Federal Register of Legislation - Australian Government

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A Bill for an Act to amend the Future Fund Act 2006 and the Nation-building Funds Act 2008, and for related purposes
For authoritative information on the progress of bills and on amendments proposed to them, please see the House of Representatives Votes and Proceedings, and the Journals of the Senate as available on the Parliament House website.
Registered 25 Nov 2011
Introduced Senate 24 Nov 2011
Table of contents.

 

2010‑2011

 

The Parliament of the

Commonwealth of Australia

 

THE SENATE

 

 

 

 

Presented and read a first time

 

 

 

 

 

 

Government Investment Funds Amendment (Ethical Investments) Bill 2011

 

No.      , 2011

 

(Senators Di Natale and Ludlam)

 

 

 

A Bill for an Act to amend the Future Fund Act 2006 and the Nation‑building Funds Act 2008, and for related purposes

  

  


Contents

1............ Short title............................................................................................. 1

2............ Commencement................................................................................... 1

3............ Schedule(s)......................................................................................... 2

Schedule 1—Amendments                                                                                                3

Future Fund Act 2006                                                                                                3

Nation‑building Funds Act 2008                                                                             6

 


A Bill for an Act to amend the Future Fund Act 2006 and the Nation‑building Funds Act 2008, and for related purposes

The Parliament of Australia enacts:

1  Short title

                   This Act may be cited as the Government Investment Funds Amendment (Ethical Investments) Act 2011.

2  Commencement

             (1)  Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

 

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

1.  Sections 1 to 3 and anything in this Act not elsewhere covered by this table

The day this Act receives the Royal Assent.

 

2.  Schedule 1

A single day to be fixed by Proclamation.

However, if any of the provision(s) do not commence within the period of 6 months beginning on the day this Act receives the Royal Assent, they commence on the day after the end of that period.

 

Note:          This table relates only to the provisions of this Act as originally passed by both Houses of the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent.

             (2)  Column 3 of the table contains additional information that is not part of this Act. Information in this column may be added to or edited in any published version of this Act.

3  Schedule(s)

                   Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.


 

Schedule 1Amendments

  

Future Fund Act 2006

1  Section 4

After “Investment Mandate”, insert “and by the Future Fund Ethical Investment Guidelines”.

2  Section 5

Insert:

Future Fund Ethical Investment Guidelines has the meaning given by subsection 20A(1).

3  Section 5

Insert:

prohibited financial asset means a financial asset of a kind that is specified as a prohibited financial asset in the Future Fund Ethical Investment Guidelines.

4  Section 14

After “Investment Mandate”, insert “and by the Future Fund Ethical Investment Guidelines”.

5  At the end of subsection 16(1)

Add “, other than a prohibited financial asset”.

6  After paragraph 18(11)(b)

Insert:

                   (ba)  the Future Fund Ethical Investment Guidelines; and

7  After section 20

Insert:

20A  Future Fund Ethical Investment Guidelines

             (1)  The responsible Ministers must, by legislative instrument, make Future Fund Ethical Investment Guidelines.

             (2)  The Future Fund Ethical Investment Guidelines:

                     (a)  must specify financial assets, or financial assets of a kind, that are prohibited financial assets; and

                     (b)  may make provision for or in relation to socially responsible ethical investment practices, including (but not limited to) environmental concerns, human rights concerns, labour practices and the manufacture of weapons of war.

             (3)  Without limiting paragraph (2)(a), the Future Fund Ethical Investment Guidelines must specify the following kinds of financial assets as prohibited financial assets:

                     (a)  an interest in a body corporate that manufactures tobacco products;

                     (b)  an interest in a body corporate that produces components for cluster munitions;

                     (c)  an interest in a body corporate that produces, maintains or simulates nuclear weapons.

20B  Board to be consulted on Future Fund Ethical Investment Guidelines

             (1)  Before making or varying the Future Fund Ethical Investment Guidelines, the responsible Ministers must:

                     (a)  send a draft of the Guidelines or variation to the Board; and

                     (b)  invite the Board to make a submission to the responsible Ministers on the draft within a time limit specified by the responsible Ministers; and

                     (c)  consider any submission that is received from the Board within that time limit.

             (2)  If:

                     (a)  the responsible Ministers give the Board a draft under paragraph (1)(a); and

                     (b)  the Board makes a submission to the responsible Ministers within the specified time limit;

the submission is to be tabled in each House of the Parliament with the legislative instrument.

