Community Store Licensing Regime: Potential of the New Penalty Regime for the Promotion of Greater Compliance?
| Author | Marina Nehme |
| Published date | 01 March 2015 |
| Date | 01 March 2015 |
| DOI | http://doi.org/10.22145/flr.43.1.2 |
| Subject Matter | Article |
COMMUNITY STORE LICENSING REGIME: POTENTIAL OF
THE NEW PENALTY REGIME FOR THE PROMOTION OF
GREATER COMPLIANCE?
Marina Nehme∗
ABSTRACT
The community store licensing regime was first introduced as part of the Northern
Territory National Emergency Response Act 2007 (Cth) and subsequently expanded under
the Stronger Futures in the Northern Territory Act 2012 (Cth). The legislation introduced a
new penalty regime with a range of sanctions that may be imposed if community stores
have not complied with their licence conditions.
It is the penalty regime that is the focus of this paper, as a credible sanctioning strategy
to deal with breaches of the licensing regime is not currently in place. Such a strategy is
essential to ensure that the penalty regime leads to greater compliance with the spirit of
the law — ensuring food security — and not just the letter of the law — ensuring that
the terms of community store licence conditions are met. Consequently, the article
considers the strengths and weaknesses of the new penalty regime and proposes a
regulatory approach that may be used by the Secretary to deal with breaches of licence
conditions.
I
INTRODUCTION
The community store1 licensing regime was first introduced as part of the Northern
Territory National Emergency Response Act 2007 (Cth).2 The regime was supposed to be an
interim measure designed to ensure the proper delivery of the income management
system introduced as part of the Northern Territory Emergency Response (the
Intervention).3 Further, the licensing regime aimed to address concerns regarding the
∗ Dr Nehme is a Senior Lecturer at the Faculty of Law, University of New South Wales and
can be contacted on m.nehme@unsw.edu.au. I would like to thank Dr Shelley Bielefeld, the
referees of the article and the editors of the Journal for their valuable feedback.
1
Under s 92 of the Northern Territory National Emergency Response Act 2007 (Cth) a community
store is a business that is a key source of food, drinks or grocery items sold in a prescribed
area. This definition was broadened under s 39(1) of the Stronger Futures in the Northern
Territory Act 2012 (Cth). Under the 2012 legislation, community stores definition also
includes businesses that may be partly selling food, drinks or grocery items at premises
located in the food security area.
2
Northern Territory National Emergency Response Act 2007 (Cth) pt 7.
3
Explanatory Memorandum, Northern Territory National Emergency Response Bil 2007 (Cth) ii .
28
Federal Law Review
Volume 43
_____________________________________________________________________________________
poor management of community stores and the low quality, but highly priced goods
sold at these stores.4 Ultimately, the objective of the regime is to promote 'food security5
for certain Indigenous communities in the Northern Territory'. 6 Although the
community store licensing regime has been criticised by Indigenous communities,7 a
2011 government report evaluating the community stores licensing program found that
the regime has had a positive impact on food security.8
As a consequence of its positive evaluation in the 2011 report, the community stores
licensing program was expanded under the Stronger Futures in the Northern Territory Act
2012 (Cth).9 The licensing regime now applies to all community stores in the Northern
Territory, 10 and not only to those community stores that accept income-managed
funds.11 If a community store is considered 'an important source of food, drink or
grocery items for an Aboriginal community',12 the Secretary of the Department of the
Prime Minister and Cabinet ('the Secretary')13 may determine that the owner of the store
is required to hold a community store licence14 and, if such a determination is made, the
store may not be operated unless the owner does hold a community store licence for the
store.15
Through the licence, a community store may in fact be subjected to a number of
obligations.16 For instance, the Secretary may impose conditions on a store that relate to
4
Ibid.
5
Under s 37(3) of the Stronger Futures in the Northern Territory Act 2012 (Cth), food security is
defined as ensuring that reasonable ongoing level of access to a range of food, drinks and
grocery items are available to the community at reasonable price and in sufficient quantity
and quality to meet the nutritional needs of a household.
6
Northern Territory National Emergency Response Act 2007 (Cth) s 91A.
