Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2010-2011
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
CLEAN ENERGY REGULATOR BILL 2011
EXPLANATORY MEMORANDUM
(Circulated by the authority of the Minister for Climate Change
and Energy Efficiency, the Honourable Greg Combet AM MP)
Table of contents
Glossary .................................................................................................. 1
General outline and financial impact ....................................................... 3
Chapter 1 Clean Energy Regulator ............................................... 7
Index ..................................................................................................... 25
Glossary
The following abbreviations and acronyms are used throughout this
explanatory memorandum.
Abbreviation Definition
Authority Climate Change Authority
Carbon pricing mechanism The mechanism embodied in the Clean
Energy Bill 2011 and associated
provisions
CFI Carbon Farming Initiative
Climate change law The laws listed in Table 1.1
Consequential amendments Clean Energy (Consequential
bill Amendments) Bill 2011
Department Department of Climate Change and
Energy Efficiency
GEDO Greenhouse and Energy Data Officer
Main bill Clean Energy Bill 2011
NGERS National Greenhouse and Energy
Reporting System
ORER Office of the Renewable Energy
Regulator
Regulator Clean Energy Regulator
UNFCCC United Nations Framework Convention
on Climate Change
1
General outline and financial impact
The 2011 Clean Energy Legislation Package
The Clean Energy Regulator Bill 2011 is part of the Clean Energy
Legislation Package, which sets up the carbon pricing mechanism (the
mechanism) as part of the Government's climate change plan, as set out in
Securing a clean energy future: the Australian Government's climate
change plan.
The full policy context and background to the mechanism is set out in the
explanatory memorandum for the Clean Energy Bill 2011. A description
of the bills which will introduce the mechanism is set out below.
Table I: The Clean Energy Bill 2011 and related bills
Main bill The Clean Energy Bill 2011 (the main bill) creates the
mechanism. It sets out the structure of and process for
introducing the mechanism. These include:
· entities and emissions that are covered by the
mechanism;
· liable entities' obligation to surrender emissions units
corresponding to their emissions;
· limits on the number of emissions units that will be
issued;
· the nature of carbon units;
· allocation of carbon units, including by auction and the
issue of free units';
· mechanisms to contain costs, including the fixed
charge period and price floors and ceilings;
· linking to other emissions trading schemes;
· assistance in relation to emissions-intensive trade-
exposed activities and coal-fired electricity generators;
and
· monitoring and enforcement.
Statutory The Clean Energy Regulator Bill 2011 sets up the Clean
bodies Energy Regulator, which is a statutory authority that will
administer the mechanism and enforce the law.
The responsibilities of the Regulator include:
· providing education on the mechanism, particularly
about the administrative arrangements of the
mechanism;
· assessing emissions data to determine each entity's
3
Clean Energy Regulator Bill 2011
liability;
· operating the Registry;
· monitoring, facilitating and enforcing compliance with
the mechanism;
· allocating permits including freely allocated permits,
fixed price permits and auctioned permits;
· applying legislative rules to determine if a particular
entity is eligible for assistance in the form of permits
to be allocated administratively, and the number of
other permits to be allocated;
· administering the National Greenhouse and Energy
Reporting System (NGERS), the Renewable Energy
Target and the Carbon Farming Initiative (CFI); and
· accrediting auditors for the CFI and NGERS.
The Climate Change Authority Bill 2011 sets up the Climate
Change Authority, which will be an independent body that
provides the Government expert advice on key aspects of the
mechanism and the Government's climate change mitigation
initiatives.
The Government will remain responsible for carbon pricing
policy decisions.
This Bill also sets up the Land Carbon and Biodiversity Board
which will advise on key initiatives in the land sector.
Consequential The Clean Energy (Consequential Amendments) Bill 2011
amendments (the consequential amendments bill) makes consequential
amendments to ensure:
· the National Greenhouse and Energy Reporting System
(NGERS) supports the mechanism;
· the Australian National Registry of Emissions Units covers
the mechanism and the CFI;
· the Regulator covers the mechanism, the CFI, the
Renewable Energy Target and NGERS;
· the Regulator and Authority are set up as statutory agencies
and regulated by public accountability and financial
management rules;
· that emissions units and their trading are covered by laws
on financial services and regulated by ASIC;
· that activities related to emissions trading are covered by
laws on money laundering and fraud;
· synthetic greenhouse gases are subject to an equivalent
carbon price applied through existing regulation of those
substances;
· the Regulator can work with other national regulatory
bodies, including ASIC, the ACCC and Austrac;
· the taxation treatment of emissions units for the purposes
of GST and income tax is clear; and
4
General outline and financial impact
· the Conservation Tillage Refundable Tax Offset is
established.
