Exclusive: Governance standard three “unnecessary”, says HOOC

Hands Off Our Charities noted five main concerns about governance standard three in its submission to the ACNC’s Regulations 2022.

Hands Off Our Charities (HOOC) has again called for governance standard three to be removed from the ACNC’s regulations, in a submission to the regulatory body.

In its submission to the Australian Charities and Not‑for‑profits Commission Regulations 2022, HOOC called for the governance standard to be removed, declaring it “redundant”.

Governance standard three states:

“a registered entity must not engage in conduct, or omit to engage in conduct, if the conduct or omission may be dealt with: (a) as an indictable offence under an Australian law (even if it may, in some circumstances, be dealt with as a summary offence); or (b) by way of a civil penalty of 60 penalty units or more.”

Section 35-10 of the Charities Act states that the ACNC Commissioner can deregister a charity if they reasonably believe the charity has not complied with a governance standard, or it is more likely than not that it will not comply.

According to HOOC’s submission, governance standard three is “too broad and imprecise in its scope” and creates “an unnecessary threshold for the conduct of charities that is not imposed upon other types of organisations”.

The advocacy body argues that the standard is hampering charitable advocacy.

HOOC recommends instead a more “targeted approach” to addressing misconduct by charities, which the organisation believes would be more effective and less likely to impact charitable advocacy.

Concerns

HOOC listed five specific concerns about the standard in its submission.

Its first concern is that the standard allows the commissioner of the day too much discretion to revoke a charity’s registration, even if they simply believe the charity is more likely than not to breach a standard.

“We think that this is too much discretion for the charities commissioner to have,” Ray Yoshida, spokesperson for HOOC, told Pro Bono News.

“It doesn’t serve the purpose of protecting and enabling public trust in the sector.”

Secondly, HOOC notes that charities are already subject to applicable laws and that the standard is “disproportionate”.

Thirdly, HOOC states in its submission that the standard is inconsistent with the Charities Act because under the Act, charities “should not be deregistered for committing an offence unless that offence demonstrates the charity’s purpose is unlawful”.

HOOC notes that the standard could also silence legitimate charitable advocacy.

“It has a chilling effect on legitimate and important advocacy on public policy in Australia,” Yoshida said.

Finally, the organisation says in its submission that the standard is not needed, because the issues it would deal with are covered by other governance standards.

It’s not the first time HOOC has advocated for the removal of the standard; the organisation has made submissions on the topic in the past.

Asked why the standard hadn’t been acted on before, Yoshida said it was unclear.

“This has been a recommendation from the 2018 review into ACNC legislation. The panel recommended that governance standard be repealed because it is inappropriate,” he said.

“And we know that the previous government had tried to expand the scope of governance standard three which was unanimously rejected across the charity sector and by the federal parliament at the time.”

But with the ACNC’s regulations under review, Yoshida said the time was right for the standard to finally be removed.

“We believe that this is an opportunity for Treasury and government to finally act on the recommendation that was made four years ago and get rid of the governance standard once and for all,” he said.

“There’s no need for any further delay.”