Joining the National Redress Scheme: What Australian Charities and Not-for-profits Commission Governance Standard 6 Means for Your Charity

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Introduction

For any Australian charity registered with the Australian Charities and Not-for-profits Commission (ACNC), comprehending ACNC Governance Standard 6 is crucial. This specific governance standard is intrinsically linked to the National Redress Scheme, underscoring an organisation’s accountability for historical institutional child sexual abuse and playing a key role in maintaining public confidence in the Australian not-for-profit sector.

This article provides essential information for your not-for-profit organisation regarding ACNC Governance Standard 6. It aims to clarify what this standard entails, particularly the steps required for a charity to join the Scheme if implicated, thereby ensuring your organisation can meet this standard and grasp the consequences of failing to do so.

What Is the National Redress Scheme for Your Charity

Purpose & Components of the Scheme for Affected Individuals

The National Redress Scheme (the Scheme) was established to provide crucial support to individuals who have experienced institutional child sexual abuse. Its creation was a key recommendation stemming from the Royal Commission into Institutional Responses to Child Sexual Abuse.

The Scheme officially commenced on 1 July 2018 and is legislated to operate for a period of 10 years. The legal framework underpinning its operation is the National Redress Scheme for Institutional Child Sexual Abuse Act 2018 (Cth).

For affected individuals, the Scheme offers three primary components of redress, aiming to provide meaningful support and acknowledgement:

  • A monetary redress payment, which can be up to $150,000
  • Access to counselling and psychological services to aid in healing and recovery
  • The option of a direct personal response from the institution(s) found responsible for the abuse, which can be an important part of the redress process for some survivors

Many non-government institutions engage with the Scheme to offer this redress to those who suffered abuse within their care.

How an Organisation Participates in the Scheme

An organisation’s involvement in the Scheme is on an opt-in basis. For an eligible survivor of child sexual abuse to receive redress, one or more of the institutions responsible for the abuse must be formally declared a ‘participating institution’ in the Scheme.

While survivors can submit an application for redress even if the responsible institution has not yet joined, their application will not be able to progress until that specific institution becomes a participant.

The Scheme allows for both current and defunct institutions to be declared as participating institutions. Furthermore, it is possible for two or more participating institutions to form a collective known as a ‘participating group’. An institution that participates individually, without being part of such a group, is referred to as a ‘lone’ participating institution.

The Scheme also outlines provisions for representatives:

  • An incorporated lone participating institution may appoint a representative
  • An unincorporated lone participating institution must have a representative
  • A defunct institution must have a representative
  • A participating group must also have a representative

Institutions that participate in the Scheme and are found responsible for institutional child sexual abuse are required to meet certain obligations. These include:

  • Paying their share of the cost of redress
  • Contributing to the Scheme’s administrative costs
  • Potentially providing a direct personal response to the survivor

The duties of a representative can encompass providing this direct personal response, supplying information to the Scheme as required, and managing the payment of any funding contributions.

Understanding ACNC Governance Standard 6 for Your Organisation

The Core Requirement of ACNC Governance Standard 6

ACNC Governance Standard 6, which became effective on 25 February 2021, mandates that a registered charity must take all reasonable steps to become a participating non-government institution in the Scheme. This obligation applies if the charity is, or is likely to be, identified as being involved in the abuse of a person.

Such identification can occur in two main ways:

  • Through an application for redress made under section 19 of the National Redress Scheme for Institutional Child Sexual Abuse Act 2018 (Cth).
  • Through information given in response to a request from the Scheme Operator, who is the Secretary of the Department of Social Services (DSS), under section 24 or 25 of the National Redress Scheme for Institutional Child Sexual Abuse Act 2018 (Cth).

This standard ensures that organisations involved in past abuse actively engage with the Scheme.

Purpose of This ACNC Governance Standard for the Not-for-Profit Sector

The primary purpose of ACNC Governance Standard 6 is to maintain and enhance public trust and confidence in the Australian not-for-profit sector. It achieves this by ensuring that registered charities’ governance structures facilitate accountability for past conduct concerning institutional child sexual abuse.

Additionally, this standard serves to incentivise charities that may have been responsible for past institutional child sexual abuse to join the Scheme. This approach aligns with public expectations that organisations receiving Commonwealth benefits and concessions, such as those afforded to registered charities, should participate in the Scheme when implicated.

Which Charities & Organisations Does This Governance Standard Affect

ACNC Governance Standard 6 applies specifically to registered charities that are, or are likely to be, identified as being involved in the abuse of a person. This identification can happen through:

  • A redress application made under the National Redress Scheme for Institutional Child Sexual Abuse Act 2018 (Cth)
  • A response to an information request from the Scheme Operator

It is important to understand that not all charities are required to join the Scheme.