             (3)  A timeline specified under this section must be reasonable.

20C  Compliance with Future Fund Ethical Investment Guidelines

             (1)  The Board must take all reasonable steps to comply with the Future Fund Ethical Investment Guidelines.

             (2)  As soon as practicable after the Board becomes aware that it has failed to comply with the Future Fund Ethical Investment Guidelines, the Board must give the responsible Ministers a written statement:

                     (a)  informing the responsible Ministers of the failure to comply with the Future Fund Ethical Investment Guidelines; and

                     (b)  setting out the action that the Board proposes to take in order to comply with the Future Fund Ethical Investment Guidelines.

             (3)  If the responsible Ministers are satisfied that the Board has failed to comply with the Future Fund Ethical Investment Guidelines, the responsible Ministers may, by written notice given to the Board, direct the Board:

                     (a)  to give the responsible Ministers, within a period specified in the notice, a written explanation for the failure to comply with the Future Fund Ethical Investment Guidelines; and

                     (b)  to take action specified in the notice, within a period specified in the notice, in order to comply with the Future Fund Ethical Investment Guidelines.

             (4)  The Board must comply with a direction under subsection (3).

             (5)  A failure to comply with:

                     (a)  the Future Fund Ethical Investment Guidelines; or

                     (b)  a direction under subsection (3);

does not affect the validity of any transaction.

             (6)  A direction under subsection (3) is not a legislative instrument for the purposes of the Legislative Instruments Act 2003.

8  At the end of subsection 24(2)

Add “and the Future Fund Ethical Investment Guidelines”.

9  Subsection 24(6)

After “Mandate”, insert “or the Future Fund Ethical Investment Guidelines”.

10  After subclause 7(1) of Schedule 1

Insert:

          (1A)  The nominated Minister must not authorise the acceptance of a gift that is a prohibited financial asset.

Nation‑building Funds Act 2008

11  Section 4

Insert:

Building Australia Fund Ethical Investment Guidelines has the meaning given by subsection 38A(1).

12  Section 4

Insert:

Education Investment Fund Ethical Investment Guidelines has the meaning given by subsection 157A(1).

13  Section 4

Insert:

Health and Hospitals Fund Ethical Investment Guidelines has the meaning given by subsection 232A(1).

14  Section 4

Insert:

prohibited Building Australia Fund financial asset means a financial asset of a kind that is specified as a prohibited Building Australia Fund financial asset in the Building Australia Fund Ethical Investment Guidelines.

15  Section 4

Insert:

prohibited Education Investment Fund financial asset means a financial asset of a kind that is specified as a prohibited Education Investment Fund financial asset in the Education Investment Fund Ethical Investment Guidelines.

16  Section 4

Insert:

prohibited Health and Hospitals Fund financial asset means a financial asset of a kind that is specified as a prohibited Health and Hospitals Fund financial asset in the Health and Hospitals Fund Ethical Investment Guidelines.

17  Section 10

After “Investment Mandate”, insert “and by the Building Australia Fund Ethical Investment Guidelines”.

18  Section 30

After “Investment Mandate”, insert “and by the Building Australia Fund Ethical Investment Guidelines”.

19  At the end of subsection 32(1)

Add “, other than a prohibited Building Australia Fund financial asset”.

20  Paragraph 35(13)(b)

Omit “.”, substitute “; and”.

21  At the end of subsection 35(13)

Add:

                     (c)  the Building Australia Fund Ethical Investment Guidelines.

22  After section 38

Insert:

38A  Building Australia Fund Ethical Investment Guidelines

             (1)  The responsible Ministers must, by legislative instrument, make Building Australia Fund Ethical Investment Guidelines.

             (2)  The Building Australia Fund Ethical Investment Guidelines:

                     (a)  must specify financial assets, or financial assets of a kind, that are prohibited Building Australia Fund financial assets; and

                     (b)  may make provision for or in relation to socially responsible ethical investment practices, including (but not limited to) environmental concerns, human rights concerns, labour practices and the manufacture of weapons of war.

             (3)  Without limiting paragraph (2)(a), the Building Australia Fund Ethical Investment Guidelines must specify the following kinds of financial assets as prohibited Building Australia Fund financial assets:

                     (a)  an interest in a body corporate that manufactures tobacco products;

                     (b)  an interest in a body corporate that produces components for cluster munitions;

                     (c)  an interest in a body corporate that produces, maintains or simulates nuclear weapons.

