains to evaluate risk.

Further, entities within the corporate group, and external organisations such as suppliers, unions, contractors, and other stakeholders also should be consulted.20 A risk assessment and response process, along with due diligence on modern slavery risks, would include mapping key parts of the organisation’s operations and supply chain, as well as the organisation’s investment portfolio.

There may be a need to amend contract

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terms and codes of conduct with business partners and suppliers. Expectations should be clearly communicated, and processes established to monitor the effectiveness of the steps taken to ensure that modern slavery is not occurring in the business or supply chains. There may also be a need to collate or audit current policies to identify gaps and formulate new policies as needed, such as a human rights policy.21 Entities need to develop processes to enable remediation if they identify that they have caused or contributed to modern slavery. This may take the form of a grievance mechanism through which people can raise concerns about the impact an entity is having on them.22 It is important that grievance mechanisms are accessible through multiple reporting channels (email, phone etc) that account for cultural/linguistic barriers, and that the contact person is trained in identifying modern slavery.23 The impact of COVID-19 on victims of modern slavery has been dire,24 with modern slavery victims in danger of infection through unsafe accommodation, at the mercy of ‘employers’ who no longer need their labour because of supply chain disruption, or in the case of domestic workers made invisible to the outside world through lockdowns and isolation. The Australian Government has stated that ‘now more than ever, it is vital that entities continue to take action to combat modern slavery risks in their global operations and supply chains and report on these actions through their modern slavery statements.’25 While COVID-19 has increased the risks of modern slavery occurring globally, it has also created additional challenges for reporting as businesses move quickly to find new supply chains.

For businesses that have been impacted by COVID-19 and need to (or opt to) report under the Act, the Australian Border Force has developed a Guidance Tool.26 This tool outlines key

actions entities can take to reduce the risk of vulnerable workers in their operations and supply chains becoming exposed to modern slavery because of COVID19.

The Law Council, led by its Business and Human Rights Committee, continues to work closely with the government in support the implementation of the Act as a member of the Australian Government’s Modern Slavery Expert Advisory Group, as well as a participant in the National Roundtable on Human Trafficking and Modern Slavery convened by the Australian Government. This includes engaging on how businesses can best respond to their broader distinct responsibilities to respect human rights, as set out in the United Nations Guiding Principles on Business and Human Rights 2011.27 While many Australian companies may be unaware that modern slavery practices are occurring in their supply chains or businesses, whether in Australia or elsewhere in the world, ignorance is no longer an excuse. Instead, by managing and reporting on the risks of modern slavery in their operations and supply chains, reporting entities based, or operating in Australia, are now joining the international effort to eliminate modern slavery, while also protecting themselves from serious legal, reputational, operational and financial risks of being connected with modern slavery.28 B Endnotes 1 https://www.globalslaveryindex.org/2018/ findings/global-findings/.

2 See https://www.slavevoyages.org/assessment/ estimates as cited by https://www.theguardian. com/news/2019/feb/25/modern-slaverytrafficking-persons-one-in-200.

3 As at 2016. https://www.globalslaveryindex. org/2018/findings/global-findings/ (2018).

4 https://www.globalslaveryindex.org/2018/ findings/global-findings/.

5 https://www.globalslaveryindex.org/2018/data/ country-data/australia/.

6 https://www.globalslaveryindex.org/2018/

findings/executive-summary/.

7 https://theconversation.com/four-cornersforced-labour-expose-shows-why-you-might-bewearing-slave-made-clothes-115462.

8 https://www.globalslaveryindex.org/2018/ findings/executive-summary/.

9 Modern Slavery Act 2018 (Cth) s 5.

10 Modern Slavery Act 2018 (Cth) s 6.

11 https://www.lawcouncil.asn.au/ publicassets/535b277c-f3d5-ea11-9434005056be13b5/Modern%20Slavery%20 Factsheet%20Final%20-%20July%202020.pdf.

12 https://www.homeaffairs.gov.au/criminaljustice/Pages/modern-slavery.aspx.

13 Ibid.

14 https://modernslaveryregister.gov.au.

15 Modern Slavery Act 2018 (Cth) s 16.

16 Modern Slavery Act 2018 (Cth) ss 13(2)(e) and 14(f)(i).

17 See Commonwealth Modern Slavery Act ‘Guidance for Reporting Entities’ (2018) 26.

18 See https://www.lawcouncil.asn.au/ publicassets/535b277c-f3d5-ea11-9434005056be13b5/Modern%20Slavery%20 Factsheet%20Final%20-%20July%202020.pdf.

19 See https://www.lawcouncil.asn.au/ publicassets/535b277c-f3d5-ea11-9434005056be13b5/Modern%20Slavery%20 Factsheet%20Final%20-%20July%202020.pdf.

20 Ibid.

21 See https://www.lawcouncil.asn.au/ publicassets/535b277c-f3d5-ea11-9434005056be13b5/Modern%20Slavery%20 Factsheet%20Final%20-%20July%202020.pdf.

22 See Commonwealth Modern Slavery Act ‘Guidance for Reporting Entities’ (2018) 47-48.

23 Ibid.

24 https://www.sydney.edu.au/content/dam/ corporate/documents/faculty-of-science/ research/physics/covid-and-mordernslavery.pdf. See also https://www.ohchr. org/EN/NewsEvents/Pages/DisplayNews. aspx?NewsID=26246&LangID=E. 25 https://minister.homeaffairs.gov.au/jasonwood/ Pages/government-extends-reporting-deadlines. aspx.

26 https://www.homeaffairs.gov.au/about-us/ our-portfolios/criminal-justice/peoplesmuggling-human-trafficking/modern-slaveryact-coronavirus.

27 https://www.ohchr.org/documents/ publications/guidingprinciplesbusinesshr_en.pdf.

28 See https://www.lawcouncil.asn.au/ publicassets/535b277c-f3d5-ea11-9434005056be13b5/Modern%20Slavery%20 Factsheet%20Final%20-%20July%202020.pdf.

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FEATURE

A Decade on from the Guiding Principles on Business and Human Rights (UNGPs): Is consensus still lacking?

RAFFAELE PICCOLO, HUMAN RIGHTS COMMITTEE

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his year marks 10 years since the release of the Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework (UNGPs).1 While but another example of “soft law”,2 the UNGPs remain a significant instrument in efforts to address the impact of business activity on human rights. First, the UNGPs created an “authoritative focal point” that had otherwise been lacking in this area of concern.3 And secondly, the release of the UNGPs heralded an outbreak in activity (“a wave of lawmaking and standardsetting”) in efforts to address the impact of business activity on human rights.4 Notable among the wave of lawmaking are the various state legislative initiatives which impose “human rights due diligence” obligations upon business entities.5 These legislative initiatives typically require business entities to report and disclose efforts made (if any) to address the impact of business activity on human rights. The “indirect” aim of such legislative initiatives is to cause business entities to take action to address those impacts.6 Examples include the Modern Slavery Act 2015 (UK), the Duty of Vigilance Law (France), and the Modern Slavery Act 2018 (Cth).

This article will briefly consider the background to the release of the UNGPs, before outlining the notable legislative initiatives that states have adopted in furtherance of the UNGPs. This article concludes that a decade on from the UNGPs, consensus is still lacking on how to effectively address the impact of business activity on human rights.

PROTECT, RESPECT AND REMEDY: A FRAMEWORK FOR BUSINESS AND HUMAN RIGHTS The origin of the UNGPs is the work of the Special Representative of the

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Secretary-General on the issue of human rights and transnational corporations and other business enterprises (SpecialRepresentative). In 2009 the Special Representative proposed “a common conceptual and policy framework, a foundation on which thinking and action can build” to address the impact of business activity and human rights.7 The framework developed, referred to as “protect, respect, and remedy”, comprised of three core principles: 1. the State duty to protect against human rights abuses by third parties, including business; 2. the corporate responsibility to respect human rights; and 3. the need for more effective access to remedies.

The three core principles were described as complementary to each other; each principle supported each other principle in achieving sustainable progress.8 Release of the UNGPs At the request of the Human Rights Council of the United Nations (‘Human Rights Council’), the Special Representative was then tasked with operationalising the framework.9 The UNGPs are the culmination of that task.10 In June 2011, the Human Rights Council endorsed the UNGPs.11 The UNGPs clarified that business entities have a responsibility to respect human rights, and that this responsibility requires business entities to exercise “human rights due diligence”. In this regard, “human rights due diligence” refers to the processes undertaken to identify, account, prevent and mitigate the impacts of business activity on human rights.12 The more notable examples of states implementing such “human rights due diligence” are considered in turn below.

CALIFORNIA TRANSPARENCY IN SUPPLY CHAINS ACT OF 2010 13 It is unclear whether the California Transparency in Supply Chains Act of 2010 (CTSCA) formed part of the wave of lawmaking that succeeded the UNGPs; the CTSCA was developed and adopted in the intervening period between the announcement of the framework (“protect, respect, and remedy”) in 2009, and the release of the UNGPs in 2011.

Nevertheless, the significance of the CTSCA cannot be overlooked in the activity of the past decade. The CTSCA set a precedent, upon which others have drawn, in the implementation of the UNGPs.14 Commencing in 2012, a business entity (retailers and manufacturers) doing business in the state of California, which has annual worldwide gross receipts that exceed US$100 million, must report on the efforts of the business entity to eradicate slavery and human trafficking from the direct supply chain of the business entity for tangible goods offered for sale.

Reports must be made on an annual basis.

A business entity must disclose the extent to which the business entity engages in verifications and audits of suppliers, the internal control mechanisms in place, and training offered to staff. The exclusive remedy for non-compliance with the obligation to report and disclose is for the Attorney-General to seek injunctive relief.

NON-FINANCIAL REPORTING DIRECTIVE (EUROPEAN UNION)15 Adopted in December, 2014, a business entity (referred to as “Large undertakings which are public-interest entities”) that has on average in excess of 500 employees during the financial year must include in the management report of the business

FEATURE

entity a non-financial statement. The non-financial statement must set out the impact of the business entity on respect for human rights (and other matters, such as environmental, social and employee matters, anti-corruption and bribery).

The non-financial statement must include information regarding the business model, policies and due diligence process implemented in relation to respect for human rights, the outcomes of those policies, principal risks related to respect for human rights, and non-financial key performance indicators.16 Where a business entity does not pursue policies in relation to one or more of those matters, the nonfinancial statement must “provide a clear and reasoned explanation for not doing so.”17 More recently, the European Commission adopted a proposal for a Corporate Sustainability Reporting Directive.

Relevantly, if adopted, the proposal would (a) extend the scope of the reporting requirements to all “large companies and all companies listed on regulated markets (except listed micro-enterprises)”, (b) require audit of the information reported, and (c) introduce “more detail reporting requirements”.18

MODERN SLAVERY ACT 2015 (UK) From October, 2015, a business entity (wherever incorporated) which carries on a business, in any part of the United Kingdom, supplies goods or services, and has a total turnover of not less than the amount prescribed by regulation (currently £36 million),19 must prepare a slavery and human trafficking statement for each financial year.20 A slavery and human trafficking statement must outline the steps the business entity has taken during the financial year to ensure that slavery and

human trafficking was not taking place in any of the supply chains of the business entity, and in any part of the business entity.21 The slavery and human trafficking statement may include information about the structure of the business, policies and due diligence processes in place, parts of the supply chains where there is risk of slavery and human trafficking and the steps taken to assess and manage that risk, and training available to staff.22 If a business entity has not taken any such steps, then the statement should state that the business entity has not taken any steps.23 The duties imposed upon business entities are enforceable by the Secretary of State bringing civil proceedings in the High Court for an injunction (or, in Scotland, for specific performance of a statutory duty).24 A business entity which fails to comply with an injunction will be in contempt of a court order, and liable to punishment of a fine of an unlimited amount.

DUTY OF VIGILANCE LAW (FRANCE)25 Commencing from 2017,26 a business entity incorporated or registered in France that either, employs at least 5,000 people (including through French subsidiaries), or employs at least 10,000 people (including through subsidiaries located in France and abroad) must establish, and implement, a vigilance plan. The vigilance plan and a report on the implementation of the vigilance plan must be publicly disclosed on an annual basis, and included in the annual management report of the business entity.

The vigilance plan must set out mechanisms to identify and mitigate against violations of human rights and fundamental freedoms, severe bodily or environmental damage, or health risks resulting directly or indirectly from the activities of the business entity (including business entities controlled

by the business entity, and subcontractors and suppliers). The vigilance plan must include processes for regular evaluation of subsidiaries, subcontractors and suppliers, actions to mitigate risk and prevent severe impacts, alert and whistleblowing mechanisms, and mechanisms for monitoring and assessing the effectiveness of the measures implemented.

Initially, the law provided for a civil penalty of up to €10 million where a business entity failed to establish, publish, or effectively implement, a vigilance plan, and a penalty of up to €30 million where the failure resulted in harm or injury. The Constitutional Court of France found this aspect of the law unconstitutional, and thus null and void.27 If a business entity fails within three months after having received notice to comply with the obligation to establish, implement, or publish, a vigilance plan, any person with “legitimate interest” can apply to a court for an order directing the business entity to comply. The business entity is also liable to a periodic penalty payment.28 In the event that a breach of the obligation results in harm or injury, the business entity can be held liable, and will have to compensate for the harm that proper fulfilment of the obligations (to establish, publish, or effectively implement, a vigilance plan) would have avoided.29

MODERN SLAVERY ACT 2018 (NSW) This Act is yet to come into force. A business entity that has employees in New South Wales, supplies goods and services for profit or gain, and has a total turnover in a financial year of not less than $50 million, must prepare a modern slavery statement. A modern slavery statement must be prepared for each financial year of the business entity.30 August 2021 THE BULLETIN

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FEATURE

A modern slavery statement must outline the steps taken by the business entity during the financial year to ensure that its goods and services are not a product of supply chains in which modern slavery is taking place. This may include information about the structure of the business entity, supply chains, due diligence processes in place, parts of business and supply chains where there is a risk of modern slavery taking place and the steps taken to assess and manage that risk, and training available to employees.31 A business entity is liable to a penalty of up to 10,000 penalty units ($1,100,000)32 if the business entity fails to prepare, or publish, a modern slavery statement.33 A person is liable to a penalty of up to 10,000 penalty units if a person provides information in connection with the preparation of a modern slavery statement that the person knows, or ought reasonably to know, is false or misleading in a material particular.34

MODERN SLAVERY ACT 2018 (CTH) From 1 January, 2019,35 a business entity that has an annual consolidated revenue of at least $100 million, and is based or operating in Australia, must give to the Minister a modern slavery statement.36 A modern slavery statement must describe the structure, operations and supply chains of the business entity, the risks of modern slavery practices in the operations and supply chains, actions taken to address modern slavery practices, including due diligence and remediation processes, and the manner of assessing the effectiveness of such actions.37 If the Minister is reasonably satisfied that a business entity failed to comply with the requirement to give to the Minister a modern slavery statement, the Minister may give a written request to the business entity to do either or both of the following: (a) provide an explanation for the failure to comply, or (b) undertake specified remedial action in relation to that requirement. If the Minister is reasonably satisfied that a business entity failed to comply with any such written request, the Minister may publish, the identity of the entity, the details of the explanation or remedial action requested, and the reasons why the Minister is satisfied that the entity failed to comply with the request.38

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CHILD LABOUR DUE DILIGENCE ACT (NETHERLANDS)39 Adopted in 2019 (and likely to come into force in mid-2022) a business entity that sells or supplies goods or services to Dutch consumers, no matter where the business entity is based or registered, must investigate whether the goods or services the business entity offers have been produced using child labour. A business entity must implement due diligence measures to assess whether there is a “reasonable suspicion” that child labour is present in the supply chain or activities of the business entity, and where such a suspicion exists, must design and establish an action plan to prevent and mitigate against the risks of child labour.