Technical Those elements of the mechanism which oblige a person to pay
bills money are implemented through separate bills that comply with
the requirements of section 55 of the Constitution.
These bills are the Clean Energy (Unit Shortfall Charge--
General) Bill 2011, the Clean Energy (Unit Issue Charge--
Auctions) Bill 2011, the Clean Energy (Unit Issue Charge--
Fixed Charge) Bill 2011, the Clean Energy (Charges--
Excise) Bill 2011, the Clean Energy (Charges--Customs)
Bill 2011, the Clean Energy (International Unit Surrender
Charge) Bill 2011, the Ozone Protection and Synthetic
Greenhouse Gas (Import Levy) Amendment Bill 2011 and
the Ozone Protection and Synthetic Greenhouse Gas
(Manufacture Levy) Amendment Bill 2011.
Related bills Other elements of the Government's Climate Change Plan are
being implemented through other legislation. These are:
· the Clean Energy (Excise Tariff Legislation
Amendment) Bill 2011 and the Clean Energy
(Customs Tariff Amendment) Bill 2011, which
impose an effective carbon price on transport fuels
(other than those used by households and in light
commercial vehicles) through excise and customs
tariffs;
· the Clean Energy (Fuel Tax Legislation
Amendment) Bill 2011, which reduces the business
fuel tax credit entitlement of non-exempted industries
for their use of liquid and gaseous transport fuels, in
order to provide an effective carbon price on business
through the fuel tax system; and
· the Clean Energy Amendment (Household
Assistance Amendments) Bill 2011, Clean Energy
(Tax Laws Amendments) Bill 2011 and the Clean
Energy (Income Tax Rates Amendments) Bill 2011,
which will implement the household assistance
measures announced by the Government on 10 July
2011. These bills amend relevant legislation to
increase pensions and allowances, income support
allowances and family payments and provide income
tax cuts for lower and middle income households.
The Clean Energy Regulator Bill 2011 needs to be read in the context, in
particular, of the first two bills mentioned above:
· the main bill contains the detail concerning the Regulator's functions
and powers relating to the mechanism;
· the consequential amendments bill amends the National Greenhouse
and Energy Reporting Act 2007, the Renewable Energy (Electricity) Act
2000, the Carbon Credits (Carbon Farming Initiative) Act 2011 and the
5
Clean Energy Regulator Bill 2011
Australian National Registry of Emissions Units Act 2011 to establish a
single climate change regulatory authority.
Clean Energy Regulator Bill 2011
The Clean Energy Regulator Bill 2011 establishes the Clean Energy
Regulator (Regulator), which will be responsible for administering the
mechanism included in the Clean Energy Plan, the Carbon Farming
Initiative, the National Greenhouse and Energy Reporting System, the
Renewable Energy Target and the Australian National Registry of
Emissions Units.
Date of effect: Upon commencement of section 3 of the proposed Clean
Energy Act 2011, which is on a day to be fixed by Proclamation
(assuming the conditions in section 2 of that Act are satisfied).
Proposal announced: The measures are based on the positions included
in the Government's announcement on 10 July 2011.
Financial impact: The financial impact is addressed in the explanatory
memorandum for the main bill.
Compliance cost impact: The Regulation Impact Statement for the
mechanism is available at http://ris.finance.gov.au. The RIS was prepared
by the Department of Climate Change and Energy Efficiency and has
been assessed as adequate by the Office of Best Practice Regulation.
6
Chapter 1
Clean Energy Regulator
Outline of chapter
1.1 The explanatory memorandum describes the Regulator's
functions and powers, membership, planning and reporting obligations
and the secrecy provisions.
Overview of amendments
Two regulators abolished, one created
1.2 As well as administering the carbon pricing mechanism (the
mechanism), the Renewable Energy Target, the Carbon Farming Initiative
and the National Registry of Emissions, the Regulator will also be
responsible for the functions of the Office of the Renewable Energy
Regulator (ORER) and the Greenhouse and Energy Data Officer (GEDO),
as shown in Diagram 1.1 below.
Diagram 1.1 Proposed Regulatory Functions of the Regulator
Carbon Pricing Mechanism
Renewable Energy Target
(currently administered by
ORER)
Clean National Greenhouse and
Energy Reporting Scheme
Energy (currently administered by
Regulator GEDO)
Carbon Farming Initiative
National Registry of Emissions
Units (currently administered
by the Department)
7
Clean Energy Regulator Bill 2011
1.3 The advantages of this arrangement are expected to be:
· improved regulatory outcomes, including reduced risk of
conflicts or gaps emerging between regulators with separate
functions;
· streamlined procedures for reporting and surrender of
emissions units by liable entities under the mechanism;
· reduced burden for businesses that would otherwise need to
deal with two or three regulators;
· economies of scale in the administration of legislation; and
· consistency with current Australian Government policy on
the governance arrangements for Australian Government
bodies.