38B  Future Fund Board to be consulted on Building Australia Fund Ethical Investment Guidelines

             (1)  Before making or varying the Building Australia Fund Ethical Investment Guidelines, the responsible Ministers must:

                     (a)  send a draft of the Guidelines or variation to the Future Fund Board; and

                     (b)  invite the Future Fund Board to make a submission to the responsible Ministers on the draft within a time limit specified by the responsible Ministers; and

                     (c)  consider any submission that is received from the Future Fund Board within that time limit.

             (2)  If:

                     (a)  the responsible Ministers give the Future Fund Board a draft under paragraph (1)(a); and

                     (b)  the Future Fund Board makes a submission to the responsible Ministers within the specified time limit;

the submission is to be tabled in each House of the Parliament with the legislative instrument.

             (3)  A timeline specified under this section must be reasonable.

38C  Compliance with Building Australia Fund Ethical Investment Guidelines

             (1)  The Future Fund Board must take all reasonable steps to comply with the Building Australia Fund Ethical Investment Guidelines.

             (2)  As soon as practicable after the Future Fund Board becomes aware that it has failed to comply with the Building Australia Fund Ethical Investment Guidelines, the Future Fund Board must give the responsible Ministers a written statement:

                     (a)  informing the responsible Ministers of the failure to comply with the Building Australia Fund Ethical Investment Guidelines; and

                     (b)  setting out the action that the Future Fund Board proposes to take in order to comply with the Building Australia Fund Ethical Investment Guidelines.

             (3)  If the responsible Ministers are satisfied that the Future Fund Board has failed to comply with the Building Australia Fund Ethical Investment Guidelines, the responsible Ministers may, by written notice given to the Future Fund Board, direct the Future Fund Board:

                     (a)  to give the responsible Ministers, within a period specified in the notice, a written explanation for the failure to comply with the Building Australia Fund Ethical Investment Guidelines; and

                     (b)  to take action specified in the notice, within a period specified in the notice, in order to comply with the Building Australia Fund Ethical Investment Guidelines.

             (4)  The Future Fund Board must comply with a direction under subsection (3).

             (5)  A failure to comply with:

                     (a)  the Building Australia Fund Ethical Investment Guidelines; or

                     (b)  a direction under subsection (3);

does not affect the validity of any transaction.

             (6)  A direction under subsection (3) is not a legislative instrument for the purposes of the Legislative Instruments Act 2003.

23  At the end of subsection 41(2)

Add “and the Building Australia Fund Ethical Investment Guidelines”.

24  Subsection 41(6)

After “Mandate”, insert “or the Building Australia Fund Ethical Investment Guidelines”.

25  Section 129

After “Investment Mandate”, insert “and by the Education Investment Fund Ethical Investment Guidelines”.

26  Section 149

After “Investment Mandate”, insert “and by the Education Investment Fund Ethical Investment Guidelines”.

27  At the end of subsection 151(1)

Add “, other than a prohibited Education Investment Fund financial asset”.

28  Paragraph 154(13)(b)

Omit “.”, substitute “; and”.

29  At the end of subsection 154(13)

Add:

                     (c)  the Education Investment Fund Ethical Investment Guidelines.

30  After section 157

Insert:

157A  Education Investment Fund Ethical Investment Guidelines

             (1)  The responsible Ministers must, by legislative instrument, make Education Investment Fund Ethical Investment Guidelines.

             (2)  The Education Investment Fund Ethical Investment Guidelines:

                     (a)  must specify financial assets, or financial assets of a kind, that are prohibited Education Investment Fund financial assets; and

                     (b)  may make provision for or in relation to socially responsible ethical investment practices, including (but not limited to) environmental concerns, human rights concerns, labour practices and the manufacture of weapons of war.

             (3)  Without limiting paragraph (2)(a), the Education Investment Fund Ethical Investment Guidelines must specify the following kinds of financial assets as prohibited Education Investment Fund financial assets:

                     (a)  an interest in a body corporate that manufactures tobacco products;

                     (b)  an interest in a body corporate that produces components for cluster munitions;

                     (c)  an interest in a body corporate that produces, maintains or simulates nuclear weapons.