The business entity must also submit a disclosure statement to the relevant regulator affirming that the business entity has exercised an appropriate level of supply chain due diligence in order to prevent child labour.40 A person may file a complaint with a business entity alleging non-compliance with the law. If the business entity does not resolve the alleged non-compliance within six months, then the regulator may intervene, and issue a direction ordering the business entity to comply. Failure to comply with the direction may result in fines, or additional penalties. Noncompliance with the obligation to submit a declaration can result in a fine of up to €4,350. Failure to implement adequate due diligence measures, or an appropriate plan to prevent child labour in the supply chains of the business entity, can result in a fine of up to €870,000, or if such a fine is not deemed appropriate, a fine of up to 10% of the turnover of the business entity. In addition, a company director is liable to punishment by imprisonment for up to two years if a business entity receives two fines for breaching the law within five years.41 As of March, 2021, consideration is being given to a similar law, the Bill for Responsible and Sustainable International Business Conduct. The Bill proposes to replace the Child Labour Due Diligence Act, to impose a duty of care on all business entities that are either registered in the Netherlands (subject to certain criteria), or sell products or services to Dutch consumers, to prevent negative impacts on human rights (and the environment, including the climate) in the supply chains of the business entity.42

DIVERGING APPROACHES These state legislative initiatives have markedly different approaches to “human rights due diligence”. The approaches differ in terms of the: (1) size of the business entity (to which the “human rights due diligence” obligations apply); (2) frequency of reporting; (3) nature of the obligations; and (4) means of enforcement.

The size of the business entity encompassed ranges from any and every business entity which sells or supplies goods or services to a local consumer (regardless of where the business entity is based or registered) (Child Labour Due Diligence Act (Netherlands)), to those which have a certain number of employees (Duty of Vigilance Law (France), Non-Financial Reporting Directive (European Union)), to only those which meet a certain annual income threshold (CTSCA, Modern Slavery Act 2015 (UK), Modern Slavery Act 2018 (NSW), Modern Slavery Act 2018 (Cth)).

Of the examples considered, other than the Child Labour Due Diligence Act (Netherlands), most legislative initiatives require a business entity to report on an annual basis.

The nature of the obligations varies considerably. From a mere requirement to report on efforts (if any) to address human rights impacts identified in supply chains (CTSCA, Non-Financial Reporting Directive (European Union), Modern Slavery Act 2015 (UK)), Modern Slavery Act 2018 (NSW), Modern Slavery Act 2018 (Cth)), to requiring business entities to act (implementing plans) to prevent or mitigate identified risks (Duty of Vigilance Law (France), Child Labour Due Diligence Act (Netherlands)).

The former relies upon potential damage to reputation to encourage business entities to address any negative impacts of business activity on human rights.43 Finally, the means of enforcement range from publication of non-compliance (Modern Slavery Act 2018 (Cth)) to injunctions (CTSCA, Modern Slavery Act 2015 (UK)), fines (Modern Slavery Act 2018 (NSW), Child Labour Due Diligence Act (Netherlands), Duty of Vigilance Law (France)), and imprisonment (Child Labour Due Diligence Act (Netherlands)).

The responsibility of commencing enforcement action also varies, from government authorities, to private citizens (Duty of Vigilance Law (France), Child Labour Due Diligence Act (Netherlands)).

FEATURE

Despite the diverging approaches of states, one should not overlook the continued efforts for a uniform approach to addressing the impact of business activity on human rights (in the form of a single legally binding international instrument).44 However, such a proposal is not without controversy.45

CONCLUSION The lack of consensus as to the implementation of the UNGPs is evident in the markedly different approaches and legislative initiatives of states to “human rights due diligence”. However, one must acknowledge that the authors of the UNGPs never intended to settle such differences.46 What do these Guiding Principles do?

And how should they be read? Council endorsement of the Guiding Principles, by itself, will not bring business and human rights challenges to an end. But it will mark the end of the beginning: by establishing a common global platform for action, on which cumulative progress can be built, step-by-step, without foreclosing any other promising longer-term developments.47 A decade on, the next challenge is to harness that same energy and focus that lead to the creation of the UNGPs, and to build consensus around how to effectively eradicate, prevent, and remedy the negative impacts of business activity on human rights. B Endnotes 1 Human Rights Council, Human rights and transnational corporations and other business enterprises, 17th sess, 33rd mtg, Agenda Item 3, A/HRC/ RES/17/4 (6 July 2011, adopted 16 June 2011) (‘Human rights and transnational corporations and other business enterprises’); John Ruggie, Report of the Special Representative of the Secretary General on the issue of human rights and transnational corporations and other business enterprises, 17th sess, 33rd mtg, Agenda Item 3, A/HRC/17/31 (21 March 2011) (‘Report of the Special Representative (2011)’).

2 “Soft law” is any material that is not intended, or capable of, generating legal rules, or imposing legally binding obligations. Such materials include declarations, resolutions, and guidelines, adopted by international organisations, or assemblies of States: Stephen Hall, Principles of International Law (LexisNexus Butterworths, 3rd ed, 2011) 72 [1.202-4].

3 But see Ruggie, Report of the Special Representative (2011), A/HRC/17/31 (n 1) 3 [5]; John Ruggie, Report of the Special Representative of the Secretary General on the issue of human rights and transnational corporations and other business enterprises, 8th sess, 28th mtg, Agenda Item 3, A/HRC/8/5 (7 April 2008) 4 [5] (‘Report of the Special Representative (2008)’).

4 Steven Ratner, ‘Introduction to the Symposium on Soft and Hard Law on Business and Human Rights’ (2020) 114 AJIL Unbound 163, 163.

5 Throughout this article the term “business entity” is used in a neutral sense. The term refers to all types of entities which might engage in any type of business activity.

6 Margaret Cusenza and Vivienne Brand, ‘“A Tiger Without Teeth”? the Forthcoming Review of the Modern Slavery Act 2018 (Cth) and the Place of “Traditional” Penalties’ (2021) 38 Company & Securities Law Journal 152, 153 (‘A Tiger Without Teeth?’).

7 Ruggie, Report of the Special Representative (2008), A/HRC/8/5 (n 3) 4 [8].

8 Ibid 4-5 [9].

9 Human Rights Council, Mandate of the Special Representative of the Secretary General on the issue of human rights and transnational corporations and other business enterprises, 8th session, 28th mtg, A/HRC/ RES/8/7 (18 June 2008).

10 Ruggie, Report of the Special Representative (2011), A/HRC/17/31 (n 1).

11 Human Rights Council, Human rights and transnational corporations and other business enterprises, A/HRC/RES/17/4 (n 1).

12 The report of the Working Group on the issue of human rights and transnational corporations and other business enterprises, 73rd sess, Agenda Item 74(b), UN Doc A/73/163 (16 July 2018) 3 [2].

13 SB 657, Steinberg. Human trafficking.

14 See, eg, Modern Slavery Bill Evidence Review, Establishing Britain as a World Leader in the Fight Against Modern Slavery (16 December 2013) 32-5; United Kingdom, Parliamentary Debates, House of Commons, 4 November 2014, vol 587, col 687 (Karen Bradley).

15 Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups [2014] OJ L 330/1 (‘NonFinancial Reporting Directive’).

16 See also Guidelines on non-financial reporting (methodology for reporting non-financial information) [2017] OJ C 215/1.

17 Non-Financial Reporting Directive (n 15) art 1(1).

18 “Sustainable finance package”, European Commission (Communication, 21 April 2021) <https://ec.europa.eu/info/publications/210421sustainable-finance-communication_en>.

19 Modern Slavery Act 2015 (Transparency in Supply Chains) Regulations 2015 (UK).

20 Modern Slavery Act 2015 (UK), s 54(1)-(2).

21 Ibid s 54(4)(a). See also, ‘Statutory Guidance: Transparency in supply chains: a practical guide’, UK Government (Statutory Guidance, 20 April 2020) <https://www.gov.uk/government/ publications/transparency-in-supply-chains-apractical-guide/transparency-in-supply-chains-apractical-guide>.

22 Modern Slavery Act 2015 (UK), s 54(5).

23 Ibid s 54(4)(b).

24 Ibid s 54(11).

25 Loi 2017-399 du 27 mars 2017 relative au devoir de vigilance des sociétés mères et des entreprises donneuses d’ordre.

26 Sandra Cossart, Jérôme Chaplier and Tiphaine Beau De Lomenie, ‘The French Law on Duty of Care: A Historic Step Towards Making Globalization Work for All’ (2017) 2(2) Business and Human Rights Journal 317, 317 (‘The French Law on Duty of Care’).

27 Anna Triponel and John Sherman, ‘Legislating human rights due diligence: opportunities and potential pitfalls to the French duty of vigilance

law’, International Bar Association (Web Page, 17 May 2017) <https://www.ibanet.org/Article/Detail. aspx?ArticleUid=E9DD87DE-CFE2-4A5D9CCC-8240EDB67DE3>; Cossart, Chaplier and De Lomenie, ‘The French Law on Duty of Care’ (n 26) 321.

28 “periodic penalty payments” are fines payable on a daily or per-event basis until the business entity complies with the obligation, see, Stéphane Brabant and Elsa Savourey, ‘France’s Corporate Duty of Vigilance Law: A Closer Look at the Penalties Faced by Companies’ (2017) 50 (December) International Review of Compliance and Business Ethics 1, 1.

29 Sarah A. Altschuller and Amy K. Lehr, ‘The French Duty of Vigilance Law: What You Need to Know’, Global Business and Human Rights (Web Page, 3 August 2017) <https://www. globalbusinessandhumanrights.com/2017/08/03/ the-french-duty-of-vigilance-law-what-you-needto-know/>.

30 Modern Slavery Act 2018 (NSW), s 24(1)-(2).

31 Ibid s 24(4)-(5).

32 Crimes (Sentencing Procedure) Act 1999 (NSW), s 17 (“a reference in any Act or statutory rule to a number of penalty units (whether fractional or whole) is taken to be a reference to an amount of money equal to the amount obtained by multiplying $110 by that number of penalty units”).

33 Modern Slavery Act 2018 (NSW), s 24(2), (6).

34 Ibid s 24(7).

35 Modern Slavery Commencement Proclamation 2018 (Cth).

36 Modern Slavery Act 2018 (Cth), ss 4-5, 12-13.

37 Ibid s 16.

38 Ibid s 16A. 39 Wet Zorgplicht Kinderarbeid.

40 Daniel Sharma and Franz D. Kaps, ‘Human Rights Due Diligence Legislation in Europe - Implications for Supply Chains to India and South Asia’, DLA Piper (Publication, 26 March 2021) <https://www.dlapiper.com/en/us/ insights/publications/2021/03/human-rightsdue-diligence-legislation-in-europe/>; Julianne Hughes-Jennett and Steven Minke, ‘Dutch Child Labour Due Diligence Law’ Hogan Lovells (Blog, 8 July 2019) <https://www.hlregulation. com/2019/07/08/dutch-child-labour-duediligence-law/>.

41 Ibid.

42 Joseph Wilde-Ramsing, Manon Wolfkamp and David Ollivier de Leth, ‘The Next Step for Corporate Accountability in the Netherlands: The New Bill for Responsible and Sustainable International Business Conduct’, NOVA Knowledge Centre for Business, Human Rights and the Environment (Web Page, 18 March 2021) <https:// novabhre.novalaw.unl.pt/new-bill-for-responsiblesustainable-international-business-conductnetherlands/>.

43 Cusenza and Brand, ‘A Tiger Without Teeth?’ (n 6) 153.

44 Human Rights Council, Elaboration of an international legally binding instrument on transnational corporations and other business enterprises with respect to human rights, 26th sess, 37th mtg, UN Doc A/HRC/ RES/26/9 (26 June 2014).

45 Human Rights Council, Report on the sixth session of the open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights, 46th sess, Agenda item 3, UN Doc A/HRC/46/73 (14 January 2021) 6 [27].

46 Ruggie, Report of the Special Representative (2011), A/ HRC/17/31 (n 1) 5 [13]-[16].

47 Ibid 5 [13].

August 2021 THE BULLETIN

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FEATURE

Responding to the iceberg illusion: Businesses’ responsibilities to assess and address climate risks NICOLE MEAD, SENIOR ASSOCIATE, DMAW LAWYERS AND MEMBER OF THE PLANNING, ENVIRONMENT, AND LOCAL GOVERNMENT COMMITTEE The iceberg illusion is a phenomenon whereby only a small part, or tip, of a much larger problem is perceptible.

More and more businesses are gradually coming to terms with the fact that the consequences of climate change are far greater than they may appear, and they have a duty to figuratively and literally address the iceberg risk. Nicole Mead provides an overview of business obligations to report on the financial risks of climate change.

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limate change continues to move into the boardroom as the obligation on Australian businesses to consider and report on climate risks becomes increasingly clear.

A growing number of recommendations and guidelines mean that in order to not be left behind, businesses need to actively consider and report on climate risks, despite this not yet being a legal requirement. The consequences of failing to take these steps include reputational damage, litigation or shareholder resolutions forcing change.

CLIMATE CHANGE AND DIRECTORS’ DUTIES Any legal obligation for businesses to consider and report on climate impact has historically been unclear in the Australian legal framework. However, in recent years, expectations on businesses have developed

18 THE BULLETIN August 2021

to a point where there are indications that directors’ duties extend to a positive obligation to consider and report on climate risks.

