Industry insiders are alarmed by loopholes in the draft

"It will be a failure before it starts," warns Sydney art market analyst Michael Reid, one of the figures involved in drawing up the code.

Australian Commercial Galleries Association president Beverly Knight played a central role in bringing the code to life, but says she will not recommend her members sign up to the code in its present form. She says she hopes to be able to support a revised version. "There's still a long way to go," Knight says. "It's probably too bureaucratic at the moment."

Developed by the Australia Council, the Australian Indigenous Art Commercial Code of Conduct "aims to promote fair trade and practice in the industry which will contribute to the wellbeing of indigenous Australians more generally". It does not seek to deal with behaviour that is already illegal under existing law.

Signatories to the code who breach any of its rules will, if their behaviour continues, be named in public and removed from the code register.

The code prohibits unconscionable dealings with artists, details some of the requirements for transactions between artists and dealers, and discusses issues relating to provenance, record-keeping and payment. However, serious concerns have been raised about two points in particular. The code leaves open the possibility that it could endorse the practice of dealers paying artists with second-hand vehicles. And public institutions, including state-owned art galleries, are exempt from the code.