157B  Future Fund Board to be consulted on Education Investment Fund Ethical Investment Guidelines

             (1)  Before making or varying the Education Investment Fund Ethical Investment Guidelines, the responsible Ministers must:

                     (a)  send a draft of the Guidelines or variation to the Future Fund Board; and

                     (b)  invite the Future Fund Board to make a submission to the responsible Ministers on the draft within a time limit specified by the responsible Ministers; and

                     (c)  consider any submission that is received from the Future Fund Board within that time limit.

             (2)  If:

                     (a)  the responsible Ministers give the Future Fund Board a draft under paragraph (1)(a); and

                     (b)  the Future Fund Board makes a submission to the responsible Ministers within the specified time limit;

the submission is to be tabled in each House of the Parliament with the legislative instrument.

             (3)  A timeline specified under this section must be reasonable.

157C  Compliance with Education Investment Fund Ethical Investment Guidelines

             (1)  The Future Fund Board must take all reasonable steps to comply with the Education Investment Fund Ethical Investment Guidelines.

             (2)  As soon as practicable after the Future Fund Board becomes aware that it has failed to comply with the Education Investment Fund Ethical Investment Guidelines, the Future Fund Board must give the responsible Ministers a written statement:

                     (a)  informing the responsible Ministers of the failure to comply with the Education Investment Fund Ethical Investment Guidelines; and

                     (b)  setting out the action that the Future Fund Board proposes to take in order to comply with the Education Investment Fund Ethical Investment Guidelines.

             (3)  If the responsible Ministers are satisfied that the Future Fund Board has failed to comply with the Education Investment Fund Ethical Investment Guidelines, the responsible Ministers may, by written notice given to the Future Fund Board, direct the Future Fund Board:

                     (a)  to give the responsible Ministers, within a period specified in the notice, a written explanation for the failure to comply with the Education Investment Fund Ethical Investment Guidelines; and

                     (b)  to take action specified in the notice, within a period specified in the notice, in order to comply with the Education Investment Fund Ethical Investment Guidelines.

             (4)  The Future Fund Board must comply with a direction under subsection (3).

             (5)  A failure to comply with:

                     (a)  the Education Investment Fund Ethical Investment Guidelines; or

                     (b)  a direction under subsection (3);

does not affect the validity of any transaction.

             (6)  A direction under subsection (3) is not a legislative instrument for the purposes of the Legislative Instruments Act 2003.

31  At the end of subsection 160(2)

Add “and the Education Investment Fund Ethical Investment Guidelines”.

32  Subsection 160(6)

After “Mandate”, insert “or the Education Investment Fund Ethical Investment Guidelines”.

33  Section 212

After “Investment Mandate”, insert “and by the Health and Hospitals Fund Ethical Investment Guidelines”.

34  Section 225

After “Investment Mandate”, insert “and by the Health and Hospitals Fund Ethical Investment Guidelines”.

35  At the end of subsection 227(1)

Add “, other than a prohibited Health and Hospitals Fund financial asset”.

36  Paragraph 229(13)(b)

Omit “.”, substitute “; and”.

37  At the end of subsection 229(13)

Add:

                     (c)  the Health and Hospitals Fund Ethical Investment Guidelines.

38  After section 232

Insert:

232A  Health and Hospitals Fund Ethical Investment Guidelines

             (1)  The responsible Ministers must, by legislative instrument, make Health and Hospitals Fund Ethical Investment Guidelines.

             (2)  The Health and Hospitals Fund Ethical Investment Guidelines:

                     (a)  must specify financial assets, or financial assets of a kind, that are prohibited Health and Hospitals Fund financial assets; and

                     (b)  may make provision for or in relation to socially responsible ethical investment practices, including (but not limited to) environmental concerns, human rights concerns, labour practices and the manufacture of weapons of war.

             (3)  Without limiting paragraph (2)(a), the Health and Hospitals Fund Ethical Investment Guidelines must specify the following kinds of financial assets as prohibited Health and Hospitals Fund financial assets:

                     (a)  an interest in a body corporate that manufactures tobacco products;

                     (b)  an interest in a body corporate that produces components for cluster munitions;

                     (c)  an interest in a body corporate that produces, maintains or simulates nuclear weapons.

