Mapping the Legal Landscape: Chinese State-Owned Companies in Australia

Australia has always relied heavily upon foreign sources of investment and financing and has in the past tended to draw mainly upon British, American and Japanese investment. In recent decades, Chinese state-owned enterprises (SOEs) have played an increasingly important role in the Australian economy with a rising level of investment taking place. Chinese SOEs have been more heavily involved in investments into larger Australian investment projects, such as in mining and infrastructure. Australia has seen an increase in the number of Chinese state-owned companies acquiring substantial domestic assets; this may continue following the ratification of the China-Australia Free Trade Agreement in 2015. Although Chinese SOEs operating in foreign countries such as Australia are required to comply with local corporate governance laws and principles, they also retain their unique Chinese corporate governance values and culture which they have inherited through their parent companies and from China itself. In Australia, there has been an ongoing debate over Chinese investment, with the business community being particularly supportive of such investment. Driven largely by the business community, this debate has been relatively narrow and has not explored the likely impact of Chinese SOEs and their subsidiaries upon the shape of corporate governance in countries in which they invest. This article seeks to examine the legal contours of Chinese-controlled investment in Australia with a view to acquiring a more informed understanding of the impact of Chinese SOEs upon the Australian legal landscape

Corporate Governance for Sustainability

The current model of corporate governance needs reform. There is mounting evidence that the practices of shareholder primacy drive company directors and executives to adopt the same short time horizon as financial markets. Pressure to meet the demands of the financial markets drives stock buybacks, excessive dividends and a failure to invest in productive capabilities. The result is a ‘tragedy of the horizon’, with corporations and their shareholders failing to consider environmental, social or even their own, long-term, economic sustainability. With less than a decade left to address the threat of climate change, and with consensus emerging that businesses need to be held accountable for their contribution, it is time to act and reform corporate governance in the EU. The statement puts forward specific recommendations to clarify the obligations of company boards and directors and make corporate governance practice significantly more sustainable and focused on the long term

Creditor participation in insolvency proceedings - towards the adoption of international standards

Effective creditor participation in insolvency proceedings has been widely seen as an essential feature of any well-developed insolvency administration system. This notion has been expressed in different ways in national systems of insolvency law, ranging from principles such as the pari passu rule and the conduct of creditor meetings to decide matters of importance in the insolvency proceedings, to the role of insolvency representatives in such proceedings. The last decade has seen the emergence of a number of multilateral efforts to more clearly articulate insolvency norms or 'best practice' guidelines; these have included such outcomes as the Asian Development Bank’s 2000 Good Practice Standards, the World Bank and International Monetary Fund’s 2005 draft Principles for Effective Insolvency and Creditor Rights Systems and the monumental 2004 UNCITRAL Legislative Guide on Insolvency Law. The emergence of these multilateral statements has recognised the regional and global significance of insolvency laws and the role that they play in providing a foundation for a market economy. This article examines the creditor participation standards evident in this body of international best practice norms. Ultimately, it is argued that creditor participation in insolvency is an essential element in a rule of law based market economy

“The Rescue of Northern Rock: nationalisation in the shadow of insolvency"

The collapse of Northern Rock plc in September 2007 as a result of the financial crisis that had its origins in the sub-prime mortgage bubble in the United States focussed attention on the limited nature of governmental powers in the UK to deal with banks in distress or facing insolvency. The Banking (Special Provisions) Act 2008 was hurriedly introduced on 21 February 2008 so as to give the UK Treasury wider powers to effect a rescue of failing banks such as Northern Rock, without a recourse to ordinary insolvency procedures such as those under the Insolvency Act 1986. The Act gave the Treasury wide powers, including the power to overcome statutory provisions and to absolve directors of any deposit taking institution of any personal liability as a result of any act or omission whilst the bank was under Treasury control. This temporary legislation was a classic illustration of emergency legislation which allowed government in a state of crisis to act contrary to normal rule of law constraints or procedures, such as in regard to the compulsory acquisitions of property. The Act provided Treasury with powers to make various Orders, such as Compensation Scheme Orders and Transfer Orders. Despite its significance, the legislation passed through the UK Parliament with little or no debate and came into force the day after it was introduced into Parliament