A charity is considered ‘likely to be’ identified if:

  • It was named in the Royal Commission into Institutional Responses to Child Sexual Abuse, even if an application for redress has not yet been made against it
  • It becomes aware that an application is likely to be made against it (for instance, through direct information from an individual intending to apply or if the charity is involved in legal proceedings related to past abuse)

Officers of the Scheme generally notify organisations if they have been identified in relation to an applicant for redress. This notification ensures that charities are aware of their potential obligations under Standard 6.

How Your Charity Can Meet ACNC Governance Standard 6

Reasonable Steps Your Organisation Must Take to Join the Scheme

To comply with ACNC Governance Standard 6, an identified registered charity must take all reasonable steps to become a participating non-government institution in the Scheme. Your organisation is expected to actively work towards participation if it is, or is likely to be, identified in relation to abuse. This demonstrates a commitment to accountability within the Australian not-for-profit sector.

Key actions your charity can undertake to meet this standard include:

  • Formally agreeing to participate in the Scheme, as outlined in paragraph 115(3)(c) of the National Redress Scheme for Institutional Child Sexual Abuse Act 2018 (Cth). This is a crucial step towards becoming a participating non-government institution.
  • Responding promptly and cooperatively to any requests from officers of the Scheme concerning your organisation’s participation. Delays in responding can be viewed as not taking reasonable steps.
  • Ultimately becoming a participating non-government institution. While the process takes time, your charity must demonstrate continuous effort towards achieving this status to meet the ACNC governance standards.

Once your charity becomes a participating non-government institution, it will be subject to the operational requirements of the Scheme. This proactive approach is essential for any not-for-profit organisation to maintain public trust and its standing with the ACNC.

Timeline for Your Organisation to Become a Participating Institution

There is a general expectation regarding the timeframe within which an identified charity should complete the process to join the Scheme. To meet ACNC Governance Standard 6, your organisation should aim to become a participating non-government institution within a specific period.

Typically, a charity is expected to achieve this status within six months. This six-month period commences from either:

  • The date the charity is formally identified in a redress application made under the National Redress Scheme for Institutional Child Sexual Abuse Act 2018 (Cth), or
  • When the charity is identified in information provided in response to a request from the Scheme Operator.

Adhering to this timeline is a key indicator that your charity is taking the necessary reasonable steps required by Standard 6.

Consequences of Non-Compliance with Australian Charities and Not-for-profits Commission Governance Standard 6 for Your Not-for-Profit Organisation

ACNC Enforcement Powers & Potential Sanctions for Your Organisation

Failure by your not-for-profit organisation to comply with ACNC Governance Standard 6 can lead to significant consequences. The ACNC possesses strong enforcement powers to investigate any breaches of the ACNC governance standards.

If your charity is identified as being involved in abuse and does not take reasonable steps to join the Scheme, the ACNC can take action in several ways:

  • They may impose various penalties if your organisation is found to be non-compliant with Standard 6
  • One of the most serious sanctions is the revocation of your charity’s registration
  • This loss of registration means your organisation would no longer be eligible for Commonwealth charity tax concessions, which can have severe financial implications for your not-for-profit

The ACNC will investigate these matters, particularly if notified by the Scheme Operator that a charity is not engaging appropriately with the Scheme.

Specific Implications for Basic Religious Charities Not Meeting This Standard

Basic Religious Charities (BRCs) face particular consequences if they are named in a redress application and do not join the Scheme. Under amendments to the Australian Charities and Not-for-Profits Commission Act 2012 (Cth), a BRC that fails to join the Scheme when required will lose its BRC status.

Losing BRC status has significant implications for these organisations:

  • The charity will no longer be exempt from certain ACNC requirements
  • The organisation will become subject to all ACNC Governance Standards, including the critical Standard 6 compelling participation in the Scheme
  • The organisation will be required to comply with standard financial reporting obligations to the ACNC, which BRCs are typically exempt from

This change ensures that all relevant entities within the Australian not-for-profit sector are accountable under the Scheme.

Conclusion

ACNC Governance Standard 6 plays a vital role in ensuring Australian charities uphold accountability regarding historical institutional child sexual abuse by requiring them to join the Scheme if implicated. Understanding this standard, the process for joining the Scheme, and the consequences of non-compliance is essential for any not-for-profit organisation to maintain public trust and its registered status with the ACNC.

If your charity needs guidance on its obligations under ACNC Governance Standard 6 or assistance with the process to join the Scheme, contact LawBridge today. Our experts in not-for-profit legal services can provide the trusted expertise and support your organisation needs to meet this standard and continue its important work within the Australian not-for-profit sector.

Frequently Asked Questions for Your Charity

Published By
Mohamad Kammoun
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