Regulator to be independent from Government
1.4 The Government's intention is to set up an independent
regulator to administer the mechanism within a limited and legislatively
prescribed discretion. Such an arrangement is expected to reduce the risk
that the regulator's decisions are based on factors other than the
mechanism's objectives, and should also contribute to efficient and
effective administration.
1.5 This intention is reflected in a number of elements in the bill,
including the limited scope for Ministerial directions to the Regulator and
the limited grounds on which a member of the Regulator may be removed
from office.
1.6 A new Regulator is proposed because no single existing
regulator has the capabilities needed to administer the range of functions
required under climate change laws.
Summary of new law
1.7 The bill establishes the Regulator as a body corporate
comprising a Chair and between two and four other members.
1.8 The primary functions of the Regulator are to administer the
mechanism, the Carbon Farming Initiative, the National Greenhouse and
Energy Reporting System, the Renewable Energy Target and the National
Registry of Emissions.
1.9 For the purposes of the Public Service Act 1999, the Chair of the
Regulator is the head of a statutory agency and can employ Australian
Public Sector employees on behalf of the Commonwealth.
8
Chapter 1 Clean Energy Regulator
1.10 In order to ensure proper use and management of public money,
public property and other Commonwealth resources, the Regulator will be
bound by the Financial Management and Accountability Act 1997.
1.11 The Regulator will be required to produce a corporate plan
setting out the Regulator's objectives and the strategies and policies that
are to be used to achieve those objectives.
1.12 The Regulator will also be required to produce an annual report,
which will be tabled in Parliament.
1.13 As with many other regulators, such as the Australian Securities
and Investments Commission, the Regulator is subject to Ministerial
direction on general matters only.
1.14 The Minister may only terminate an appointment to the
Regulator on narrow grounds, including for misbehaviour, physical or
mental incapacity or repeated absence from meetings of the Regulator.
1.15 The bill contains provisions designed to ensure that information
obtained by the Regulator in the course of its functions is only disclosed
and used for legitimate purposes.
Comparison of key features of new law and current law
New arrangements Current arrangements
One Regulator established to Carbon Farming Initiative, to be
administer the mechanism, the administered by the Carbon Credits
Carbon Farming Initiative, the Administrator upon commencement
National Greenhouse and Energy of the Carbon Credits (Carbon
Reporting System, the Renewable Farming Initiative) Act 2011
Energy Target and the Australian National Greenhouse and Energy
National Registry of Emissions Units Reporting System administered by
the Greenhouse and Energy Data
Officer
Renewable Energy Target
administered by the Office of the
Renewable Energy Regulator
National Registry of Emissions
administered by the Department
Detailed explanation of new law
Establishment of Regulator
1.16 The bill establishes the Regulator. [Part 2, Division 1, clause 11]
9
Clean Energy Regulator Bill 2011
Nature of the Regulator
1.17 The Regulator is a body corporate, comprising a Chair and
between two and four other members. [Part 2, Division 2, clause 16] [Part 2,
Division 2, clause 17]
1.18 As with many other regulators, such as the Australian Securities
and Investments Commission, the Regulator is subject to Ministerial
direction on general matters only. [Part 2, Division 8, clause 41] The policy
intention of this provision is to ensure that the Regulator is accountable to
the Minister and acts consistently with Australian Government policy,
whilst not empowering the Minister to intervene in particular cases, for
example the issue of carbon units to a particular person.
1.19 A Ministerial direction to the Regulator has the status of a
legislative instrument. [Part 2, Division 8, clause 41] This promotes
transparency, as it means directions must be tabled in Parliament and
incorporated into the Federal Register of Legislative Instruments. In line
with the usual provisions for Ministerial directions, the directions are not
disallowable (Legislative Instruments Act 2003, section 44(2), Item 41).
1.20 While the Regulator is to be independent from specific direction
by Government, its nature as a government authority is recognised through
a number of provisions. In particular:
· contracts entered into by the Regulator are entered into on
behalf of the Commonwealth [Part 2, Division 1, clause 13(3)]
· any real or personal property held by the Regulator is held
for and on behalf of the Commonwealth [Part 2, Division 1,
clause 13(4)]
· any money received by the Regulator is received for and on
behalf of the Commonwealth [Part 2, Division 1, clause 13(5)]
· any financial liabilities of the Regulator are taken to be
liabilities of the Commonwealth [Part 2, Division 1, clause 14]
· the Regulator has the privileges and immunities of the Crown
in right of the Commonwealth [Part 2, Division 1, clause 15]
· the Regulator will be subject to the Financial Management
and Accountability Act 1997, which provides for the proper
use and management of public money, public property and
other Commonwealth resources. (This will be achieved
through the consequential amendments bill rather than
through this bill).
