2nd Feb 2010, 6:08 PM – Senate Foreign Acquisitions and Takeovers Amendment Bill 2009 - Second Reading - Add an amendment

The majority voted against an amendment introduced by Independent Senator Nick Xenophon and co-sponsored by Greens Senator Scott Ludlam. This means that the amendment was unsuccessful.

The amendment would have added the following after the words "That these bills be now read a second time":

...but the Senate calls on the Government to bring forward the changes to law and policy necessary to ensure that:

(a) foreign governments cannot use corporate vehicles they control to purchase strategic assets within Australia;

(b) for non-state-owned entities, a ‘related entity’ test is applied, so that different entities under the same ultimate majority control are treated as one entity in assessing whether an acquisition will result in more than 10 percent of control of any strategic asset market in Australia;

(c) the Foreign Investment Review Board (FIRB), in considering decisions on foreign ownership, is required to assess whether Australia has reciprocal rights of investment in the proposer’s country;

(d) effective laws are in place to prevent creeping acquisitions by foreign, state-owned entities of Australian businesses and assets;

(e) the FIRB provides clear criteria of what the ‘national interest’ test is;

(f) abbreviated versions of FIRB advice to the Minister are tabled in both Houses of the Parliament;

(g) clear definitions are advanced of ‘community interest’ and ‘common standards of business behaviour’, and major investment proposals are subjected to rigorous public scrutiny to ensure that they meet genuine common standards of business behaviour; and

(h) the human rights records of the country of state-owned entities seeking to invest in Australia be a key factor during consideration by the FIRB, and that all foreign non-state-owned entities be subject to consideration of their other investment activities and whether these conflict with Australia’s ethical positions.

Background to the bill

The bill amends the Foreign Acquisitions and Takeovers Act 1975 so that foreign investors are required to notify the Treasurer where there is a possibility (either now or in the future) that an investment arrangement will deliver influence or control over an Australian company's business or assets.(Read more about the bill, including its explanatory memoranda, here. Its bills digest (298 KB) also contains useful information.)

References