Although this expectation is not yet reflected in legislation or case authorities, the Australian legal system is now at a tipping point where the obligation for businesses to report on and consider climate risks is on the cusp of extending to become a legal requirement (either statutory or in common law), rather than being primarily based in the principles of voluntary corporate social responsibility.

The most obvious place for this to occur is through an extension of existing directors’ duties to encompass consideration and reporting of climate risks. An opinion first published in October 2016 by Noel Hutley SC and

Sebastian Hartford-Davis on directors’ duties and climate change suggests this has already occurred. Hutley and Hartford-Davis opined that climate change is a foreseeable risk which can represent risks of harm to the interests of Australian companies, and that directors can and should be taking into account climate change and related economic, environmental and social sustainability risks, where those risks are, or may be, material to the interests of the company1.

Two updates have been published in March 2019 and April 2021, in which Hutley and Hartford-Davis have clarified their opinion in light of the “profound and accelerating shift in the way that Australian regulators, firms and the public perceive climate risk”.2 Against that background, they concluded that “regulators and investors now expect much more from companies than cursory acknowledgement and disclosure of climate change risks”3, placing emphasis on the necessity of directors not only understanding climate risks, but successfully conveying this to shareholders and the public4. Their most recent opinion goes so far as to say that in particular sectors, simply considering and disclosing climate-related risks and trends is not adequate; directors of listed

FEATURE

companies must also take reasonable steps to see that positive action is being taken5.

•

REGULATORY INFLUENCES AND VOLUNTARY GUIDELINES In circumstances where no case law exists, some guidance can be found from regulators and industry groups who are establishing frameworks around reporting and addressing climate risks. As this guidance is primarily in the form of voluntary regimes, the onus is on businesses to embrace corporate social responsibility and choose to adopt the recommendations.

One such piece of guidance is the amendment to Recommendation 7.4 of the ASX Corporate Governance Council’s Principles and Recommendations6 which, effective from 1 January 2020, recommends that ASX-listed companies (regardless of the industry in which it operates) disclose any material exposure to environmental or social risks, and how the company manages or intends to manage those risks.

•

•

Other similar guidance includes: the Task Force on Climate-related Financial Disclosures (TCFD), an international body linked to the G20, which first released in 2017 its climate-related financial disclosure recommendations7. As referred to below, many other organisations are adopting this standard; the Australian Accounting Standards Board and the Auditing and Assurance Standards Board published in December 2018 a voluntary guidance statement relating to climaterelated risks and financial statement accounting estimates8; ASIC has taken steps towards ensuring companies sufficiently report on climate risk, including confirming that it considers the law requires climate risk to be reported on where it is a material risk that could affect the company’s financial performance9, and uses the TCFD recommendations as a benchmark for reporting where a

•

material risk is identified; and in April 2021, APRA released to banks, insurers and superannuation trustees its draft guidance on managing the financial risks of climate change. This guidance is aligned with the TCFD recommendations and is expected to be finalised soon10.

MOTIVATIONAL CONSIDERATIONS In addition to these frameworks which encourage reporting on climate risk, there are three other key motivating factors for businesses to adopt an approach of corporate social responsibility and report on climate change.

First, one of the commonly cited motivations for businesses to embrace corporate social responsibility is the possibility of financial and reputational benefits. It is becoming increasingly important for businesses to be seen to be doing “the right thing”, especially given the increased popularity and focus on

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FEATURE

environment, social and governance issues.

As well as having the potential to improve a business’s reputation, reporting and taking action on climate change has potential to improve the business’s social licence, especially where it operates in an industry that is seen to have a negative impact on climate. These matters can positively affect the business’s bottom line.

Secondly, there is a risk of exposure to litigation if a business (or government) is seen to not be adequately reporting or acting on climate risk. Over time, there may also be penalties applied for this conduct.

Key examples of litigation relating to climate change in Australia have all occurred within the past 12 months and include: • McVeigh v Retail Employees Superannuation Trust (Rest), where a member of Rest superannuation fund sued Rest in the Federal Court, alleging the fund had not provided him with sufficient information related to climate change business risks to make an informed judgment about the management, financial condition and investment performance of his superannuation, and that Rest had breached its statutory duties to act with care, skill and diligence as a trustee by not having a more developed climate change policy. This case settled before the commencement of the trial, however Rest’s public statement, presumably as a part of that settlement, acknowledged climate change is a material, direct and current financial risk, and stated it would take further steps to ensure investment managers are taking active steps to consider, measure and manage financial risks posed by climate change11; • Sharma v Minister for Environment.

This class action was brought by a small group of high school students in the Federal Court to prevent the Minister from approving a coal mine expansion, the Vickery Extension Project, on the basis that to do so would breach a duty of care the Minister owes to young people in Australia. In his decisions in May and July 2021, Justice Bromberg did not grant the injunction sought, but acknowledged a duty of care owed by the Minister to the applicants. The Minister has announced an appeal.

These examples, together with the

20 THE BULLETIN August 2021

increasing number of international examples, indicate how courts may respond to climate change litigation in Australia and offers a starting point for similar cases to follow. The expectation appears to be developing that businesses must take an approach of embracing corporate social responsibility when dealing with climate change.

Finally, aside from the risk of climate change litigation, shareholder activism in relation to climate change action is increasingly prominent, where shareholders propose resolutions for consideration at the company’s annual general meeting. The resolutions sought are often for an amendment to the company’s constitution to permit shareholders to pass advisory resolutions, which resolutions have the effect of allowing shareholders to express a view about how they want the company to deal with particular issues12. There have also been examples internationally of shareholders using their power to vote in directors who are perceived to be better placed to address climate related issues13.

What this means for business Clearly, there is an obligation for businesses to report on material financial risks posed or created by climate change. It should also be expected that the regulatory framework and these obligations will only tighten over time. Further, it is not yet clear how, if at all, these obligations may extend to require businesses to take positive action against climate change, for example, by limiting emissions.

There is always a possibility the government will implement or amend legislation to address this uncertainty and provide clarity around the expectations on businesses. Similarly, an express obligation could be included in the ASX Listing Rules requiring particular reporting or action on climate change.

The matters outlined in this article demonstrate the necessity for reporting on climate change to genuinely embrace principles of corporate social responsibility and go beyond lip service, as the consequences of not properly reporting and communicating climate risk include legal action and/or shareholder action, as well as possible reputational damage.

As lawyers, we need to remember how expectations on businesses in relation to climate change are quickly changing,

and ensure our clients are aware of these expectations and the consequences of not addressing this matter of corporate social responsibility adequately. B Endnotes 1 Memorandum of Opinion from Noel Hutley SC and Sebastian Hartford-Davis to The Centre for Policy Development and Future Business Council, 7 October 2016 <https://cpd.org.au/wp-content/ uploads/2016/10/Legal-Opinion-on-ClimateChange-and-Directors-Duties.pdf> at [3].

2 Memorandum of Opinion from Noel Hutley SC and Sebastian Hartford-Davis to The Centre for Policy Development, 26 March 2019 <https:// cpd.org.au/wp-content/uploads/2019/03/ Noel-Hutley-SC-and-Sebastian-Hartford-DavisOpinion-2019-and-2016_pdf.pdf> at [4].

3 Ibid at [21].

4 Memorandum of Opinion from Noel Hutley SC and Sebastian Hartford-Davis to The Centre for Policy Development, 23 April 2021, <https://cpd. org.au/wp-content/uploads/2021/04/FurtherSupplementary-Opinion-2021-3.pdf> at [3].

5 Ibid at [4].

6 Australian Securities Exchange (ASX), ASX Corporate Governance Council’s Principles and Recommendations (at February 2019) <https://www. asx.com.au/documents/regulation/cgc-principlesand-recommendations-fourth-edn.pdf>.

7 Task Force on Climate-Related Financial Disclosures, Final Report: Recommendations of the Task Force on Climate-related Financial Disclosures (at June 2017) >https://assets.bbhub.io/company/ sites/60/2020/10/FINAL-2017-TCFDReport-11052018.pdf>.

8 Australian Accounting Standards Board and Auditing and Assurance Standards Board, Climaterelated and other emerging risks disclosures: assessing financial statement materiality using AASB/IASB Practice Statement 2 (April 2019, first published in December 2018) <https://www.aasb.gov.au/ admin/file/content102/c3/AASB_AUASB_Joint_ Bulletin_Finished.pdf>.

9 See, for example, ASIC, ‘Managing climate risk for directors’ (ASIC news article, February 2021) <https://asic.gov.au/about-asic/news-centre/ articles/managing-climate-risk-for-directors/>.

10 See APRA, Consultation on draft Prudential Practice Guide on Climate Change Financial Risks (22 April 2021), APRA <https://www.apra.gov.au/consultation-ondraft-prudential-practice-guide-on-climate-changefinancial-risks> and linked documents.

11 Rest Superannuation, Rest reaches settlement with Mark McVeigh (2 November 2020), Rest Superannuation <https://rest.com.au/why-rest/about-rest/news/ rest-reaches-settlement-with-mark-mcveigh>.

12 See, for example, Lloyd Freeburn and Ian Ramsay, An analysis of ESG shareholder resolutions in Australia, SSRN, 4 June 2021 <https://papers.ssrn.com/ sol3/papers.cfm?abstract_id=3859264>.

13 See, for example, Harry Robertson, ‘Oil majors Exxon and Shell face a climate-change rethink after “seismic’ green activist victories’, Business Insider (online) 27 May 2021 <https://markets. businessinsider.com/news/stocks/exxonmobilshell-chevron-total-activist-investors-climatechange-strategy-2021-5>.

A roundup of recent Society meetings & conferences ROSEMARY PRIDMORE, EXECUTIVE OFFICER 25 March 2021 South Australian Council of Social Service (SACOSS) resident, Bec Sandford and the Society’s Policy Coordinator, Nathan Ramos met with Ross Womersley, CEO and Catherine Earl, Policy Director of SACOSS to discuss and share information about the work being done by the Society and SACOSS on various matters including advocacy for the age of criminal responsibility to be raised from 10 to 14 years.

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4 May 2021 Meeting with the Equal Opportunity Commissioner Bec Sandford met with the Equal Opportunity Commissioner (EOC), Ms Jodeen Carney. Matters discussed included the EOC’s work in preparing a ‘placemat’ flyer to direct people in the profession to appropriate complaint bodies and support services relating to sexual harassment; the work of the Courts Administration Authority’s Respectful Behaviours Working Group; and the EOC’s intention to focus on providing informative publications.

7 May 2021 AULSS and Law Society of South Australia Law Dinner Bec Sandford attended the 2021 Adelaide University Law Students’ Society Law Dinner (sponsored by the Society) at the Intercontinental Ballroom and delivered a speech to prospective GDLP students.

26 May 2021 Law Council of Australia National Roundtable on Responding to Family Violence Bec Sandford represented the Society at a national roundtable on responding to family violence convened by the Law Council, with the Family Law Section. It aimed to develop key recommendations to inform the Law Council’s advocacy.

31 May 2021 Select Committee on the Statutes Amendment (Repeal of Sex Work Offences) Bill 2020 At the request of the Select Committee on the Statutes Amendment (Repeal of Sex Work Offences) Bill 2020, Bec Sandford

appeared for the Society, speaking to the Society’s submission in relation to the Bill.

30 May 2021 Meeting with SA Police (SAPOL) Bec Sandford and Craig Caldicott, Co-Chair of the Criminal Law Committee met with representatives of SAPOL, at the Society’s instigation, to discuss SAPOL’s position in relation to the use of intervention orders in domestic violence matters (including those involving coercive control).

17 June 2021 Meeting with AMA(SA) A meeting with the new President of the AMA(SA), Dr Michelle Atchison, and the CEO, Dr Samantha Mead was attended by Bec Sandford, Stephen Hodder and Michelle King, Manager (Member Services). The 2021 MedicoLegal Dinner, which is to be hosted by the AMA, was a topic of discussion.

25 and 26 June 2021 Quarterly meetings of Law Council (LCA) Directors, Conference of Law Societies, CEOs of Law Societies; and joint CEOs Bec Sandford (as President and also as Society appointed Director of the Law Council) and Stephen Hodder variously participated in the above quarterly meetings, which were held via videoconference. Key topics of discussion included a draft of a new Strategic Plan for the LCA; proposed family violence training for the profession, which is to be “strongly encouraged”; proposed amendments to Rule 42 of the Australian Solicitors’ Conduct Rules, “Anti-discrimination and harassment”, with further consultation to occur; the preparation of the National Profile of Solicitors report; a public relations campaign to promote the profession; bystander training in relation to sexual harassment; adoption of a Rural, Regional and Remote National Strategic Plan; and adoption of a Judicial Appointments policy (for Federal matters).

15 July 2021 Respectful Behaviours Working Group Further to a meeting of the Respectful Behaviours Working Group, at which

Bec Sandford represented the Society, the Chief Justice has asked each of the organisations represented on the Group (which he convenes) to record the progress they have made over the past 12 months or so with a view to the Group considering how the information could be published, as assurance to the public, law students and the profession that work is being done that demonstrates commitment to model the gold standard in safe and respectful workplaces.

6 May 2021 Regional visits - Port Lincoln – 6 May 2021 Bec Sandford and Stephen Hodder, Chief Executive met with and provided an update to practitioners practising in Port Lincoln (6 May 2021), Tanunda and Berri (27 May 2021) and Mount Gambier (12 July 2021). Matters raised

by Members included difficulties being experienced with requirements of SACAT and being able to appear, and the lack of right to representation in some matters; the inconvenience and expense caused to clients by the difference in the order of signing of Power of Attorney and Advance Care Directives documents, with a query as to how SACAT deals with ACDs where the order of signing is not in accordance with the prescribed order; the use of videoconference facilities forced by the pandemic restrictions was convenient and greatly appreciated and should continue on an ongoing basis; concern at lack of visits to Mount Gambier by the SACAT, SAET and Fair Work Commission and a desire for increased visits by the Federal Circuit Court; the need for a local Legal Services Commission office in Mount Gambier; a need for more legally aided children’s services in Port Lincoln; and a need for wellbeing support services for practitioners.