Functions of Regulator
1.21 The Regulator has the following functions:
10
Chapter 1 Clean Energy Regulator
· such functions as are conferred on the Regulator by a climate
change law
· such functions as are conferred on the Regulator by any other
law of the Commonwealth
· to do anything incidental to or conducive to the performance
of any of the above functions.
[Part 2, Division 1, clause 12]
1.22 The following table lists `climate change laws' as defined in the
bill, and summarises the relevant functions conferred by those laws on the
Regulator.
Table 1.1: Summary of functions conferred on the Regulator by
climate change laws
Climate change law Summary of Regulator's functions
This bill · The functions set out in paragraph 1.21
above.
· The planning and reporting functions set
out from paragraph 1.51 below.
Clean Energy Bill 2011 · To take various actions and decisions
needed for the smooth functioning of the
mechanism, including:
- Auctioning emissions units
- Allocating emissions units in
relation to emissions-intensive
trade-exposed activities and
coal-fired electricity generation
- Assessing shortfalls in
emissions units surrendered by
liable entities
- Overseeing the transfer of
liability for emissions between
corporate entities in some
circumstances.
· To monitor and promote compliance with
the mechanism.
· To conduct and/or co-ordinate education
programs about the mechanism.
· To advise the Minister on matters relating
to the mechanism.
· To advise and assist persons in relation to
their obligations under the mechanism.
· To liaise with regulatory and other
bodies, whether in Australia or elsewhere.
11
Clean Energy Regulator Bill 2011
Climate change law Summary of Regulator's functions
· To collect, analyse, interpret and
disseminate statistical information
relating to the mechanism.
12
Chapter 1 Clean Energy Regulator
Regulations under the Clean · None at this stage.
Energy Bill 2011
Carbon Credits (Carbon · Approving eligible domestic offsets
Farming Initiative) Act 2011 projects and allocating Australian carbon
credit units for those projects.
National Greenhouse and · Collecting information on greenhouse gas
Energy Reporting Act 2007 emissions, energy consumption and
(as amended by the production data from registered
consequential amendments corporations and entities with reporting
bill) obligations under the mechanism.
· Public disclosure, and disclosure to
Commonwealth and State agencies, of
corporate-level greenhouse gas emissions
and energy information.
Regulations under the · These regulations provide details on
National Greenhouse and matters relevant to the obligations of
Energy Reporting Act 2007 registered corporations and liable entities
under the mechanism.
Renewable Energy · Administration of the Renewable Energy
(Electricity) Act 2000 Target, including:
- Accrediting eligible renewable energy
power stations
- Maintaining registers, including the
register of Renewable Energy
Certificates
- Monitoring and enforcing compliance
with the Act.
Regulations under the · These Regulations contain detail around
Renewable Energy some matters contained in the Renewable
(Electricity) Act 2000 Energy (Electricity) Act 2000.
Renewable Energy · This Act creates the charge to be paid per
(Electricity) (Charges) Act unit of electricity where there is a failure
2000 to comply with the Renewable Energy
(Electricity) Act 2000. The Regulator
will be responsible for recovering this
charge as part of its function of enforcing
compliance with that Act.
Australian National Registry · Maintaining a National Registry to track
of Emissions Units Act 2011 emissions units.
Powers of Regulator
1.23 The Regulator has the general power to do all things necessary or
convenient to be done for, or in connection with, the performance of its
functions. [Part 2, Division 1, clause 13(1)]
13
Clean Energy Regulator Bill 2011
1.24 The Regulator may enter into contracts. [Part 2, Division 1,
This would allow the Regulator to, for example, engage
clause 13(2)]
consultants or enter into contracts for premises and equipment.
1.25 These powers are in addition to the specific powers given to the
Regulator under the legislation set out in Table 1.1. For example, under
the main bill the Regulator will have a range of enforcement powers,
including the power to bring proceedings for civil penalty orders.