7 Michele Harris (ed), A Decision to Discriminate—Aboriginal Disempowerment in the Northern
Territory (Concerned Australians, 2012) 48–9; Australian Government, Stronger Futures in the
Northern Territory, Report on Consultations (October 2011) 56–9; Alastair Nicholson et al,
Listening but not Hearing, A Response to the NTER Stronger Futures Consultations (June–
August 2011) 89; Jon Altman, 'Arguing the Intervention' (2013) 14 Journal of Indigenous Policy
1, 79–81. For example, Altman noted that reported child malnutrition had increased in the
Northern Territory despite the licensing of 85 community stores: at 79.
8
Department of Families, Housing, Community Services and Indigenous Affairs, Evaluation
of the Community Stores Licensing Program, Final Report (May 2011) 20–1, 36. A critique of the
licensing regime and analysis of the benefits of and problems with the regime is beyond the
scope of this paper.
9
Replacement Revised Explanatory Memorandum, Stronger Futures in the Northern
Territory Bill 2012 (Cth) 30.
10 The licensing regime will apply to the whole Northern Territory with the exception of areas
which have been excluded by the Minister: Stronger Futures in the Northern Territory Act 2012
(Cth) ss 38(2), 39(1).
11 Ibid s 39(1).
12 Ibid s 41(5).
13 Ibid s 5. The Secretary plays a key part in administering the Stronger Futures in the Northern
Territory Act 2012 (Cth). However the role of the Secretary is not just limited to Indigenous
affairs but also extends to other areas such as domestic and international policies and
national security. See generally Department of the Prime Minister and Cabinet, 'Organisation
Chart' .
14 Stronger Futures in the Northern Territory Act 2012 (Cth) s 41(1).
15 Ibid s 38(1).
16 Ibid s 52.
2015
Community Store Licensing Regime
29
____________________________________________________________________________________
'food security matters', 17 structure and management of the business, 18 auditing,
reporting, record keeping, monitoring and notification obligations. 19 The licensing
conditions may also cover the type of credit or discount rate arrangements that a store
may adopt.20 In summary, the Secretary may impose any condition that may ensure that
the aim behind the licensing regime — ensuring food security — is achieved.21
The Stronger Futures in the Northern Territory Act 2012 (Cth) also introduced a new
penalty regime with a range of sanctions that may be imposed if community stores have
not complied with their licence conditions.22 Prior to the introduction of this legislation,
the only sanction that could be imposed on a community store in case of non-compliance
with its licence conditions was revocation of the licence,23 a sanction of last resort.24
Middle ground sanctions were not available to deal with minor breaches of licence
conditions. This meant that breaches of a licence condition, even minor ones such as the
failure to notify the Secretary of a change of owner or manager of the store, could lead
to revocation of the community store's licence. The imposition of such a sanction may
be disproportionate with the breach of the law and as such would not be an adequate or
appropriate measure to deal with the contravention. It would also prevent the
community store from providing vital goods to the community. Since the community
store was often the only provider of essential food supplies to the community, the
consequences could be dire.25 If affected communities no longer had access to essential
supplies at a reasonable price, their food security would be endangered.26
The Stronger Futures in the Northern Territory Act 2012 (Cth) remedied this deficiency
of the regime by providing the Secretary with five types of sanctions that may be relied
upon to address breaches of licence conditions.27 These sanctions28 are civil penalties,29
infringement notices, 30 injunctions, 31 revocation of licences 32 and enforceable
undertakings.33
17 Food security matters include providing satisfactory range of healthy and good quality food,
drinks, grocery items and promoting nutritious and healthy products: Stronger Futures in the
Northern Territory Act 2012 (Cth) s 46.
18 Stronger Futures in the Northern Territory Act 2012 (Cth) ss 46, 52.
19 Ibid ss 52, 54.
20 Ibid s 52.
21 Ibid s 52(2)–(3).
22 Ibid pt 4 div 8.
23 Northern Territory National Emergency Response Act 2007 (Cth) s 106.
24 Ian Ayres and John Braithwaite, Responsive Regulation: Transcending the Deregulation Debate
(Oxford University Press, 1992) 35–6.
25 Australian Government, Stronger Futures in the Northern Territory, Discussion Paper (June 2011) 20.
26 Replacement Revised Explanatory Memorandum, Stronger Futures in the Northern
Territory Bill 2012 (Cth) 59.
