What are they?
The External Conduct Standards are a set of four standards that govern a registered charity’s operations outside Australia. The External Conduct Standards came into effect in August 2019.
The External Conduct Standards aim to increase a charity’s transparency and governance, as well as ensuring any money or other resources a charity sends overseas reach their intended destinations, and that they are only used for purposes and activities consistent with the charity’s purposes.
The External Conduct Standards also aim to help protect vulnerable persons overseas - whether that be people helped by the charity or charity staff and volunteers.
What do they cover?
Any charity operating overseas and subject to the External Conduct Standards – including small charities – must take reasonable steps to ensure appropriate standards of behaviour, governance and oversight when undertaking overseas activities in relation to the following four areas:
- Standard 1 – Activities and control of resources
- Standard 2 – Annual review of overseas activities and record-keeping
- Standard 3 – Anti-fraud and anti-corruption
- Standard 4 – Protection of vulnerable individuals
See the links above for more information on each standard.
Who must comply with the External Conduct Standards?
Any registered charity that operates outside Australia must comply with the External Conduct Standards.
This requirement encompasses charities of all sizes, including small charities that have or fund overseas operations, or work with third parties/partners that carry out operations outside of Australia.
What does ‘operating outside Australia’ mean?
Operating outside Australia isn’t limited to just major programs or significant projects. Even if a minor portion of your activities occurs overseas or your charity only sends a small amount of money overseas, it is likely your charity will be considered to operate outside Australia and therefore will have to comply with the External Conduct Standards.
What does my charity have to do?
A charity must take reasonable steps to meet the External Conduct Standards. Reasonable steps will vary depending on the charity’s size and operations. Larger charities with more complex overseas operations will need to do more to comply with the standards than a small charity with relatively straightforward operations overseas.
Examples of what may be required include:
- management plans;
- policies or procedures; and
- contracts or MOU’s with overseas project partners.
If the ACNC requests evidence that you are meeting the External Conduct Standards, you must be able to provide documentary evidence.
New organisations seeking registration with the ACNC (and charities applying for new charitable subtypes) that have overseas operations, will be asked about the steps they have taken to comply with these standards and will also need to provide documentary evidence.
Key points to consider
The ACNC lists the following key points:
- The External Conduct Standards are a set of standards that govern a registered charity’s operations outside Australia.
- The External Conduct Standards apply to charities that operate outside Australia. Examples of operating outside Australia include a charity working on projects or programs overseas, sending money overseas, or working with third parties that are operating outside of Australia.
- The External Conduct Standards apply in addition to the ACNC Governance Standards. While Basic Religious Charities do not need to comply with the Governance Standards, they must also comply with the External Conduct Standards if they operate overseas.
- The ACNC will oversee the External Conduct Standards in line with its regulatory approach.
How can Sharrock Pitman Legal assist?
If you are a registered charity operating overseas, feel free to contact Dan Saunders on (03) 8561 3325 for any queries you may have in relation to the External Conduct Standards and what your charity may be required to do to take reasonable steps to seek to meet these standards.
The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.
Liability limited by a scheme approved under Professional Standards Legislation.
For further information contact
Dan is a Legal Practitioner at Sharrock Pitman Legal.
He deals with areas of Charities & Not for Profit Law and Commercial Law. For further information, contact Dan on his direct line (03) 8561 3325.