Exercise of functions and powers
1.26 The Regulator may, by writing, delegate functions and powers
to:
· a member of the Regulator or
· a member of the staff of the Regulator who is a Senior
Executive Service or Acting Senior Executive Service
employee, or an Executive Level 2 officer in the Australian
Public Service or
· an Australian Public Service employee in the Department,
who is a Senior Executive Service or Acting Senior
Executive Service employee, or an Executive Level 2 officer,
assisting the Regulator under section 37 of the Act. [Part 2,
Division 5, clause 35]
Membership of the Regulator
Number of Members
1.27 As noted above, the Regulator will comprise a Chair and
between two and four other members. [Part 2, Division 2, clause 17]
Term of Membership
1.28 The Chair must hold office on a full-time basis, and other
members may hold office on either a full-time or part-time basis. [Part 2,
Division 2, clause 18(3) and 18(4)]
1.29 All members are to be appointed for a period of up to five years.
[Part 2, Division 2, clause 19]
Expertise of Members
1.30 The Minister is responsible for appointing members of the
Regulator. [Part 2, Division 2, clause 18(1)] Before appointing a member, the
Minister must be satisfied that the member has substantial experience or
knowledge and significant standing in at least one of the following fields:
· economics
· industry
· energy production and supply
14
Chapter 1 Clean Energy Regulator
· energy measurement and reporting
· greenhouse gas emissions measurement and reporting
· greenhouse gas abatement measures
· financial markets
· trading of environmental instruments
· land resource management
· public administration.
[Part 2, Division 2, clause 18(2)]
1.31 This list reflects the wide range of skills and expertise necessary
for the Regulator to perform its functions at the highest possible quality.
Recognising its regulatory functions, this list differs, in some significant
respects, from the relevant fields of knowledge required of Authority
members. For instance, in contrast to the Authority, `climate science' is
not listed as a relevant field of knowledge for the Regulator. This is
because the Regulator's focus is on administration and enforcement of the
climate change programs, rather than advising on major policy issues (such
as emissions reductions trajectories) where a knowledge of climate science
would be valuable.
1.32 Public administration skills and experience are highly relevant to
the functions of Regulator members. In order to ensure proper use and
management of public money, public property and other Commonwealth
resources, the Regulator will be subject to the Financial Management and
Accountability Act 1997. The Chair of the Regulator will perform
functions and exercise powers relating to public administration as the
Chief Executive under this legislation.
1.33 The Chair of the Regulator is the head of a Statutory Agency
under the Public Service Act 1999 and can employ Australian Public
Sector employees on behalf of the Commonwealth. The Chair will be
expected to direct these staff in their duties.
Acting Members
1.34 The bill anticipates that a member of the Regulator may be
unable to perform the duties of the office from time to time, such as when
absent from Australia. The Minister can appoint an Acting Chair or
Acting Member (as appropriate) in such circumstances. [Part 2, Division 2,
clause 20]
1.35 The Minister may also appoint an additional member or members
to the Regulator if there is a vacancy - that is, where there are less than
15
Clean Energy Regulator Bill 2011
four members in addition to the Chair. [Part 2, Division 2, clause 20] [Part 1,
clause 5]1
Terms and conditions for members of the Regulator
Remuneration and entitlements of Regulator members
1.36 Members of the Regulator are to be paid at a rate determined by
the Remuneration Tribunal, the independent tribunal established under the
Remuneration Tribunal Act 1973 to handle the remuneration of key
Commonwealth offices. Where no determination has been made by the
Tribunal, members are paid at the rate prescribed in regulations. [Part 2,
Division 3, clause 21]
1.37 A full-time member of the Regulator has the recreation leave
entitlements determined by the Remuneration Tribunal, and may be
granted additional leave (other than recreation leave) by the Minister.
[Part 2, Division 3, clause 25]
1.38 The Chair of the Regulator may grant leave of absence to a part-
time member on terms and conditions decided by the Chair. [Part 2, Division
3, clause 25] It is not possible for recreation leave for part-time members to
be set by the Remuneration Tribunal, as the Remuneration Tribunal Act
only authorises determinations for full-time members of bodies like the
Regulator (see section 7(3AA) of the Remuneration Tribunal Act 1973).