19 July 2021 Community Legal Centres (SA) At a meeting, Catherine McMorrine, Chair of CLCSA took the opportunity to advise Bec Sandford and Michael Esposito (Communications Manager) of the work being undertaken by the Community Legal Centres in SA and current challenges in the sector. B August 2021 THE BULLETIN

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WELLBEING & RESILIENCE

Perfectionism, excessive workloads and lack of senior support: Survey reveals mental health & wellbeing challenges for SA lawyers EDWIN FAH, JOHNSON WINTER & SLATTERY

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arlier this year, the Law Society conducted a survey of the State’s legal practitioners on their general levels of mental health and wellbeing. The questions contained in the survey were designed to mirror those of a similar survey conducted by the International Bar Association.

A more comprehensive comparison between the South Australian and International Bar Association results is intended to be the subject of a future Bulletin article. This article focuses on only a small part of the survey, exploring what impact employers of legal practitioners in South Australia have on their employees’ overall mental health and wellbeing, and issues arising from those results.

DEMOGRAPHICS There appears to be a view among some parts of the legal profession that wellbeing is a millennial indulgence and that the profession does not “engender any more stress than any other professional role”.

The results of the survey show that it is anything but that, as: • 58% of the survey respondents were aged 40 years or more; and • 62% of the survey respondents were senior practitioners, being partners/ directors or senior associates of law firms, Judges, barristers or in-house counsel.

LAWYERS IN SOUTH AUSTRALIA ARE DISPROPORTIONATELY UNHAPPY According to the most recent Household, Income and Labour Dynamics in Australia (HILDA) survey conducted by the Commonwealth Government’s Department of Social Services, 85% of those respondents stated that they were either satisfied or very satisfied with their

22 THE BULLETIN August 2021

current job, against only 2% who stated that they were dissatisfied.

By contrast, the results of the Survey make for confronting reading: • Less than 30% of respondents reported feeling positive about their role in the legal profession; • 47% of respondents stated that the legal profession has a negative impact on their overall wellbeing; • Over the past 2 years, almost 60% of respondents have considered leaving the legal profession entirely; and • In the last 12 months, almost 10% of respondents have either had suicidal thoughts or actually self-harmed as a result of their involvement in the profession.

The bottom line is this: a member of the general public is almost 3 times more likely to feel positively about their job than a South Australian legal practitioner, and that practitioner is almost 23 times more likely to actively dislike their job than a member of the general public.

But what is it about the legal profession that is causing this?

A number of common themes emerged from the written answers in the Survey, with the 4 most common reasons cited for the generally negative view of the profession by its participants, being: • Excessive workloads; • Billing pressures; • Toxic or unsupportive workplace culture; and • Perfectionism and competition.

WHAT ARE EMPLOYEES SAYING TO EMPLOYERS ABOUT IMPROVING WELLBEING? It is clear that wellbeing issues are still perceived as something to be hidden at work:

•

Almost half of the Survey’s respondents stated that if they did have a concern about their wellbeing at work, they would be disinclined to speak to their employer about it for fear that it may have a negative effect on their career and future work opportunities; • A quarter of respondents would not discuss wellbeing issues with their employer because of a lack of confidence (both in terms of confidentiality as well as effectiveness) of the reporting mechanisms; and • 10% of respondents would not raise wellbeing issues with their employer because they think they would simply not be believed.

An underlying theme that emerges from the survey responses is that employer-driven wellbeing programmes are viewed quite cynically. A number of those responses pointed out that whilst some workplaces had wellbeing programmes, these were simply superficial and exist purely so that the employers could win “pointless marketing awards” instead of taking substantive steps that would actually improve wellbeing.

In order to combat that, some respondents recommended that wellbeing issues could be de-stigmatised by more senior practitioners being open about their own issues and the mistakes they have made in the past. This would also seem to alleviate a number of concerns that senior management do not appear to take Wellbeing seriously.

A practical difficulty with making this a reality though is an interesting observation highlighted by a number of responses, that the legal profession seems to be made up of perfectionists (some responses also referred to narcissists and sociopaths) for whom the appearance of infallibility is all consuming.

One respondent suggested that the legal

WELLBEING & RESILIENCE

profession actively encourages colleagues to discredit and find fault with each other but that this could be stamped out by employers not prioritising and publicly praising a “win at all costs” approach.

However, the two most desired improvements the survey respondents want from their employers, is genuine mentoring and more realistic workloads.

In terms of mentoring, a common request was that employers should have a formal mentoring programme where junior practitioners are specifically assigned to a more senior practitioner and that regular catch ups be mandatory.

Others took a less hierarchical view and were in favour of a “buddy” system where new junior practitioners are buddied with a practitioner of a similar level who has been at that workplace longer.

Some respondents pointed out that mentoring and workloads are linked, as good internal mentoring by senior practitioners appears to lead to more realistic workloads for those mentored. A number of respondents made the point that excessive workloads are often not the product of business necessity, but of senior practitioners not taking the time to actually speak to their more junior colleagues and so they do not understand that some practitioners are busier than others.

As one respondent noted, some practitioners are placed in an invidious position because whilst they might be overworked, they do not want to turn down new work for fear of being thought of as less capable. For these practitioners, the choice seems to be between their wellbeing and their professional success.

EMPLOYERS ARE GENUINELY TRYING TO DO BETTER Despite these results, and although there is clearly much further to go, respondents to the survey recognise that their employers are taking some steps to address wellbeing issues.

Whilst 40% of respondents believe that their employers could do more in this space, 37% of respondents do not believe their employers could (or should) do more.

But it is the assessment of the effectiveness of steps taken by employers that might be surprising: of the survey participants, 33% of respondents consider that the steps taken by their employers are

effective, against only 26% that consider those steps to be ineffective.

Apart from being surprising, these numbers do not sit comfortably with the results in other parts of the survey.

For example, it is difficult to reconcile the results that say almost half of the respondents would not speak to their employer about Wellbeing issues because of a lack of faith in the process, yet only about a quarter of respondents consider those same processes to be ineffective.

Perhaps this is simply an indication that respondents’ perceptions about the effectiveness of employer-driven wellbeing programmes are inherently individualistic, and are not amenable to being generalised.

IS THERE ANOTHER COURSE? According to the Survey, 70% of respondents believe that non-work factors have a significant impact on their overall Wellbeing. In other words, even if they were not a part of the legal profession, negative wellbeing outcomes would still affect 70% of the profession.

To date, programmes to address wellbeing in the legal profession have been geared towards assisting practitioners to cope with the issues the profession throws up, whether this be overwork, lack of proper mentoring or a myriad of other obstacles.

But the elephant in the room is this: for some people, no amount of mentoring or support will turn their participation in the legal profession into a positive experience. For people who fall into this category, the truth may be that there is nothing an employer can do to improve their Wellbeing outcomes.

One Survey participant put it this way: “there are all these programs to improve work-life balance etc but very little to what I think is a core issue – the way lawyers are trained to think. This way of thinking (critically, all the time) has a huge impact on us for the rest of our lives. More is needed to educate people about whether a career in legal practice is right for them in terms of emotional and mental health, and given their personality”.

IF WE’RE ALL UNHAPPY, WHY DO WE STAY? It is clear from the survey that, as a whole, South Australian legal practitioners can’t be said to love what they do, and in fact, actively dislike it many times more than the rest of society dislikes their jobs.

So why do we stay?

Perhaps it is a product of our education, or the personalities of those drawn to it, but the legal profession, as a whole, does not appear to engender strong feelings in many of its participants.

One interesting result to emerge from the Survey is the general level of apathy in the legal profession. For example, almost 22% of respondents felt neutral about their role in the legal profession whereas less than 13% took a neutral view in the HILDA survey. When asked about the effectiveness of their employer’s responses to wellbeing issues, 24% of respondents felt that they were neither effective nor ineffective. When asked about whether employers should do more to assist employees deal with Wellbeing issues, 23% of respondents expressly declined to offer a view.

One respondent stated: “It is stressful managing priorities and client/employer expectations. But I don’t know what else I’d be doing if not law”.

In saying all of the above, it would be a disservice to the many respondents who expressed overwhelmingly positive feelings towards the profession, not to recognise their experiences.

A large number of respondents stated that they liked the intellectual nature of the profession, and that they had the opportunity to use their skills to help others, but that the pressure to meet billable hour targets, attend business development events, unreasonable client and employer expectations and, at least for the more senior practitioners, onerous professional compliance obligations, detracts from that experience.

Perhaps this provides a better explanation for the results of the Survey.

Perhaps it is the case that practitioners are genuinely torn between parts of the profession they really like, and parts they really don’t like, so overall consider their experiences to be neutral.

One inference from these results is that practitioners like the actual practice of the law, but dislike the business side of the profession. If that is true, it remains to be seen whether this divergence can be overcome, given that the profession appears to be moving closer to a “business” model, rather than further away.

August 2021 THE BULLETIN

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PROFILE

Vaccinating against mental health key to building wellbeing & resilience MICHAEL ESPOSITO

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notable feature of Premier Steven Marshall’s daily press conferences during the recent seven-day lockdown was the regular acknowledgment of the mental health challenges that many people would have faced during this period of enforced isolation.

The pandemic has seriously tested the resolve of all of us, intensifying the difficulty of our lives which are already exhausting and complex, without the addition of a global pandemic.

But what if we had the psychological tools to rise to any challenge that comes our way? To stave off mental illness by boosting our mental fitness?

VACCINATING AGAINST MENTAL ILLNESS At the start of the pandemic, most of the messaging was around the importance of good hygiene practices to prevent infection. Now we are talking about vaccination as the key to our roadmap out of the pandemic.

We should be thinking about mental health in a similar way, argues Gabrielle Kelly, who founded SAHMRI’s Wellbeing and Resilience Centre in 2014, now consulting on building psychological health and resilience, and who is our guest speaker at the Law Society’s legal Profession Dinner on 27 August.

She thinks it’s time for the psychological vaccination of the nation to help everyone cope with and thrive in ever-changing life and work.

Psychological hygiene, has in Gabrielle’s view, been a missing part of the conversation about mental health, but the tools have been developed not only for individuals to immunise themselves against some mental illness, but for industries and whole communities to be able to build psychological strength.

“Just as you can vaccinate yourself against physical illness you can vaccinate yourself against preventable mental illness, by building your mental strength, your resilience and your capacity to withstand, not only the normal challenges of life,

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but the unexpected ones, such as a global pandemic,” Gabrielle said.

“If we think about dental hygiene , Gabrielle explained, “we do prevention at the individual and systems level: individuals brush and floss their teeth and we add fluoride to the water system. I think we need to normalise psychological hygiene, so we can avoid some types of mental illness in individuals and that’s essentially what positive psychology is doing. It’s gathering the science of psychology and directing it towards people to help individuals and employees have higher wellbeing and more psychological capital.”

Gabrielle said that South Australia was now a world leader in “building wellbeing at scale”, largely thanks to the influence of Professor Martin Seligman, who was a Thinker in Residence in SA in 2012-13.

He is a former President of the American Psychological Association who decided to dedicate the rest of his life to preventing of mental illness through positive psychology.

When Gabrielle proposed a residency on psychological health and wellbeing to the State Government in 2012, it was viewed with suspicion; the general perception of “wellbeing” was as a kind of lightweight, feel-good, whimsical mantra.

“Wellbeing was seen as a women’s thing and maybe a yoga class, and you couldn’t really have a serious conversation about it. By suggesting this residency, I was trying to advance people’s understanding of the scientific evidence about the how and why of building wellbeing, in order to seriously engage with it. By linking the well-established science of wellbeing and resilience, we were able to make the case that building those capacities can help protect against some but not all, mental illness and will help build human resilience, in the face of challenges, such as we see now with COVID and climate impacts” she said.

Now, building wellbeing is a thing: it is acknowledged widely as useful and as Seligman put it: “It’s measurable, teachable and learnable”.

Gabrielle Kelly will be guest speaker at the annual Legal Profession Dinner

Seligman’s work with a powerful collaboration of local health and education leaders over 2 years, led Gabrielle to set up the Wellbeing and Resilience Centre within SAHMRI , kickstarting a world-first initiative to measure, build and embed wellbeing across the society, reaching thousands here, both in the community and in workplaces.

“That is now an advantage to us here.

With the advent of the June 2021, ISO 45003 Psychological Health and Safety at Work , there are new global guidelines for managing psychological injury risk at work.

The 2018 Australian Work Health and Safety Act has also created, for the first time, a national legislative obligation for industry to identify and manage psychological injury risk, so the stakes are high for all industry to make workplace wellbeing and the prevention of psychological injury a top priority. Add to this the $17 billion per annum impact of mental illness on absenteeism and presenteeism in the Australian workforce, then the proven positive impact of a psychologically healthy workplace on productivity, recruitment and retention, makes it a must have for business.”

PROFILE

BUILDING PSYCHOLOGICAL STRENGTH IS KEY TO PROBLEM SOLVING – AND PROFITABILITY Gabrielle’s interest in wellbeing and psychological health was piqued long before the phrase entered the mainstream lexicon. In the 1980s she had made two documentaries about climate change, after she was invited to film a global meeting of the Sundance Institute of Sustainable Development, which was convened by actor-director Robert Redford.

One of the main goals of Gabrielle’s film Greenbucks, was to bridge what was a hostile divide between environmental activism and the business community about the climate challenge.

Upon observing how world leaders have consistently failed to take positive action on climate change over 20 years, it occurred to her people needed to build their psychological capacity, in order to engage with climate change, and other difficult contemporary complex issues that need to be faced.

“It’s self-evident that it is useful for individuals to build their mental toughness and emotional strength; we all want that for our children and we all need that to succeed at work. But as our democracies unfold, we need psychologically healthy communities to solve problems without bloodshed or civil unrest, such as the attacks on the White House this year. Our democratic societies need to be able to step up to grapple with and come to sufficient agreement about, the ever-growing list of complex problems that we cannot escape,” Gabrielle said.

In a sector such as the legal profession, solving problems is a core business activity, and it goes without saying that practitioners are more effective problem solvers if they are operating at optimum psychological capacity.

The Society’s recent Mental Health Survey revealed that a significant number of SA lawyers are struggling with mental illness issues, triggered by factors such as excessive workloads, billing pressures, poor work culture and perfectionism.

Concerningly, 47% of respondents to the survey reported that being in the legal profession has had a negative impact on their overall wellbeing.

She says that while this is only marginally higher than the level of mental health challenges impacting many other industries, it is still a problem.

And here is the encouraging news – firstly, the methodology of successfully building psychological health in the workforce has already been developed and tested. Secondly, it’s fairly straightforward for workplaces to implement processes that will benefit staff wellbeing, thirdly, wellbeing can be measured and fourthly, these methodologies have been proven to increase profitability.

“If you invest in building psychological health and wellbeing of your workforce, you will reduce the cost of psychological injury claims dramatically, which are rising fast and are 8 times more costly than physical injury claims, at an average cost of $1.2 million per claim,” Gabrielle said.

