Indigeneity requirement
For a corporation to be registered under the CATSI Act, the corporation must at all times be owned and controlled by Aboriginal or Torres Strait Islander people.
Key points
- The CATSI Act gives corporations the choice to allow non-Indigenous people in the roles of members and directors.
- The CATSI Act protects Indigenous member ownership and control with these requirements:
- The majority of a corporation’s members must be Aboriginal or Torres Strait Islander people. This rule also applies to corporations with corporate members. To be considered Indigenous, a body corporate must be Indigenous-controlled.
- The majority of a corporation's directors must be Aboriginal or Torres Strait Islander people and be members.
- Directors must ensure that their corporation meets the Indigeneity provisions at all times.
Indigeneity requirement for members
The CATSI Act requires a corporation to write their rule for member eligibility in its rule book. It's up to a corporation to decide if they want to allow non-Indigenous people to become members of their corporation.
The CATSI Act makes sure a corporation is at all times owned and controlled by Aboriginal or Torres Strait Islander people through the 'Indigeneity requirement'. The requirement is the majority of corporation members must be Aboriginal and Torres Strait Islander people.
If your corporation’s rule on member eligibility allows non-Indigenous people to become members, when the directors assess a membership application they must refuse the application if accepting it would put non-Indigenous people in the majority.
In a corporation with:
- 5 or more members – 51% of the members must be Aboriginal or Torres Strait Islander people
- 2 to 4 members – all the members, or all but one of the members, must be Aboriginal or Torres Strait Islander people
- one member – that member must be an Aboriginal or Torres Strait Islander person.
A corporation’s rule book may also require that Aboriginal and Torres Strait Islander persons make up a higher proportion of members than required by the Act. If the number or proportion of members who are Aboriginal and Torres Strait Islander persons does not meet what is set in the rule book, the corporation will be in breach of its rule book but not necessarily in breach of the CATSI Act.
Corporate members
A corporation can choose to allow members that are a ‘body corporate’. These are members that are not individual people, instead they are an incorporated entity like a corporation, company or another type of incorporated entity.
The Indigeneity requirement also applies to corporations with corporate members.
If your corporation has corporate members you'll need to work out if they are controlled by Indigenous or non-Indigenous people.
For the Registrar to accept that a body corporate meets the definition of an Aboriginal and Torres Strait Islander person under the CATSI Act, the Registrar must be satisfied that Aboriginal and/or Torres Strait Islander people influence financial and operating policies more than non-Indigenous people do.
We'll look for:
• the practical influence Aboriginal and Torres Strait Islander people can have over the body corporate
• any practices or patterns of behaviour that affect the body corporate’s financial or operating policies.
Also whether Aboriginal and Torres Strait Islander persons comprise a majority of members, shareholders and directors (depending on the type of body corporate).
If a body corporate has equal share of control between Aboriginal or Torres Strait Islander and non-Indigenous members, they’re considered a non-Indigenous member.
Recording Indigeneity of your members
If your corporation allows non-Indigenous people or bodies corporate as members, you must record which members are non-Indigenous on your register of members. [link to register of members page]
Majority of directors must be Indigenous
Unless a corporation's rule book provides otherwise, all directors of corporations must be individuals who are Aboriginal and/or Torres Strait Islander people.
If a corporation’s rule book allows non-Indigenous directors, a majority of the directors must be Aboriginal and/or Torres Strait Islander people.
When a person gives their consent to become a director, they must sign a declaration that includes a confirmation of their Indigeneity (unless the corporation allows non-Indigenous people to become a director as noted above).
If you have 2 members and one is non-Indigenous you must show Aboriginal and Torres Strait Islander control:
- If just the Aboriginal and Torres Strait Islander member is a director, you must have an independent director who is also an Aboriginal or Torres Strait Islander person.
- If the non-Indigenous member is also a director, you must have at least one other director (total of 3 directors) and maintain a majority of Aboriginal or Torres Strait Islander people as directors.
If your corporation has directors representing corporate members, a majority must be Aboriginal or Torres Strait Islander people.
Checking Indigeneity
Responsibility for checking
It's a corporation's role to check and accept the Indigeneity of individual members, corporate members, directors and directors representing corporate members.
The Registrar doesn't check every member and director but may seek evidence from a corporation to check if a corporation is meeting the Indigeneity requirement, and is Indigenous owned and controlled.
In addition, any person may bring a challenge to the Indigeneity of a member or director of a corporation in the Federal Court.
Indigeneity test
The Australian courts have developed a 3-point legal test to determine whether an individual is an Aboriginal and/or Torres Strait Islander person, which is the:
- person is of Aboriginal and/or Torres Strait Islander descent
- person identifies themselves as an Aboriginal and/or Torres Strait Islander person, and
- community recognises the person as an Aboriginal and/or Torres Strait Islander person.
In determining the third point, each community may also have its own criteria, processes and protocols for recognising an individual’s Indigeneity. This might include matters of descent or cultural practices and lore.
When we require evidence of Indigeneity
We may ask a corporation to provide evidence of the Indigeneity of members or directors:
- to assess an application to register a corporation
- when a corporation lodges a document with the Registrar
- if a corporation has a corporate member
- if a corporation does not allow non-Indigenous people as directors and we are concerned that a director may be non-Indigenous
- any time we believe a corporation may not be meeting the Indigeneity requirement, for example if concerns are raised with us about Indigeneity of a member or director.
We are more likely to seek evidence from corporations with:
- a corporate member that is not an Aboriginal and Torres Strait Islander corporation
- 5 or fewer members
- 3 or fewer directors.
Under the CATSI Act it is an offence to provide false or misleading information to the Registrar.
Examples of evidence we may request
A document that confirms a person is:
- a common law holder described in a determination of native title
- an applicant or a member of a native title claim group party to a registered application for a determination of native title
- recognised as an Aboriginal and/or Torres Strait Islander person
- a member of a group which was for Indigenous people only (stolen generation, resident of an institution etc)
- a recipient of an Indigenous measure or benefit.
A statutory declaration by a member or by a director self-identifying as Indigenous.
A declaration made by and bearing the signature of an officer or seal of:
- an Aboriginal and Torres Strait Islander corporation that is not the corporation, nor a related entity, in relation to which the Registrar is seeking evidence
- a body corporate that is recognised under relevant state or territory legislation as a body to be consulted in relation to Aboriginal and/or Torres Strait Islander heritage matters
- an Indigenous controlled entity that is a member of the Coalition of Aboriginal and Torres Strait Islander Peak Organisations.
How we may gather evidence
When gathering evidence to satisfy Indigeneity, we may:
- ask questions of those people with knowledge of the affairs of a corporation
- require the corporation to produce additional documents or information about a submitted document
- examine the books of a corporation
- convene meetings of interested persons.
Failure to comply with the Indigeneity requirement
If your proposed corporation does not meet the Indigeneity requirement, we may refuse to register your corporation.
If your existing corporation no longer meets the Indigeneity requirement, we may:
- issue a notice to the corporation requiring the corporation to comply with the CATSI Act
- request the court wind up the corporation if the corporation fails to comply with the notice.