Resignation and Termination
1.39 A Regulator member may resign by giving the Minister a written
resignation. [Part 2, Division 3, clause 26]
1.40 The Minister may only terminate an appointment on narrow
grounds, including for misbehaviour, physical or mental incapacity or
repeated absence from meetings of the Regulator. [Part 2, Division 3,
clause 27]
1.41 In the event that any terms and conditions of employment need to
be specified and are not already dealt with in the bill, the Minister may
make a determination on those matters. [Part 2, Division 3, clause 28]
Decision-making by the Regulator
1.42 The bill is not prescriptive as to how the Regulator should make
decisions. Subject to some minimum requirements, the Regulator can
regulate proceedings at its meetings as it sees appropriate. [Part 2, Division 4,
clause 33]
1
The Acts Interpretation Act 1901 was amended by the Acts Interpretation Amendment Act
2011 to insert new section 33AB. Section 33AB applies to acting appointments and provides
that irregularities or defects in an appointment do not invalidate the past acts of the
appointee, even if those irregularities or defects could be such as to invalidate the
appointment. The bill will commence after the Acts Interpretation Amendment Act 2011
16
Chapter 1 Clean Energy Regulator
1.43 These minimum requirements are:
· the Regulator should hold such meetings as are necessary for
the performance of its functions [Part 2, Division 4, clause 29]
· the Chair presides at all meetings at which he or she is
present [Part 2, Division 4, clause 30(1)]
· if the Chair is not present, the other members present must
appoint one of themselves to preside [Part 2, Division 4,
clause 30(2)]
· two members constitute a quorum [Part 2, Division 4, clause 31]
· questions are resolved by a majority of votes [Part 2, Division 4,
clause 32]
· if votes are evenly split, the presiding member has a casting
vote [Part 2, Division 4, clause 32]
· the Regulator must keep minutes of its meetings. [Part 2,
Division 4, clause 34]
Conflicts of interest
1.44 The bill contains a number of provisions aimed at ensuring that
the Regulator's members do not have interests that conflict with the proper
performance of their duties. In particular, the bill establishes:
· a general requirement that members must give written notice
to the Minister of all interests that conflict, or could conflict,
with the proper performance of their functions [Part 2,
Division 3, clause 22]
· a specific requirement that members disclose to a meeting of
the Regulator a conflict of interest in any matter before the
Regulator, and absent themselves from any deliberation or
decision with respect to that matter unless the Regulator
otherwise determines [Part 2, Division 3, clause 23]
· a prohibition on a full-time member of the Regulator from
engaging in any other paid employment without the
Minister's approval [Part 2, Division 3, clause 24(1)]
· a prohibition on any part-time member from engaging in any
paid employment that conflicts, or may conflict, with the
proper performance of his or her duties. [Part 2, Division 3,
clause 24(2)]
1.45 A failure to comply with above requirements may provide
grounds for the termination of a member's appointment. [Part 2, Division 3,
clause 27(2)]
17
Clean Energy Regulator Bill 2011
Resourcing
Staff
1.46 For the purposes of the Public Service Act 1999, the Chair of the
Regulator is the head of a Statutory Agency and can employ Australian
Public Sector employees on behalf of the Commonwealth. [Part 2, Division
6, clause 36]
1.47 In order to ensure clear lines of accountability between the Chair
and staff, the Chair is not subject to direction by the Regulator in relation
to his or her actions taken under the Public Service Act 1999. [Part 2,
Division 9, clause 42]
1.48 The consequential amendments bill provides that staff transferred
to the Regulator from the Department and the Office of the Renewable
Energy Regulator will continue to be employed under the same terms and
conditions as their previous employment (until the commencement of any
new enterprise agreement entered into between the Chair and the staff of
the Regulator).
Consultants
1.49 The Regulator also has the power to engage persons with suitable
qualifications and experience as consultants. [Part 2, Division 6, clause 38]
Other public sector employees
1.50 The Regulator may also be assisted by public sector officers and
employees from the Australian, state and territory governments, where
their services are made available. [Part 2, Division 6, clause 37]
Planning obligations
1.51 The Regulator must prepare a corporate plan at least once in each
3 year period, which sets out the objectives of the Regulator and the
strategies and policies that are to be followed to achieve those objectives.
[Part 2, Division 7, clause 39(1)-(3)]
1.52 In addition to these general requirements, the corporate plan must
also include details on any other matter that the Minister requires. [Part 2,
Division 7, clause 39(3)(c)]
1.53 However, there is no requirement for the Minister to amend or
approve the corporate plan.
1.54 Once a corporate plan has been prepared, the Chair must keep the
Minister informed as to changes to the plan and matters that might
significantly affect the achievement of the objectives set out in the plan.
[Part 2, Division 7, clause 39(4)]
1.55 The Minister may give the Chair guidelines to use in preparing
the Corporate Plan, or informing the Minister. [Part 2, Division 7, clause 39(5)]
These guidelines are not legislative instruments. They are not of a
18
Chapter 1 Clean Energy Regulator
legislative character and are therefore not within the meaning of section 5
of the Legislative Instruments Act 2003. The provision is included to
indicate that an exemption from the Legislative Instruments Act 2003 is not
sought or required. [Part 2, Division 7, clause 39(6)]
1.56 The first corporate plan must be prepared within 12 months after
the commencement of proposed section 39 of the bill - in effect within 12
months of commencement of the substance of the main bill, which is on a
day to be fixed by Proclamation. [Part 2, Division 7, clause 39(7)]
Annual reports
1.57 The Regulator is required to prepare an annual report for each
financial year, for presentation by the Minister to Parliament. [Part 2,
Division 7, clause 40(1)]
1.58 The annual report will set out
· a description of the objectives of the Regulator
· an assessment of the extent to which the Regulator's
operations during the year have achieved those objectives.