27 Sanctions under other legislation may apply if, for example, there is an immediate threat to
personal or community safety: see, eg, Food Act 2004 (NT) pt 3....
THE NEW PENALTY REGIME FOR THE PROMOTION OF
GREATER COMPLIANCE?
Marina Nehme∗
ABSTRACT
The community store licensing regime was first introduced as part of the Northern
Territory National Emergency Response Act 2007 (Cth) and subsequently expanded under
the Stronger Futures in the Northern Territory Act 2012 (Cth). The legislation introduced a
new penalty regime with a range of sanctions that may be imposed if community stores
have not complied with their licence conditions.
It is the penalty regime that is the focus of this paper, as a credible sanctioning strategy
to deal with breaches of the licensing regime is not currently in place. Such a strategy is
essential to ensure that the penalty regime leads to greater compliance with the spirit of
the law — ensuring food security — and not just the letter of the law — ensuring that
the terms of community store licence conditions are met. Consequently, the article
considers the strengths and weaknesses of the new penalty regime and proposes a
regulatory approach that may be used by the Secretary to deal with breaches of licence
conditions.
I
INTRODUCTION
The community store1 licensing regime was first introduced as part of the Northern
Territory National Emergency Response Act 2007 (Cth).2 The regime was supposed to be an
interim measure designed to ensure the proper delivery of the income management
system introduced as part of the Northern Territory Emergency Response (the
Intervention).3 Further, the licensing regime aimed to address concerns regarding the
∗ Dr Nehme is a Senior Lecturer at the Faculty of Law, University of New South Wales and
can be contacted on m.nehme@unsw.edu.au. I would like to thank Dr Shelley Bielefeld, the
referees of the article and the editors of the Journal for their valuable feedback.
1
Under s 92 of the Northern Territory National Emergency Response Act 2007 (Cth) a community
store is a business that is a key source of food, drinks or grocery items sold in a prescribed
area. This definition was broadened under s 39(1) of the Stronger Futures in the Northern
Territory Act 2012 (Cth). Under the 2012 legislation, community stores definition also
includes businesses that may be partly selling food, drinks or grocery items at premises
located in the food security area.
2
Northern Territory National Emergency Response Act 2007 (Cth) pt 7.
3
Explanatory Memorandum, Northern Territory National Emergency Response Bil 2007 (Cth) ii .
28
Federal Law Review
Volume 43
_____________________________________________________________________________________
poor management of community stores and the low quality, but highly priced goods
sold at these stores.4 Ultimately, the objective of the regime is to promote 'food security5
for certain Indigenous communities in the Northern Territory'. 6 Although the
community store licensing regime has been criticised by Indigenous communities,7 a
2011 government report evaluating the community stores licensing program found that
the regime has had a positive impact on food security.8
As a consequence of its positive evaluation in the 2011 report, the community stores
licensing program was expanded under the Stronger Futures in the Northern Territory Act
2012 (Cth).9 The licensing regime now applies to all community stores in the Northern
Territory, 10 and not only to those community stores that accept income-managed
funds.11 If a community store is considered 'an important source of food, drink or
grocery items for an Aboriginal community',12 the Secretary of the Department of the
Prime Minister and Cabinet ('the Secretary')13 may determine that the owner of the store
is required to hold a community store licence14 and, if such a determination is made, the
store may not be operated unless the owner does hold a community store licence for the
store.15
Through the licence, a community store may in fact be subjected to a number of
obligations.16 For instance, the Secretary may impose conditions on a store that relate to
4
Ibid.
5
Under s 37(3) of the Stronger Futures in the Northern Territory Act 2012 (Cth), food security is
defined as ensuring that reasonable ongoing level of access to a range of food, drinks and
grocery items are available to the community at reasonable price and in sufficient quantity
and quality to meet the nutritional needs of a household.
6
Northern Territory National Emergency Response Act 2007 (Cth) s 91A.