“I think that law firms are going to need to ask themselves the question – how are we going to manage this risk in our small, medium and large businesses and into our justice system?”

Business leaders, Gabrielle said, should entrench wellbeing as a measurable indicator like other key performance indicators.

“Start with wellbeing measurement.

Once you put the measurement of psychological health into your normal business metrics that you use to drive your business, you’ve got the lever you need to create the logic to invest in straightforward, easy-to-deliver programs which will help build the psychological health of the staff and create a wellbeing culture over time. As with the introduction of OH&S, it’s a long-term commitment.”

“This is business-as-usual approach to drive profit and effectiveness: measure things that matter, take action to create change and track whether that change is working.”

Gabrielle said that SA boasts great universities, psychologists, and of course, the SAHMRI Centre, who can help businesses track the psychological health of workforces. SAHMRI offers a globally leading wellbeing technology platform, now called the “Be Well Tracker” which, with support from the State government, Gabrielle commissioned and developed, with her team of researchers and a solutions and enterprise architecture group, headed by Jan McConchie and delivered by Luca Gnezda and Taptu, over three years.

“CEOs and boards don’t need to be anxious about what to do,” Gabrielle assured. “The what to do has already been created, tested and published about. Lead, measure, build and embed wellbeing. Each business needs to add up what they’re spending on stress claims, on recruitment and retention, and do the sums on that.

There’s the money from the current budgets to invest on wellbeing to mitigate risk and ensure future productivity.”

BUILDING RESILIENCE: ANOTHER CAPACITY IN PSYCHOLOGICAL HEALTH When describing what it means to be resilient, Gabrielle deferred to Brigadier General (retired) Rhonda Cornum, a former US Army flight surgeon turned leading global resilience educator, who defines a resilient person as one who is physically fit, mentally tough and emotionally strong.

Gabrielle observed that the Society’s mental health and wellbeing survey seemed to indicate that the profession has largely recognised the importance of physical fitness to mental health, but the building of mental toughness and emotional strength were missing pieces of the puzzle.

“Resilient thinking skills are the go.

Emotional self-regulation, perseverance, mindfulness, good communication and connection skills, keeping the focus on what is going well and what is important, the ability to accept what cannot be changed and more acuity about out-moded bullying and gender biased behaviouranyone can learn these human skills”.

August 2021 THE BULLETIN

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PROFILE

Gabrielle said lawyers would greatly benefit from a better understanding of the risk factors that could lead to a deterioration of their own psychological state.

Just as we have to keep an eye on cholesterol levels and adjust our diets accordingly, so we need to really know the state of our mental health by measuring it, and recognise that some of our coping mechanisms, to handle stress for instance, which can include alcohol as a go-to response, are not helping. Learning better ways to deal with adversity, anxiety, bullying and heavy workloads, as well as understanding our individual personalities, is critical to building resilience in the legal profession.

“As the legal community informs itself with this recent survey about the risk factors of poor psycho-social health in

the profession and as it understands the legislative obligation, the next logical step is for both the individual to take action on their own behalf and for the profession to get systematic about building wellbeing in the workplace.” Gabrielle said.

A TWO-TIERED APPROACH TO BUILDING MENTAL HEALTH Gabrielle said that we need to make a distinction between treating mental illness and building mental health, that prevention of illness requires individual and organisations to do new things.

“How do you activate individuals to want to care about their psychological health and wellbeing? How do you activate the legal profession to be systematically interested in wellbeing in the workplace and how you do you activate the

community to want the same? These are important questions to answer if we want to be able to better handle the complex present and improve the functioning of the legal profession which affects our whole justice system. Ultimately this is important more generally, if we want to reduce domestic and gender violence, alcohol and drug abuse, recidivism and ultimately build a better future, together.

This is the purpose of the psychological vaccination of the nation.”

Not only will this make for more happier, healthier and more productive lawyers and their families, it will contribute to lifting our society away from the myopic, shallow discourse that leads to worst-best decision making, towards a more robust, resilient and healthy democracy that is better equipped to deal with the great challenges of our time. B

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• Puppy, kitten, dog and cat food (wet or dry) • Size 4 nappies • Tinned lentils, corn or fruit • Fruit nectar (canned) • Puppy pads • Small scissors • Fluorescent tape • Bird seed • Weetbix • Cat litter and bedding • Scratch posts • Head torches • Ledlenser torches • F10 disinfectant • All round worming and flea tablets • Herbivore Critta Care • 0.7 kangaroo or possum wombaroo milk powder • Late lactation koala milk powder • Impact supplement • Koala CrittaCare • Centrigen spray • Consumables such as postage stamps, envelopes, A4 paper, laminating pouches, Australia Post post satchels (inc. express post) The Law Society of South Australia, Lvl 10, 178 North Terrace, Adelaide

O’Toole Lawyers, Flinders House, Lvl 1, 65 Flinders Street, Adelaide

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A $2 tax deductable donation buys a THE BULLETIN August 2021 teat wombat

YOUNG LAWYERS

Premium Dinner a great success MIKAYLA WILSON, SEDSMAN LEGAL & MEGHAN FITZPATRICK, JONES HARLEY TOOLE

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he annual Young Lawyers’ Premium Dinner for 2021 was held on Thursday, 1 July 2021 at Lot 10 Cucina on Market Street. Following an excellent breakfast held there on 25 March 2021, we were looking forward to returning to the venue, swapping the bacon and eggs for lasagne and tiramisu. The intimate crowd of around 35 attendees enjoyed a night of networking, socialising and fantastic food; as well as a self-described “rambling, lighthearted” speech from our special guest, the Honourable Justice Samuel Doyle.

We were grateful to be able to host the dinner in light of the ever changing and recent COVID-19 news. Lot 10 Cucina were able to accommodate us to fit with the necessary restrictions, and upon entry guests were able to check in using Lot 10’s

QR code before being seated. Once seated, guests had the opportunity to network with those around them and enjoy their own individual antipasto platter.

Following mains, Justice Doyle gave an entertaining speech full of pearls of wisdom collected throughout his successful career. Justice Doyle reminded the young lawyers in attendance of the importance of developing your own portfolio of tricks of the trade in order to build the confidence to survive and thrive in any setting of the profession (despite the curveballs). Justice Doyle further encouraged us to see the silver lining of situations and the importance of maintaining a positive outlook. We were excited to hear of Justice Doyle’s foreshadowed book launch, to be titled “the Art of the Bluff ”, named as a homage to his

facebook.com/YLCSA hero’s seminal manuscript, which the writers understand will detail his Honour’s career at the independent bar and his journey to taking silk. On a more serious note, his Honour kindly donated several copies of Rachel Doyle SC’s recent publication titled “Power and Consent”, which book considers the important issue of sexual harassment in modern workplaces.

A special thank you to Justice Doyle for taking the time out of his busy schedule to offer his advice to young members of the profession.

The Young Lawyers’ Committee would also like to thank all of the attendees who supported the event and purchased all of the tickets; Lot 10 Cucina for hosting and for their excellent hospitality; as well as our major sponsor Burgess Paluch Legal Recruitment.

August 2021 THE BULLETIN

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RISK WATCH

Practitioners acting as Directors or Entrepreneurs – Professional Indemnity Issues Part II AMANDA ADAMSON, SENIOR SOLICITOR, LAW CLAIMS

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he July, 2021 edition of Riskwatch identified the risk that liabilities incurred while acting as a Substitute Decision Maker or pursuant to an Advance Care Directive under the Advance Care Directives Act 2013 will not be indemnified under the Legal Practitioners Professional Indemnity Insurance Scheme (PII Scheme).

It warned that the practitioner who accepts obligations pursuant to a Power of Attorney but who does not accept obligations as a Substitute Decision Maker should carefully identify the capacity in which they are instructed and limit their retainer accordingly.

The capacity in which a practitioner performs an act will affect the protection afforded by the PII Scheme in other ways.

This is because the touchstone of the operation of the PII Scheme is the connection with the Insured’s Legal Practice.1 Legal Practice is a defined term. It primarily means: “… the provision of such legal services as are usually provided by a legal practitioner in private practice in Australia, while holding a current practising certificate under the Act or a law of a State or Territory of the Commonwealth of Australia and entitled to practise thereunder including acceptance of obligations or trustee, executor, administrator, attorney under power, tax agent or notary public …”2 The central concept is legal services and these are to be distinguished from entrepreneurial activity. The Federal Court has said: “It has not been material to consider whether it is possible for the role of a professional advisor and the role of an entrepreneur properly to

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coincide or overlap, but the appearance of solicitors performing these respective roles in the present case leads me to invite attention to significant differences between the two functions. These differences … arise because the field of professional activity is co-extensive with a lawyer’s professional duty. That duty is to give advice as to the meaning and operation of the law and to render proper professional assistance in furtherance of a client’s interest within the terms of the client’s retainer… It is a duty which arises out of the relationship between lawyer and client.

But activities of an entrepreneur … [fall] outside the field of professional activity. Those activities are not pursued in discharge of some antecedent professional duty… and the promotion of a scheme in which particular clients may be advised to participate is pregnant with the possibility of conflict of entrepreneurial interest and professional duty.”3 Entrepreneurial activity remains entrepreneurial in nature even if peripheral legal services are provided. A Court will consider which of the legal services or the entrepreneurial activity is central to the activity in question. A Court is likely to find, that if legal services are only peripheral to entrepreneurial activity then the liability is not relevantly connected to Legal Practice.4 Particular attention is drawn to the practitioner who is appointed as a director of a company. Although it is well known and has been so for many years that some solicitors accept appointments to the boards of companies including blue chip public companies,5 acts performed in the capacity as company director are not regarded as Legal Practice

and liabilities incurred in this capacity fall outside the PII Scheme.6 Instructively for practitioners, the PII Scheme document casts a beam of light through the grey dividing line7 between Legal Practice and entrepreneurial activity. It should be observed any claim arising from acts or omissions undertaken (directly or indirectly) as a consequence of practitioner being a director is expressly excluded from the PII Scheme. Exclusion clause 16.5 provides that: “The Insured will not be indemnified including for Defence Costs, with respect to …

16.5.1 any Claim arising from acts or omissions as an insurance agent undertaken by any person associated with the Insured’s Legal Practice.

16.5.2 any Claim arising from acts or omissions undertaken (directly or indirectly) as a consequence of any Insured being a director or other officer of a body corporate other than a service administration or nominee company or trust, the sole business of which is conducted in connection with the Insured’s Legal Practice.

16.5.3 any Claim in connection with the participation in any respect whatsoever by any Insured in procuring, arranging or assisting with a money lending activity or transaction (with or without security) whether alone or in conjunction with any other person save only where that person’s involvement is as to provision of legal advice and/or drawing of documentation and matters reasonably incidental hereto.

RISK WATCH

16.5.4

any Claim in connection with any Insured providing a Financial Service in respect of which that person was required to be licensed or authorised under Chapter 7 of the Corporations Act 2001 (Cwth).

16.5.5 any Claim in connection with the provision be multi-disciplinary practice with which any Insured is associated of a service other than a legal service of the type usually provided by a legal practitioner in private practice in the jurisdiction.”

A Practitioner who accepts an appointment as a director of a company, whether commercial or not-for-profit,

should ensure that they are protected by adequate D&O (Directors and Officers) insurance and, depending on the circumstances, might cause a ‘nonretainer’ letter to issue from their Law Practice to ensure, for example, that the practitioners’ partners are not exposed to the implication of a retainer between the company and the practitioner director by virtue of the work being undertaken by the practitioner as a director.

Endnotes 1 Legal Practitioners Professional Indemnity Insurance Scheme, Schedule 2 Policy of Insurance, Clause 1.1.

2

3

4 5 6 7

Legal Practitioners Professional Indemnity Insurance Scheme, Schedule 4 Definitions and Interpretation, Clause 1.33(a) Solicitors’ Liability Committee v Gray and Anor (1997) 147 ALR 154 at 185 – per Beaumont, Burchett JJ quoting from Leary v Federal Commissioner Taxation (1980) 32 ALR 221 at 240 – per Brennan J Solicitors’ Liability Committee v Gray and Anor (1997) 147 ALR 154 at 168 – per Lockhart J Solicitors’ Liability Committee v Gray and Anor (1997) 147 ALR 154 at 164 – per Lockhart J Solicitors’ Liability Committee v Gray and Anor (1997) 147 ALR 154 Solicitors’ Liability Committee v Gray and Anor (1997) 147 ALR 154 at 165 – per Lockhart J. It has been said that “whether or not the dividing line is bright or blurred, the distinction has value”. (Malcolm Douglas Carr trading as Forshaws Neill v Swart & Ors [2007] NSWCA 337)

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TAX FILES

Land Tax and the Primary Production Exemptions BERNIE WALRUT, MURRAY CHAMBERS

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he Land Tax Act 1936 (SA) (LTA) provides land tax relief for land used in the business of primary production.1 However, it distinguishes between land used for primary production outside what is described as the defined rural area (DRA)2 and land within the DRA. Where the land is outside the DRA and used in the business of primary production it is exempt if a number of basic conditions are satisfied. In the case of land in the DRA, there are additional requirements to be satisfied before the relief is available.

One very recent decision of the Court of Appeal of Commissioner of State Taxation v Takhars [2021] SASCCA 58 and an earlier Full Court decision of Commissioner of State Taxation v T & S Liapis Pty Ltd [2021] SASCFC 152 now provide some guidance on a number of the requirements for the primary production business use relief, and in particular in respect of land in the DRA. Basic Requirement The basic requirements for the relief are that the land is not less than 0.8 hectare in area and the Commissioner is satisfied that the land is used wholly or mainly for the business of primary production.3 The business of primary production is also defined to mean the business of agriculture, pasturage, horticulture, viticulture, apiculture, poultry farming, dairy farming, forestry or any other business consisting of the cultivation of soils, the gathering in of crops, the rearing of livestock or the propagation and harvesting of fish or other aquatic organisms and including the intensive agistment of declared livestock.4

DRA Land If the land is within the DRA then one of the following six alternatives must be satisfied for the land to be exempt. The first is that a sole owner, who is a natural person must be engaged on a substantially full-time basis (either on their own behalf or as an employee)5 in a relevant business.

The second is that the land is owned jointly or in common by two or more natural persons at least one of whom is

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engaged on a substantially full-time basis6 in a relevant business and any other owner who is not so engaged is a relative of an owner so engaged. The third is where the land is owned solely, jointly or in common by a retired person, the retired person was, prior to his or her retirement, engaged on a substantially full-time basis7 in a relevant business and the co-owner or co-owners of the land (if any) are relatives of the retired person.