[Part 2, Division 7, clause 40(2) and (3)]
1.59 The Regulator's annual reports are in addition to reports under
section 105 of Renewable Energy (Electricity) Act 2000, which are
provided on a calendar year basis. [Part 2, Division 7, clause 40(4) and (5)]
1.60 The Regulator's main annual report need only include a
summary of the separate renewable energy annual report. [Part 2, Division 7,
clause 40(4) and (5)]
Release of information
1.61 Information obtained by the Regulator may be commercially
sensitive. For example, it could disclose the market share of a corporation,
or details of its supply arrangements. The bill seeks to ensure that
information obtained by the Regulator is not disclosed unnecessarily or put
to unauthorised use. Personal information collected under Part 3 of the bill
is subject to the Privacy Act 1988. It should be noted that, under
Information Privacy Principle 11.3, a person, body or agency to whom
personal information is disclosed shall not use or disclose the information
for a purpose other than the purpose for which the information was given
to the person, body or agency.
Primary disclosure offence
1.62 It is an offence for a person who is, or has been an official of the
Regulator to disclose or use `protected information' - in broad terms,
information obtained in an official capacity - unless one of a number of
exceptions apply. The penalty for that offence is up to two years'
imprisonment or 120 penalty units (which currently equates to $13,200), or
19
Clean Energy Regulator Bill 2011
both. [Part 3, clause 43] This penalty is the same as applies to a similar
offence in secrecy provisions (section 23) of the National Greenhouse and
Energy Reporting Act 2007.
1.63 `Official of the Regulator' is defined broadly to include not only
Regulator members and staff, but also:
· public sector employees (State or Commonwealth) whose
services are made available to the Regulator in connection
with the performance of its functions and
· consultants engaged by the Regulator.
[Part 1, clause 4 definition of `official of the regulator']
Exceptions to primary disclosure offence
1.64 In broad terms, the exceptions - that is, the circumstances in
which `protected information' can be disclosed or used - are:
· disclosure or use for the purposes of a `climate change law'
(for example, disclosure of greenhouse and energy
information in accordance with section 26 of the National
Greenhouse and Energy Reporting Act 2007) [Part 3, clause 44]
· disclosure to the Minister, to a Minister administering a
program or collecting statistics in relation to greenhouse gas
emissions, energy consumption or energy production, or to a
member of these Ministers' staff [Part 3, clause 45]
· disclosure to the Secretary of the Department (or person
authorised by the Secretary), where the disclosure is for the
purposes of advising the Minister, facilitating the monitoring
of Australia's compliance with relevant international
obligations or facilitating the development of an international
agreement that relates to climate change [Part 3, clause 46]
· disclosure to the Secretary of a Department with a Minister
administering a program or collecting statistics in relation to
greenhouse gas emissions, energy consumption or energy
production, or to persons authorised by that Secretary, where
the disclosure is for purposes of advising that Minister, the
administration of such a program, or the collection of such
statistics [Part 3, clause 46]
· disclosure to a Royal Commission [Part 3, clause 48]
· disclosure to specified agencies, bodies and persons where
the Chair of the Regulator is satisfied that the information
will assist those agencies in carrying out their functions,
including:
- a range of specified Commonwealth agencies
20
Chapter 1 Clean Energy Regulator
- certain specified bodies connected with the operation and
oversight of the energy market
- a State/Territory government body or foreign government
body with a function which corresponds to a function of
the Regulator (this will enable information exchange as
part of possible future international linking arrangements
for the carbon price mechanism, and release of
greenhouse and energy data to State and Territory
governments)
- an international climate change body (this is intended to
cover situations where information is provided in order to
assist in meeting Australia's international obligations. For
example, NGER data would be provided to Expert
Review Teams under the UNFCCC if they conduct
independent verifications of Australia's national
greenhouse inventory) [Part 1, clause 4, definition of
`international climate change body']
- prescribed professional disciplinary bodies [Part 3,
clause 49]
· disclosure to certain operators of financial markets and
clearing and settlement facilities, where that body is specified
in regulations and where the Chair of the Regulator is
satisfied that the information will assist such bodies in
carrying out their functions [Part 3, clause 50]
· disclosure with the consent of the affected person [Part 3,
clause 51]
· disclosure to reduce threat to life or health [Part 3, clause 52]
· disclosure where the material is already publicly available
[Part 3, clause 53]
· disclosure where the summaries of the information, or
statistics derived from the information, are released and this