232B  Future Fund Board to be consulted on Health and Hospitals Fund Ethical Investment Guidelines

             (1)  Before making or varying the Health and Hospitals Fund Ethical Investment Guidelines, the responsible Ministers must:

                     (a)  send a draft of the Guidelines or variation to the Future Fund Board; and

                     (b)  invite the Future Fund Board to make a submission to the responsible Ministers on the draft within a time limit specified by the responsible Ministers; and

                     (c)  consider any submission that is received from the Future Fund Board within that time limit.

             (2)  If:

                     (a)  the responsible Ministers give the Future Fund Board a draft under paragraph (1)(a); and

                     (b)  the Future Fund Board makes a submission to the responsible Ministers within the specified time limit;

the submission is to be tabled in each House of the Parliament with the legislative instrument.

             (3)  A timeline specified under this section must be reasonable.

232C  Compliance with Health and Hospitals Fund Ethical Investment Guidelines

             (1)  The Future Fund Board must take all reasonable steps to comply with the Health and Hospitals Fund Ethical Investment Guidelines.

             (2)  As soon as practicable after the Future Fund Board becomes aware that it has failed to comply with the Health and Hospitals Fund Ethical Investment Guidelines, the Future Fund Board must give the responsible Ministers a written statement:

                     (a)  informing the responsible Ministers of the failure to comply with the Health and Hospitals Fund Ethical Investment Guidelines; and

                     (b)  setting out the action that the Future Fund Board proposes to take in order to comply with the Health and Hospitals Fund Ethical Investment Guidelines.

             (3)  If the responsible Ministers are satisfied that the Future Fund Board has failed to comply with the Health and Hospitals Fund Ethical Investment Guidelines, the responsible Ministers may, by written notice given to the Future Fund Board, direct the Future Fund Board:

                     (a)  to give the responsible Ministers, within a period specified in the notice, a written explanation for the failure to comply with the Health and Hospitals Fund Ethical Investment Guidelines; and

                     (b)  to take action specified in the notice, within a period specified in the notice, in order to comply with the Health and Hospitals Fund Ethical Investment Guidelines.

             (4)  The Future Fund Board must comply with a direction under subsection (3).

             (5)  A failure to comply with:

                     (a)  the Health and Hospitals Fund Ethical Investment Guidelines; or

                     (b)  a direction under subsection (3);

does not affect the validity of any transaction.

             (6)  A direction under subsection (3) is not a legislative instrument for the purposes of the Legislative Instruments Act 2003.

39  At the end of subsection 235(2)

Add “and the Health and Hospitals Fund Ethical Investment Guidelines”.

40  Subsection 235(6)

After “Mandate”, insert “or the Health and Hospitals Fund Ethical Investment Guidelines”.

41  Transitional provision—existing investments in prohibited Future Fund financial assets

(1)       This item applies if, on the day this Schedule commences, a financial asset held by the Future Fund Board as an investment of the Future Fund is a prohibited financial asset (within the meaning of section 5 of the Future Fund Act 2006, as inserted by this Schedule).

(2)       The Future Fund Board must realise the asset within 12 months after the day this Schedule commences.

42  Transitional provision—existing investments in prohibited Building Australia Fund financial assets

(1)       This item applies if, on the day this Schedule commences, a financial asset held by the Future Fund Board as an investment of the Building Australia Fund is a prohibited Building Australia Fund financial asset (within the meaning of section 4 of the Nation‑building Funds Act 2006, as inserted by this Schedule).

(2)       The Future Fund Board must realise the asset within 12 months after the day this Schedule commences.

43  Transitional provision—existing investments in prohibited Education Investment Fund financial assets

(1)       This item applies if, on the day this Schedule commences, a financial asset held by the Future Fund Board as an investment of the Education Investment Fund is a prohibited Education Investment Fund financial asset (within the meaning of section 4 of the Nation‑building Funds Act 2006, as inserted by this Schedule).

(2)       The Future Fund Board must realise the asset within 12 months after the day this Schedule commences.

44  Transitional provision—existing investments in prohibited Health and Hospitals Fund financial assets

(1)       This item applies if, on the day this Schedule commences, a financial asset held by the Future Fund Board as an investment of the Health and Hospitals Fund is a prohibited Health and Hospitals Fund financial asset (within the meaning of section 4 of the Nation‑building Funds Act 2006, as inserted by this Schedule).

(2)       The Future Fund Board must realise the asset within 12 months after the day this Schedule commences.