The fourth is that the land is owned solely or by tenancy in common by the executor of the will, or the administrator of the estate, of a deceased person, the deceased person was, prior to their death, engaged on a substantially full-time basis8 in a relevant business and a close relative of the deceased person is currently engaged on a substantially fulltime basis9 in a relevant business. The fifth is that the land is owned by a company, or by two or more companies, or by a company or companies and one or more natural persons, and the main business of each owner is a relevant business.

The sixth alternative is where the company is the owner of the land and one of three further requirements is satisfied.

A natural person owns a majority of the issued shares of the company and is engaged on a substantially full-time basis10 in a relevant business. The next is that two or more natural persons own in aggregate a majority of the issued shares of the company and each of them is engaged on a substantially full-time basis11 in a relevant business. The final requirement is two or more natural persons who are relatives own in aggregate a majority of the issued shares of the company and at least one of them is engaged on a substantially fulltime basis12 in a relevant business.

A relevant business is one in relation to land used for primary production if the business is a business of primary production of the type for which the land is used or a business of processing or marketing primary produce and the land or produce of the land is used to a significant extent for the purposes of that business.13

A person is a relative of another person if they are spouses or domestic partners, one is an ascendant or descendant of the other, or of the other’s spouse or domestic partner, one is a brother or sister of the other or a brother or sister of the other’s spouse or domestic partner or one is an ascendant or descendant of a brother or sister of the other or of the other’s spouse or domestic partner.14 A domestic partner of a person is a person who lives with the person in a close personal relationship.15

Liapis In Commissioner of State Taxation v T&S Liapis Pty Ltd16 the taxpayer owned 1.5 hectares in the Hills face zone on which it conducted an olive grove. It was contented by the taxpayer that the majority shareholder worked full time on the land of the company and that the company was engaged in the business of primary production. The olive production was described as low and generally the business was run at a loss, though it was expected that once the olive trees fully matured and full production is achieved, a profit would also be achieved.

The Commissioner disputed that the majority shareholder was engaged full time in a relevant business and the company was conducting a business.

The Commissioner submitted that the company was in effect engaged in a hobby. At first instance the trial judge found that the olive grove was conducted as a business,17 it was a matter of fact and degree.18 At first instance and on appeal the relevant factors as to whether the activity constituted a business were described as “a purpose of making a profit; repetition and continuity; the activity being conducted in an organised, businesslike or systematic manner; the size of the operation; and the activity being conducted in the same manner as recognised businesses”.19 In respect of the prospect of making a profit, it was said “that a prospect of making a profit is an indicia of a good or successful business, rather than an indica of a business simpliciter”.20

TAX FILES

Both the trial judge and the full court considered whether the majority shareholder was engaged on a substantially full time basis in the business, they held he was. In this respect it was said that the term “’engaged’ should be given a broader construction than that which it might otherwise be given, namely that the capacity in which a person is engaged is of no consequence, so long as the person is engaged on a full time21 basis” and that is clarified by the words in parathesis “either on his or her own behalf or as an employee”.22

Takhar In Commissioner of State Taxation v Takhar23 two brothers (Takhars) owned a number of parcels of land as tenants in common in the Gawler Belt region and one at Burton in the DRA. On two of those parcels of land they conducted extensive poultry meat production. On one of those two parcels they had also conducted an orchid nursery and on all but one of those parcels a share farmer cropped much of the land. They also conducted poultry and other primary production activities in Queensland.

One of the brothers managed the South Australian operations and the other managed the operations in Queensland.24 One of those parcels, at Lewiston, was subdivided in 2007 into three lots.

They were outside the DRA. Prior to the subdivision part of the land had been used for egg production from caged chickens with a manager’s residence and part of the land cropped by the share farmer. After the division, the manager’s residence on one of the lots was rented out, the other lot comprised mainly the former poultry sheds and the third lot continued to be share farmed.

The Burton land had been acquired in 1991 for egg production and was included in the share farming arrangement. There were access issues with the Burton land that eased in 2010. The land contained a low-lying area and between July 2009 and April 2010 approximately 50,000 cubic metres of soil was deposited in

this area. The Environment Protection Authority determined this involved the conduct of an illegal dump and various orders were made in connection with the soil deposited on that land and its possible contamination. With a risk of contamination, the Takhars gave the share farmer directions to cease cropping the Burton land until the EPA issue was resolved. Even during this period the share farmer undertook activities in connection with the land. Once satisfied sometime in 2013 that the soil could be retained the share farmer was instructed to resume farming. The share farmer resumed share farming the land with varying success in the succeeding years. Also, in 2010 the local council compulsorily acquired a portion of the land, having given notice earlier of its proposal to do so, and there was a dispute as to the value of the land acquired.

In 2013 the Commissioner issued land tax assessments in respect of the Burton land and the Lewiston land. The Takhars lodged an objection with the Treasurer. It was disallowed and the Takhars appealed to the Supreme Court. Much evidence was adduced as to the use of the Lewiston and the Burton land. The Commissioner adduced evidence from valuers from the Valuer-General’s office, neighbours and others.

At first instance only the Lewiston lot used for share farming was found to be exempt under the primary production exemption.25 The Burton land was found to be used for the business of primary production and that the brother managing the South Australian activities was engaged on a substantially full time basis in a relevant business for the purpose of the DRA primary production exemption.26 The Burton land was therefore held to be exempt from land tax.27 The Commissioner appealed the decision in respect of the Burton land.

Both at first instance28 and on appeal,29 in considering the use of the Burton land some reliance was placed on a New South Wales decision of Saville v Commissioner

of Land Tax (Saville).30 In that decision, Roden J considered the then New South Wales exemption in respect of land used for primary production. In doing so he observed that if at the relevant date there is no activity in respect of the use of the land, it is clearly appropriate to look both to the period prior to the date and to the period after it, to determine the use of the land during what is described as the hiatus period. Roden J then considered three different situations. One is where the land is fallowed before and after a period of cultivation. In that case he held there is no interruption as to use. The second is a chance occurrence which causes the land to be unused, that is there is no activity at the relevant date. An example provided is the destocking for the purpose of replacing of the stock. In such a situation the land is still being used, though there is no stock on the land, once again there is no interruption as to use. The third situation described is where a person gives up the use of the land for a reason with the intention of resuming it in the future.

In that situation the conclusion is that the use has ceased to be used.

Roden J also stated in Saville that where there is a cessation and claimed hiatus period it is appropriate to have regard to the intention of the owner or person in occupation. More recently the New South Wales Court of Appeal considered the relevance of purpose and intention in Commissioner of State Revenue v Metricon Qld Pty Ltd,31 where the land was not being physically used. The Court stated that “[r]elevant purposes and intentions are principally those already executed, although the complexion of things already done may be coloured by whatever the relevant purpose or intention envisages for the future.”

Notwithstanding the assistance that those decisions may provide, the emphasis in the LTA is the use of the land in the business of primary production rather than simply the physical use of the land.32 The Commissioner’s contention in Commissioner of State Taxation v Takhar33 was that it was August 2021 THE BULLETIN

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TAX FILES

not permissible to evaluate the whole enterprise without consideration of the use of the separate parcels. On this basis the relevant business in respect of the Burton land would be cropping rather than the broader primary production business.34 The Court rejected the approach and said there is no reason for “requiring an analysis that is limited to the activities on the particular parcel of land alone. The phrase, ‘the business of primary production’ is capable of referring to a business being carried out entirely on one discrete parcel of land but also, equally, to a broader business of primary production carried across several parcels of land. The Act does not deny either approach.”35 So once a business of primary production is identified then it is necessary to consider whether the land is used for that business.36 It becomes a matter of fact and degree.37 Further, any business of primary production may encounter obstacles to the exploitation of land under management.

The individual parcels of land may contribute more or less effectively to the business.38 In the case of the Takhars it was their intention and expectation to crop the Burton land.39 They encountered obstacles, including complying with the EPA order, but steps were taken to crop the land. The Commissioner also contended the use was so token as to be de minimis. This was also rejected by the Court.40 The Commissioner’s other major contention was that the brother in South Australia was not engaged on a substantially full-time basis in a relevant business.41 There were in effect three elements to this contention. The first was whether the share farmer was conducting the business on the Burton land.42 The second questioned whether the Burton land was used to a significant extent for the purpose of the Takhars’ primary production business.43 The third questioned whether the relevant business44 was a cropping business or a primary production business, that is whether it was the same type of business as required by the definition of a relevant business.45 In respect of the first issue it was held that it was open to the trial judge to characterise the share farming arrangement as a joint venture46 and consequently two separate businesses.

In the case of the second, the Court observed that whilst the case before it highlighted the potential for a substantial

32 THE BULLETIN August 2021

overlap between the separate qualifying concepts within the exemption of land “used wholly or mainly for the business of primary production”47 and “used to a significant extent for the purposes of that business”,48 the “significant extent” qualification does have work to do in the legislation as structured. A relevant business, where it is the business of primary production, may be the same business that satisfies the requirement that the land is used wholly or mainly for the business of primary production.49 However, they may be different businesses where the relevant owner is engaged in the business of processing or marketing primary produce. In that situation, the business, for the purposes of the relevant business test, is not the same business of primary production that satisfies the definition in section 2(1). In such a situation the question is whether the land is used to a significant extent for the purposes of the processing or marketing business. So, the reference to “that” business in the second limb of the definition may be to a different business, as required by the context of what is a relevant business.50 The other difficulty for the Commissioner’s contention was that in the case of a single business with many parcels of land, the more parcels requiring assessment, the less significant each would be. This could then disqualify some of those parcels from the DRA exemption, contrary to the intent of the provision.51 The Commissioner’s submissions on this element were rejected.52 In respect of the third element the Court held that the word “type” did not require that the relevant business be identified by reference to what was occurring on the land in issue. There was no textual, contextual or purpose for not extending “type” to a mixed farming business to which the land in issue contributed. Further, if it was not extended then it would not achieve the purpose of the exemption.53 So the Takhar’s mixed farming business was the type of business of primary production for which the Burton land was used.54 Summary In summary, for the purposes of the primary production exemption in the LTA, the emphasis is on the use of the land in the business of primary production rather than the physical use of the land.

Accordingly, once a business of primary production is identified then it is necessary to consider whether the land is used in that business rather than focusing simply on the physical use of the land.

Whether the activity constitutes a business is a matter of fact and degree.

Some of the relevant attributes of a business include: a purpose of making a profit; repetition and continuity; the activity being conducted in an organised, business like or systematic manner; the size of the operation; and is the activity being conducted in the same manner as recognised businesses. The prospect of making a profit is simply an indication of a good business rather than a requirement.

Where the land is in the DRA there are a number of additional requirements.

One commonly required is that a relevant person is “engaged” full time in the relevant business. In that context the term “’engaged’ is to be given a broader construction than that which it might otherwise be given. So, the capacity in which a person is engaged is of no consequence, so long as the person is engaged on a full time basis”.

A share farming arrangement may constitute a joint venture and consequently the participants are undertaking separate businesses for the purposes of the DRA exemption. A relevant business in a matter may be the same business that satisfies the requirement that the land is used wholly or mainly for the business of primary production or may be a different business when the relevant person is engaged in the business of processing or marketing primary produce. In the case of a single business with many parcels of land, the test of significant use is not dependent on the extent of the contribution of a parcel but whether the parcel is used in the business or for some other purpose. The requirement that the business is a business of primary production of the type for which the land is used does not require that the relevant business be identified by reference to what is occurring on the land in issue. There is no basis for not extending the DRA relief to a mixed farming business to which the land in issue contributes.

Tax Files is contributed on behalf of the South Australian based members of the Taxation Committee of the Business Law Section of the Law Council of Australia. B

TAX FILES

Endnotes 1 Section 4(1)(l) and section 5(10)(g) for land in the DRA. 2 See The South Australian Government Gazette, 26 June 1975, p 2475. In effect land adjacent to the Adelaide metropolitan area and adjacent to Mount Gambier.

3 Section 2(1) definition of land used for primary production.

4 Section 2(1) definition of business of primary production.

5 In this article this requirement is described as the engagement requirement.

6 Subject to the engagement requirement.

7 Ibid.

8 Ibid.

9 Ibid.

10 Ibid.

11 Ibid.

12 Ibid.

13 Section 5(13).

14 Section 5(13).

15 There are then further definitions of a domestic partner, close personal relationship and a close relative in section 5(13).

16 [2015] SASCFC 151 sub nom T&S Liapis Pty Ltd v Commissioner of State Taxation [2015] SASC 63.

17 [2015] SASC 63 [172].

18 Ibid [151].

19 [2015] SASC 63 [152]-[153]; [2015] SASCFC 151 [36].

20 [2015] SASCFC 151 [36].

21 There has been considerable debate as to what full time meant. At one time the Commissioner appeared to require about 32 hours per week. It is unclear whether the Commissioner still uses that criterion.

22 [2015] SASC 63 [182] and [186]; [2015] SASCFC 151 [39].

23 [2021] SASCA [58].

24 The Queensland activities were not regarded as relevant.

25 Ibid [264], [270] and [273].

26 Ibid [356], [367] and [367].

27 Ibid [368].

28 Ibid [250].

29 Commissioner of State Taxation v Takhar [2021] SASCA [58].

30 (1980) 12 ATR 7, 11.

31 (2017) 105 ATR 11 32 Sections 2(1), 5(10)(g) and 5(13).

33 [2021] SASCA [58].

34 Ibid [60]-[61].

35 Ibid [66].

36 Ibid [67].

37 Ibid [70].

38 Ibid [76].

39 Ibid [75].

40 Ibid [81]-[82].

41 Ibid [87].

42 Ibid [88]-[93].

43 Ibid [94]-[107].

44 The only activity undertaken on the Burton land.

45 Ibid v[108]-[119]. This ignores the additional question raised prior to the hearing as to whether this issue had been raised as a distinct issue at the trial and whether the Commissioner should be given leave to amend the notice of appeal to include as a ground of appeal that further issue.

46 Ibid [93].

47 See definition of “land used for the business of primary production” in section 2(1).

48 See definition of “relevant business” in section 5(13).

49 [2021] SASCA [58] [101]-[102].

50 Ibid [102]-[104].

51 Ibid [106].

52 Ibid [107].

53 Ibid [117].

54 Ibid [119].

Letter to the editor: decriminalisation of sex work Dear Editor n the President’s letter dated 6 May 2021 addressed to the Parliamentary Select Committee it is asserted that the Women Lawyers Committee “informs the Society’s views” in respect of the sex work reform bill.