7 Michele Harris (ed), A Decision to Discriminate—Aboriginal Disempowerment in the Northern
Territory (Concerned Australians, 2012) 48–9; Australian Government, Stronger Futures in the
Northern Territory, Report on Consultations (October 2011) 56–9; Alastair Nicholson et al,
Listening but not Hearing, A Response to the NTER Stronger Futures Consultations (June–
August 2011) 89; Jon Altman, 'Arguing the Intervention' (2013) 14 Journal of Indigenous Policy
1, 79–81. For example, Altman noted that reported child malnutrition had increased in the
Northern Territory despite the licensing of 85 community stores: at 79.
8
Department of Families, Housing, Community Services and Indigenous Affairs, Evaluation
of the Community Stores Licensing Program, Final Report (May 2011) 20–1, 36. A critique of the
licensing regime and analysis of the benefits of and problems with the regime is beyond the
scope of this paper.
9
Replacement Revised Explanatory Memorandum, Stronger Futures in the Northern
Territory Bill 2012 (Cth) 30.
10 The licensing regime will apply to the whole Northern Territory with the exception of areas
which have been excluded by the Minister: Stronger Futures in the Northern Territory Act 2012
(Cth) ss 38(2), 39(1).
11 Ibid s 39(1).
12 Ibid s 41(5).
13 Ibid s 5. The Secretary plays a key part in administering the Stronger Futures in the Northern
Territory Act 2012 (Cth). However the role of the Secretary is not just limited to Indigenous
affairs but also extends to other areas such as domestic and international policies and
national security. See generally Department of the Prime Minister and Cabinet, 'Organisation
Chart' .
14 Stronger Futures in the Northern Territory Act 2012 (Cth) s 41(1).
15 Ibid s 38(1).
16 Ibid s 52.
2015
Community Store Licensing Regime
29
____________________________________________________________________________________
'food security matters', 17 structure and management of the business, 18 auditing,
reporting, record keeping, monitoring and notification obligations. 19 The licensing
conditions may also cover the type of credit or discount rate arrangements that a store
may adopt.20 In summary, the Secretary may impose any condition that may ensure that
the aim behind the licensing regime — ensuring food security — is achieved.21
The Stronger Futures in the Northern Territory Act 2012 (Cth) also introduced a new
penalty regime with a range of sanctions that may be imposed if community stores have
not complied with their licence conditions.22 Prior to the introduction of this legislation,
the only sanction that could be imposed on a community store in case of non-compliance
with its licence conditions was revocation of the licence,23 a sanction of last resort.24
Middle ground sanctions were not available to deal with minor breaches of licence
conditions. This meant that breaches of a licence condition, even minor ones such as the
failure to notify the Secretary of a change of owner or manager of the store, could lead
to revocation of the community store's licence. The imposition of such a sanction may
be disproportionate with the breach of the law and as such would not be an adequate or
appropriate measure to deal with the contravention. It would also prevent the
community store from providing vital goods to the community. Since the community
store was often the only provider of essential food supplies to the community, the
consequences could be dire.25 If affected communities no longer had access to essential
supplies at a reasonable price, their food security would be endangered.26
The Stronger Futures in the Northern Territory Act 2012 (Cth) remedied this deficiency
of the regime by providing the Secretary with five types of sanctions that may be relied
upon to address breaches of licence conditions.27 These sanctions28 are civil penalties,29
infringement notices, 30 injunctions, 31 revocation of licences 32 and enforceable
undertakings.33
17 Food security matters include providing satisfactory range of healthy and good quality food,
drinks, grocery items and promoting nutritious and healthy products: Stronger Futures in the
Northern Territory Act 2012 (Cth) s 46.
18 Stronger Futures in the Northern Territory Act 2012 (Cth) ss 46, 52.
19 Ibid ss 52, 54.
20 Ibid s 52.
21 Ibid s 52(2)–(3).
22 Ibid pt 4 div 8.
23 Northern Territory National Emergency Response Act 2007 (Cth) s 106.
24 Ian Ayres and John Braithwaite, Responsive Regulation: Transcending the Deregulation Debate
(Oxford University Press, 1992) 35–6.
25 Australian Government, Stronger Futures in the Northern Territory, Discussion Paper (June 2011) 20.
26 Replacement Revised Explanatory Memorandum, Stronger Futures in the Northern
Territory Bill 2012 (Cth) 59.
27 Sanctions under other legislation may apply if, for example, there is an immediate threat to
personal or community safety: see, eg, Food Act 2004 (NT) pt 3....
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