In over thirty years of legal practice, I have on occasion acted for prostituted women and brothel owners. I have an understanding of the activities and business models. Whilst I support the decriminalisation of prostitution I do not support legalisation of brothels.

There is an alternative route to reform that decriminalises prostitution, prohibits exploitation by pimps and discourages commodification of women. If combined with support services, it can lead to an improvement in wellbeing and opportunity for women who have resorted to prostitution due to a lack of alternative choices.

Associate Professor Joanna Howe of the University of Adelaide has provided a detailed submission to the Select

I

Committee. I commend this submission to you all.

The members of the Women Lawyers Committee are entitled to their views, but they do not represent mine. In this matter I consider their viewpoint poorly considered.

Yours sincerely Loretta Polson Further suggested reading: • Paid for, my journey through Prostitution by Rachel Moran • Being & Being Bought: Prostitution, Surrogacy and The Split Self

by Kajsa Ekman • Pimp State; Sex, Money & The Future of Equality by Kat Banyard • The Pimping of Prostitution: Abolishing the Sex Worker Myth

by Julie Bindel

EDITOR’S NOTE: In 2014, the Women Lawyers Committee asked the Council of the Law Society to consider whether it should take a position on the decriminalisation

of sex work. Following consultation with Members of the Society and Council deliberations on the issue, the Council of the Society, on a vote of 15-5 at its February 2016 meeting, resolved to support full decriminalisation of sex work in South Australia.

Since then, the Society has provided submissions on three separate Bills to decriminalise sex work. In preparing those submissions, the Society has consulted with the Women Lawyers Committee, Industrial Relations Committee, Criminal Law Committee, and Human Rights Committee.

With regards to proposed legislation, the Society’s submission process involves referring Bills out to Committees that have interest and expertise in areas of law relating to the Bill in question, and the Society also invites all Members to comment on Bills. Members are encouraged to consult the weekly InBrief newsletter every Thursday to see which submissions the Society are currently working on. B August 2021 THE BULLETIN

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FEATURE

SEX WITH ROBOTS: HOW SHOULD THE LAW RESPOND? MADI MCCARTHY1 WITH TANIA LEIMAN2

W

hile sex dolls have been available since at least the first half of the twentieth century, technology now enables hyper-realistic, internet-connected, individually programmable, sex robots.3 They can blink, smile and moan. They’re anatomically correct with an almost entirely customisable range of facial and bodily features, and bodies with a humanlike temperature. Marketed as a sex aid, a sex substitute and in some instances, a companion,4 demand for female sex robots far outweighs that for male versions, with male customers significantly outnumbering female customers.

These technological developments, coupled with increasing demand and public concern, suggest Australian policymakers are likely to be confronted with calls for the regulation of sex robots in the future. Balancing competing and complex individual and public interests pose new ethical, regulatory and legal challenges for consideration.

ARGUMENTS OPPOSING SEX ROBOTS Similar to debates about pornography,5 critics argue sex robots objectify and increase the risk of sexual violence against real women.6 Arguably, hyper-realistic sex robots create and perpetuate unrealistic expectations about sexual subservience or subordinance,7 potentially increasing risks of sexual violence against women.8 Echoing Andrea Dworkin and Catharine MacKinnon’s argument that pornography may desensitise men to sexual violence,9 Kate Darling has argued, in the context of all life-like robots, that ‘there is a danger that treating robots violently might have a negative impact on people’s empathy development.’10 If children vandalise robots that behave in a life-like way, this may influence the way they treat living things.11 Similarly, repeated use of sex robots in a violent manner may encourage ‘undesirable sexual acts or behaviors’.12

34 THE BULLETIN August 2021

Some sex robots can be programmed to reject a user’s sexual advances, mimicking a refusal of consent, a key element of sexual offences in Australia.13 For example, when the Frigid Farrah personality14 of TrueCompanion’s multi-personality sex robot Roxxxy is activated, it is ‘reserved and shy’15 and not ‘too appreciative’16 of a user’s sexual advances.

Robert Sparrow notes that, ‘even if the rape of robots does not succeed in promoting – in the sense of increasing – the rape of women, it exhorts and endorses it.’17 However, he considers it may be misplaced to talk of ‘raping’ a robot that lacks the programmed ability to reject or refuse, given a robot’s inability to feel emotions or consent.18 In Sparrow’s view, this would not to be ‘an act of simulated rape or a representation of rape’19 but simply ‘sex with a robot.’20 This highlights the underlying issue of consent that plagues any discussion of ‘rape’ in the context of robots. After all, if sex robots are not human and cannot feel emotions or consent, is consent actually relevant in the context of human-robot sexual interactions?

ARGUMENTS SUPPORTING USE OF SEX ROBOTS On the other hand, could sex robots provide positive benefits? Others suggest their use in gender-imbalanced countries may actually relieve societal pressure on women, and provide safer alternatives to prostitution and trafficking.21 Advocates claim benefits can include empowering the older population and persons with disabilities, addressing sex-related anxiety, treating sexual dysfunctions, promoting safer sex and creating a safe place for people who ‘feel insecure about their sexual orientation’.22 Several countries in Asia and the Middle East have ‘significantly fewer females than males.’23 In 2017,

approximately 115 males per 100 females were born in China, and 111 males to 100 females born in India.24 The ‘natural’ sex ratio at birth is 105 males to 100 females.25 In the United Arab Emirates and Oman, where there is a large male migrant community, women are outnumbered approximately three to one and four to one respectively.26 Gender imbalances have various and differing consequences on men and women. Most obviously, demand will far outweigh supply of available women in the ‘marriage market.’27 Gender imbalance increases familial or societal pressure to marry and have children, while also placing significant value on a woman’s role as a wife, mother, or daughter-in-law.28 Women may also be at an increased risk of emotional, sexual or physical violence or trafficking. Of the excess men who do not marry or have children, ‘the most affected will be those of lowest socioeconomic status, the most uneducated and with fewer opportunities.’29 In a study of ‘attitudes of sex therapists and physicians toward the therapeutic benefits of sex robots’,30 the top three suggested uses were for physically handicapped persons (65%); to be able to live out certain sexual fantasies (61%); and in isolated environments, such as prisons or space stations (50%).31 The top three suggestions for specific diagnoses and situations in sexual therapy where sex robots could be utilised were for patients with social anxiety (50%); for people who do not have a partner but still want to have a sex life ‘without resorting to prostitution or fleeting acquaintances’32 (50%); and premature ejaculation (47%).33 Any regulation of sex robots will thus require delicate balancing of individual interests in autonomy and privacy in one’s own home and sexual relationships, with broader public interests, such as protecting adults from non-consensual sexual activity and preserving public morality.

FEATURE

EXISTING LEGISLATION - CHILD-LIKE SEX DOLLS While no Australian legislation yet regulates or prohibits sex robots, regulation of child-like sex dolls has been addressed by the Commonwealth, South Australia and Queensland. These statutory provisions may guide any future regulation of ‘adult’ sex robots.

Under the Customs Act 1901 (Cth) (Customs Act), a child-like sex doll is a tier 2 good prohibited from importation into Australia. For child-like sex dolls not identified at the point of importation or made in Australia, possession is also an offence under the Criminal Code Act 1995 (Cth) (Criminal Code). Both offences carry a heavy maximum penalty, 10 years for an importation offence and 15 years for a possession offence.

In 2019, the Combatting Child Sexual Exploitation Legislation Amendment Act 2019 (Cth) (Child Sexual Exploitation Amendment Act) increased measures to protect children from sexual exploitation.34 The Criminal Code’s new section 273A.1 makes it an offence to possess ‘a doll or other object’35 if it resembles a person, or the body part of a person, who is, or appears to be, under the age of 18, where ‘a reasonable person would consider it likely that the doll or other object is intended to be used by a person to simulate sexual intercourse.’36 The maximum penalty is 15 years’ imprisonment. Definitions of ‘child abuse material’ in s.473.1 of the Criminal Code and s. 233BAB(4) of the Customs Act have been expanded to include child-like sex dolls.37 South Australia followed the Commonwealth’s lead with the Criminal Law Consolidation (Child-Like Sex Dolls Prohibition) Amendment Act 2019 (SA) (CLCA Amendment Act), which commenced on 3 January, 2020.38 Two new offences have been inserted into the Criminal Law Consolidation Act

1935 (SA) (CLCA). Section 63AA makes it an offence to produce or disseminate child-like sex dolls.39 Section 63AAB makes it an offence to possess a child-like sex doll.40 Both offences are punishable by a maximum penalty of 10 years’ imprisonment. The CLCA Amendment Act also defined ‘child-like sex doll’, and amended the definitions of ‘child exploitation material’, ‘disseminate’ and ‘material’ to encompass child-like sex dolls in section 62 of the CLCA.41 The definition of ‘child exploitation offence’ in the Summary Offences Act 1953 (SA) was also amended.42 In Queensland, the Criminal Code (Child Sexual Offences Reform) and Other Legislation Amendment Act 2020 (QLD) commenced on 15 September, 2020.43 It introduced new offences criminalising ‘the possession, production and supply of anatomically correct, life-like child replicas used for sexual gratification’.44 A doll, robot or other object is defined as a ‘child abuse object’ if:45 • a reasonable adult would consider it to represent, portray or give the predominant impression of a person, or part of a person, under 16 years old, ‘irrespective of whether it has adult characteristics’;46 and • it ‘has been used, or a reasonable adult would consider it is intended for use, in an indecent or sexual context including, for example, engaging in sexual activity.’47 Production or supply of a child abuse object is punishable by a maximum penalty of 20 years’ imprisonment, if the production or supply was for a commercial purpose, or otherwise 14 years’ imprisonment.48 Knowingly possessing a child abuse object carries a maximum penalty of 14 years’ imprisonment.49 No other Australian state or territory has specific provisions dealing with or prohibiting possession of child-like sex dolls.

OBSERVATIONS FROM CASE LAW ON CHILD-LIKE SEX DOLLS Since the inclusion of child-like sex dolls in section 233BAB(4)(g) of the Customs Act, a small, but rising, number of cases have come before the courts.50 Various observations can be made about these cases that may inform future decisions regarding the application of any legislation regulating ‘adult’ sex robots.

First, most charges have been laid under the Customs Act. This is unsurprising, given most child-like sex dolls are identified at point of importation and South Australia and Queensland are currently the only states to have specifically legislated against their possession. However, child-like sex dolls may also be captured by the definition of ‘child abuse material’ in other Australian states and territories, as in R v Miao51 and R v CR52, or under section 273A.1 of the Criminal Code, as in R v Garcia53.

Second, courts have been careful to remain objective in their assessment of child-like sex doll offences. Justice Berman in R v Miao, quoted in DPP v Lou54, remarked that the District Court of New South Wales was not ‘a Court of morals.’55 Courts have instead focused on evaluating the objective gravity of an offender’s conduct.56 Third, in assessing the objective gravity of child-like sex doll offences, courts have routinely considered such offences to be less serious than possessing child abuse material, despite contrary Parliamentary intention. In R v Garcia, Justice Haesler noted the severity of the 15 year maximum penalty in section 273A.1 of the Criminal Code indicated that Parliament ‘does not distinguish between using such dolls for fantasy acts and many of the acts involving indecent or other actions against real children.’57 Nonetheless, possession of a child-like sex doll was considered not as objectively serious as an act involving actual children.58 Similarly, in DPP v Lou, the defendant’s possession of child abuse August 2021 THE BULLETIN

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FEATURE

material was considered as representing ‘much more serious offending’59 than his offence of importing a child-like sex doll, which was not at the high end of objective seriousness.60 In DPP v Leverton61, Justice Harbison remarked that a child-like sex doll was ‘a step removed from that actual depiction of children but it is still a very seriously dangerous item for our community.’62 Fourth, importing or possessing a child-like sex doll has not been considered a victimless crime by the courts, despite the low objective seriousness attributed to the offence. In R v Miao, Justice Berman stated that, while no actual child was harmed by the defendant’s possession of a child-like sex doll, ‘any normalisation of sexual acts committed upon children is capable of increasing the likelihood that children will be abused in that way.’63 Similarly, in DPP v Leverton, Justice Harbison remarked that the offence ‘has the potential to normalise sexual behaviour with children.’64 Lastly, courts have consistently imposed sentences at the lower end of the penalty range for child-like sex doll offences, despite the maximum penalty range of 10 to 15 years. This perhaps reflects a consensus that child-like sex doll offences are low on the scale of objective seriousness. In DPP v Lou, the defendant was sentenced to four months imprisonment with immediate release upon entering into a three year recognisance release order of $3,000.65 In DPP v Leverton, a term of imprisonment was considered inappropriate in the circumstances and instead the defendant was required to enter into a two year recognisance release order of $2,000.66 In R v MB,67 the defendant was sentenced to two years and three months’ imprisonment, to be released immediately upon entering into a recognisance in the amount of $500.68 In R v Miao, the defendant was sentenced to two years and three months’ imprisonment, with a non-parole period of one year and three months.69 Of this, two years was attributable to the defendant’s state offence of possessing child abuse material, which encompassed his possession of a child-like sex doll as well as images and videos of child sexual abuse.70 However, R v Miao is distinguishable from the other cases on the basis that Justice Berman did not outline what proportion of the defendant’s sentence was specifically attributable to possession of a child-like sex doll.

36 THE BULLETIN August 2021

WHERE TO FROM HERE? Sex robots challenge existing conceptions of how humans interact with emerging technologies – and they do so in the most intimate way.

While any regulatory response will need to balance a multitude of interests, ethical questions, and legal challenges, the very real potential for this technology to objectify and promote sexual violence against women suggests action is required sooner rather than later.

However, as the cases on child-like sex dolls suggest, even if sex robots are prohibited in Australia, it is likely that the courts may consider such offences to be less objectively serious than sexual offences against humans, and sentences may be more likely to fall at the lower end of the penalty range, even where maximum penalties are equivalent. B Endnotes 1 LLBLP(Hons), B Accounting, Associate, LK. 2 LLB, GDLP, GCE(HE), Associate Professor and Dean of Law, Flinders University.

3 ‘Are We Ready for Robot Sex?’, The Cut (Web Page) <https://www.thecut.com/2018/05/ sex-robots-realbotix.html#:~:text=The%20 difference%20between%20a%20Real,a%20 head%20%C3%A0%20la%20carte.>.

4 Ibid.

5 Andrea Dworkin and Catharine MacKinnon, Pornography & Civil Rights A New Day for Women’s Equality (1988).

6 Robert Sparrow, ‘Robots, Rape and Representation’ (2017) 9 Int J of Soc Robotics 465, 472; Nicola Döring and Sandra Pöschl, ‘Sex toys, sex dolls, sex robots: Our under-researched bedfellows’ (2018) 27(3) Sexologies 51, 54.

7 Sparrow (n 6) 472; Döring and Pöschl (n 6) 54.

8 Sparrow (n 6) 466.

9 Dworkin & McKinnon (n 5).

10 Kate Darling, ‘“Who’s Johnny?”

Anthropomorphic Framing in Human-Robot Interaction, Integration, and Policy’ in Patrick Linn, Keith Abney and Ryan Jenkins (eds), Robot Ethics 2.0 (Oxford University Press, 2017) 173, 179.

11 Ibid.

12 Ibid.

13 Under section 46(2) of the Criminal Law Consolidation Act 1935 (SA), ‘a person consents to sexual activity if the person freely and voluntarily agrees to the sexual activity.’ See also Crimes Act 1900 (ACT) s 67; Crimes Act 1900 (NSW) s 61HE; Criminal Code Act 1983 (NT) s 192; Criminal Code Act 1899 (QLD) s 348; Criminal Code Act 1924 (TAS) s 2A; Crimes Act 1958 (VIC) s 36; Criminal Code Compilation Act 1913 (WA) s 221BB. 14 Ibid.

15 Salton, Jeff, ‘Roxxxy the US$7,000 companion/sex robot (NSFW)’, New Atlas (Blog Post, 4 February 2010) <https://newatlas.com/roxxxy-us7000-sexrobot/14063/>.

16 Ibid.

17 Sparrow (n 6) 471.

18 Ibid.

19 Ibid.

20 Ibid.

21 Mei Fong, ‘Sex Dolls Are Replacing China’s Missing Women’, Foreign Policy (Web Page, 28 September 2017) <https://foreignpolicy. com/2017/09/28/sex-dolls-are-replacing-chinasmissing-women-demographics/>; Ben Kwok, ‘Sex doll firms cash in on China’s gender imbalance’, Asia Times (Web Page, 8 February 2019) <https:// asiatimes.com/2019/02/sex-doll-business-cashingin-on-gender-imbalance-in-china/>.

22 Fosch-Villaronga, Eduard and Adam Poulsen, ‘Sex care robots’ (2019) 11(1) Paladyn 1..

23 Ritchie, Hannah and Max Roser, ‘Gender Ratio’, Our World in Data (online, June 2019) <https:// ourworldindata.org/gender-ratio#citation>.

24 Ibid.

25 Ibid.

26 Ibid.

27 Ibid.

28 Ibid.

29 Ibid.

30 Christiane Eichenberg, Marwa Khamis and Lisa Hübner, ‘The Attitudes of Therapists and Physicians on the Use of Sex Robots in Sexual Therapy: Online Survey and Interview Study’ (2019) 21(8) Journal of Medical Internet Research 1, 1.

31 Ibid 7-8.

32 Ibid 7-9.

33 Ibid.

34 Explanatory Memorandum, Combatting Child Sexual Exploitation Legislation Amendment Bill 2019 (Cth) 2.

35 Criminal Code Act 1995 (Cth) s 273A.1(a).

36 Ibid s 273A.1(c).

37 Explanatory Memorandum, Combatting Child Sexual Exploitation Legislation Amendment Bill 2019 (Cth) 3.

38 Criminal Law Consolidation (Child-Like Sex Dolls Prohibition) Amendment Act 2019 (SA).

39 Criminal Law Consolidation Act 1935 (SA) s 63AA. 40 Ibid s 63AAB. 41 Ibid s 62.

42 Summary Offences Act 1953 (SA) s 74BN(1).

43 Criminal Code (Child Sexual Offences Reform) and Other Legislation Amendment Act 2020 (QLD).

44 Explanatory Memorandum, Criminal Code (Child Sexual Offences Reform) and Other Legislation Amendment Bill 2019 (QLD) 1.

45 Ibid.

46 Ibid.

47 Ibid.

48 Ibid s 228I. 49 Ibid.

50 R v Miao [2016] NSWDC 181; DPP v Leverton [2017] VCC 1652; R v Millan [2018] WADC 110; DPP v Lou [2019] VCC 1399; R v CR [2019] NSWDC 884; R v MB [2019] NSWDC 992; R v Garcia [2020] NSWDC 55.

51 R v Miao [2016] NSWDC 181 52 R v CR [2019] NSWDC 884 53 R v Garcia [2020] NSWDC 55 54 DPP v Lou [2019] VCC 1399 55 R v Miao (n 51) [1]; DPP v Lou (n 54) [14].

56 Ibid.

57 R v Garcia (n 53) [18].

58 Ibid [21].

59 DPP v Lou (n 54) [49].

60 Ibid [16].

61 DPP v Leverton [2017] VCC 1652.

62 Ibid [27].

63 R v Miao (n 51) [18].

64 DPP v Leverton (n 61) [39].

65 DPP v Lou (n 54) [58]-[59].

66 DPP v Leverton (n 61) [47]-[51].

67 R v MB [2019] NSWDC 992.

68 Ibid [13].

69 R v Miao (n 51) [26].

70 Ibid.

MEMBERS ON THE MOVE

MEMBERS ON THE MOVE

JANE KELLETT

TIM PETERS

ANTHONY SIKLICH

RAFFAELE PICCOLO

ANNABEL WEST

LAUREN ROWAN

G

reg Howe and David Jenkin are delighted to announce that Jane Kellett, Tim Peters and Anthony Siklich became directors of Howe Jenkin Pty Ltd on 1 July 2021. The firm continues to practise as Howe Jenkin Family Lawyers & Mediators.

The Directors at KJK Legal are pleased to announce the promotion of Suzana Jovanovic to become an Associate of the firm as of July 2021.

Suzana joined the firm in mid-2020, and has become a valued member of the firm, supporting the Directors in their key practice areas of workers compensation, employment relations and workplace health and safety. As well as being busy in her legal practice, Suzana also finds time to contribute to many community initiatives, and is a mentor to law students as well.

Raffaele Piccolo has recently joined Anthony Mason Chambers, having previously worked interstate, and most recently in the Office of the Commonwealth Director of Public Prosecutions, in Adelaide.

Raffaele was previously the Associate to the Chief Justice of the Australian Capital Territory. Raffaele then moved to Sydney to undertake the role of Associate to the Honourable Justice Yates in the Federal Court of Australia.

Most recently, Raffaele was a Federal Prosecutor in the Office of the Commonwealth Director of Public Prosecutions.

Raffaele accepts briefs primarily in the areas of administrative, constitutional, criminal (State and Commonwealth), disciplinary tribunals, discrimination and human rights, employment and industrial, inquests and inquiries, migration, immigration and citizenship, and social security and welfare.

SUZANA JOVANOVIC

Thomson Geer is pleased to announce the promotion of two Adelaide-based senior lawyers, Annabel West and Lauren Rowan, to the firm’s partnership, in addition to four other newly appointed partners nationwide.

Annabel is a Partner in the corporate team in Adelaide. She specialises in corporations and securities law, with a principal focus on mergers and acquisitions, private equity, capital raisings and corporate advisory work.

Lauren has over 10 years’ experience in litigation and dispute resolution, acting for clients in various industries including banking and financial services, property, leasing and Government. She specialises in secured and unsecured recoveries for major Australian Banks and lending institutions while also experienced in insolvency, advising lenders, creditors and insolvency practitioners in respect of debt recovery and enforcement.

August 2021 THE BULLETIN

37

GAZING IN THE GAZETTE

3 JUNE 2021 – 2 JULY 2021 ACTS PROCLAIMED Statutes Amendment and Repeal (Budget Measures) Act 2021 (No 5 of 2021) Commencement Part 12: 1 July 2021 Gazetted: 6 May 2021, Gazette No. 29 of 2021 Teachers Registration and Standards (Miscellaneous) Amendment Act 2020 (No 38 of 2020) Commencement: 1 July 2021 Gazetted: 6 May 2021, Gazette No. 29 of 2021 Defamation (Miscellaneous) Amendment Act 2020 (No 41 of 2020) Commencement: 1 July 2021 Gazetted: 20 May 2021, Gazette No. 34 of 2021 Statutes Amendment (National Energy Laws) (Stand-Alone Power Systems) Act 2021 (No 9 of 2021) Commencement: 20 May 2021 Gazetted: 20 May 2021, Gazette No. 34 of 2021 Coroners (Inquests and Privilege) Amendment Act 2021 (No 10 of 2021) Commencement: 7 June 2021 Gazetted: 27 May 2021, Gazette No. 37 of 2021

ACTS ASSENTED TO Landscape South Australia (Miscellaneous) Amendment Act 2021, No. 13 of 2021 Gazetted: 13 May 2021, Gazette No. 33 of 2021

A MONTHLY REVIEW OF ACTS, APPOINTMENTS, REGULATIONS AND RULES COMPILED BY MASTER ELIZABETH OLSSON OF THE DISTRICT COURT OF SOUTH AUSTRALIA

Statutes Amendment (Recommendations of Independent Inquiry into Child Protection) Act 2021, No. 14 of 2021 (amend Bail Act 1985 and Children and Young People (Safety) Act 2017) Gazetted: 13 May 2021, Gazette No. 33 of 2021 Fire and Emergency Services (Governance) Amendment Act 2021, No. 15 of 2021 Gazetted: 20 May 2021, Gazette No. 34 of 2021 Statutes Amendment (Fund Selection and Other Superannuation Matters) Act 2021, No. 16 of 2021 (amend Southern State Superannuation Act 2009 and Superannuation Act 1988) Gazetted: 20 May 2021, Gazette No. 34 of 2021 Statutes Amendment (Transport Portfolio) Act 2021, No. 17 of 2021 (amends Criminal Procedure Act 1921, Expiation of Offences Act 1996, Fines Enforcement and Debt Recovery Act 2017, Harbors and Navigation Act 1993, Motor Vehicles Act 1959, Rail Safety National Law (South Australia) Act 2012 and Road Traffic Act 1961) Gazetted: 20 May 2021, Gazette No. 34 of 2021 Disability Inclusion (Restrictive Practices—NDIS) Amendment Act 2021, No. 18 of 2021 (amends Disability Inclusion Act 2018) Gazetted: 20 May 2021, Gazette No. 34 of 2021

COVID-19 Emergency Response (Expiry) (No 2) Amendment Act 2021, No. 19 of 2021 Gazetted: 20 May 2021, Gazette No. 34 of 2021

APPOINTMENTS Magistrate South Australian Civil and Administrative Tribunal Member Youth Court of South Australia Ancillary Judiciary commencing on 24 May 2021 Police Disciplinary Tribunal Panel Member: from 24 May 2021 until 28 April 2023 Protective Security Officers Disciplinary Tribunal Panel Member: from 24 May 2021 until 28 April 2023 Christopher Jeremy Smolicz Gazetted: 20 May 2021, Gazette No. 34 of 2021 Master of the Supreme Court of South Australia on an auxiliary basis, for a period commencing on 1 June 2021 and expiring on 30 June 2021 Christina Rose Flourentzou Gazetted: 27 May 2021, Gazette No. 37 of 2021

RULES Nil

REGULATIONS PROMULGATED (3 MAY 2021 – 2 JUNE 2021) REGULATION NAME

REG NO.

DATE GAZETTED

National Parks and Wildlife (Fees) Revocation Regulations 2021

44 of 2021

6 May 2021, Gazette No. 29 of 2021

National Parks and Wildlife (Wildlife) (Fee Notices) Variation Regulations 2021 Harbors and Navigation (Fees) Variation Regulations 2021 Motor Vehicles (Fees) Variation Regulations 2021 Motor Vehicles (National Heavy Vehicles Registration Fees) Variation Regulations 2021 Teachers Registration and Standards Regulations 2021 Teachers Registration and Standards (Saving and Transitional Provisions) Regulations 2021 Teachers Registration and Standards (Amendment of Schedule 1 of Act) Regulations 2021 Rail Safety National Law National Regulations (Modification of FOI Act) Variation Regulations 2021 Electronic Transactions (Government Agency) Variation Regulations 2021 Public Sector (Data Sharing) (Relevant Entities) Variation Regulations 2021 Explosives (Security Sensitive Substances) Regulations 2021 Police (Merit Pool) Variation Regulations 2021 Terrorism (Police Powers) Regulations 2021 Criminal Assets Confiscation Regulations 2021 Surveillance Devices (Corresponding Laws) Variation Regulations 2021

45 of 46 of 47 of 48 of 49 of 50 of 51 of 52 of 53 of 54 of 55 of 56 of 57 of 58 of 59 of

6 May 2021, Gazette No. 29 of 2021 6 May 2021, Gazette No. 29 of 2021 6 May 2021, Gazette No. 29 of 2021 6 May 2021, Gazette No. 29 of 2021 6 May 2021, Gazette No. 29 of 2021 6 May 2021, Gazette No. 29 of 2021 6 May 2021, Gazette No. 29 of 2021 13 May 2021, Gazette No. 33 of 2021 13 May 2021, Gazette No. 33 of 2021 13 May 2021, Gazette No. 33 of 2021 20 May 2021, Gazette No. 34 of 2021 20 May 2021, Gazette No. 34 of 2021 27 May 2021, Gazette No. 37 of 2021 27 May 2021, Gazette No. 37 of 2021 27 May 2021, Gazette No. 37 of 2021

2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021

DISALLOWANCE OF REGULATIONS General Regulations under the Planning Development and Infrastructure Act 2016 concerning Planning and Development Fund (No. 2) Variation, made on 18

38 THE BULLETIN August 2021

March 2021 and laid on the Table of the Executive Council on 30 March 2021.

Gazetted: 20 May 2021, Gazette No. 34 of 2021

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VALUATIONS The Litigation Assistance Fund (LAF) is a non-profit charitable trust for which the Law Society acts as trustee. Since 1992 it has provided funding assistance to approximately 1,500 civil claimants.

LAF receives applications for funding assistance from solicitors on behalf of civil claimants seeking compensation/ damages who are unable to meet the fees and/or disbursements of prosecuting their claim. The applications are subjected to a means test and a merits test. Two different forms of funding exist – Disbursements Only Funding (DOF) and Full Funding.

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LAF recommends considering whether applying to LAF is the best course in the circumstances of the claim. There may be better methods of obtaining funding/ representation. For example, all Funding Agreements with LAF give LAF certain rights including that funding can be withdrawn and/or varied.

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