release is not likely to enable the identification of a person
[Part 3, clause 54]
· disclosure where reasonable necessary for the enforcement of
the criminal law, imposing a pecuniary penalty or the
protecting of the public revenue. [Part 3, clause 55]
1.65 To assist CFI methodology applicants and the government in
continued methodology development and in improving accounting
techniques, some protected information can be disclosed or used when
seven years have passed since the information was provided to the
Regulator. This applies to information relating to offsets projects or
methodologies which was provided when the application for a project
declaration or a methodology determination was made. The Regulator
21
Clean Energy Regulator Bill 2011
may disclose this information if the disclosure or use is to facilitate the
development of methodology determinations. [Schedule 3, clause 47(1) and (2)]
However, this provision for disclosure does not apply to personal
information within the meaning of the Privacy Act 1988. [Schedule 3,
clause 47(3)]
Evidential burden
1.66 In any prosecution, the defendant will have the evidential burden
with respect to the exceptions outlined above. [Part 3, clause 43(2)] This is
justified because in many cases it is peculiarly within the defendant's
knowledge as to which of the exceptions, if any, apply. The effect is that
the defendant must adduce or point to evidence that suggests a reasonable
possibility that one of the exceptions applies. Once this is done, the
prosecution must refute this beyond reasonable doubt to obtain a
conviction. (See Criminal Code, section 13.3).
Secondary disclosure offences
1.67 The bill also contains measures to ensure that once protected
information has been disclosed for one of the above reasons, further
disclosures only take place to the extent necessary.
1.68 In most cases, the Chair of the Regulator may impose conditions
in relation to protected information, and a person commits an offence if
they engage in conduct in breach of a condition. This offence is
punishable by a penalty of up to two years' imprisonment or 120 penalty
units (currently $13,200), or both. [Part 3, clause 50(3) and (4)]
1.69 A specific offence applies to professional disciplinary bodies,
and members of professional disciplinary bodies, that improperly release
protected information. Where a professional disciplinary body, or a
member of such a body, receives protected information from the Regulator
it must only disclose or use that information, with the consent of the
Regulator, for the purposes of taking disciplinary or other action, or
deciding whether or not to take such action. [Part 3, clause 50(6) and (7)]
1.70 The defendant will have an evidential burden with respect to the
question of whether the information was disclosed or used for the purposes
of taking disciplinary or other action, or deciding whether or not to take
such action. Again, the justification is that these matters will be peculiarly
within the defendant's knowledge.
1.71 Specific offences also apply to operators of prescribed financial
markets and clearing and settlement facilities. Conditions specified by the
Chair may apply to the body itself and its officers, employees and agents.
It is an offence for any of those persons to breach the conditions. This
offence is punishable by a penalty of up to two years' imprisonment or 120
penalty units (currently $13,200), or both. Again, this penalty is consistent
with the penalty applying to secrecy provisions of the National
Greenhouse and Energy Reporting Act 2007. [Part 3, clause 50(6)]
22
Chapter 1 Clean Energy Regulator
1.72 The bill also creates a more general offence relating to prescribed
operators of financial markets and clearing and settlement facilities. If that
body, or an officer, employee or agent of that body, uses or discloses
protected information to another person, then they commit an offence unless:
· the disclosure or use is with the consent of the Chair of the
Regulator or
· the disclosure or use is for the purpose of monitoring
compliance with, enforcing, or performing functions or
exercising powers under
- the Corporations Act 2001
- the business law of a State or Territory
- the business law of a foreign country or
- the operating rules (if any) of the body corporate. [Part 3,
clause 50(6) and (7)]
1.73 The defendant will have an evidential burden with respect to the
question of whether one of the above exceptions applies. The justification
is that the purpose of the disclosure or use of the information will be
peculiarly within the defendant's knowledge.
1.74 The offences applying to operators of financial markets and
clearing and settlement facilities are similar to those presently applying to
those bodies under section 127 of the Australian Securities and Investment
Commission Act 2001.
Delegation by the Chair
1.75 The Chair may, by writing, delegate to another member of the
Regulator the Chair's functions or powers relating to disclosure of
information, or part of those functions or powers. [Part 3, clause 56]
Other matters
1.76 The bill applies to the Australian, state and territory
governments. [Part 1, clause 6]
1.77 The bill extends to all of Australia's external territories, and to
matters within Australia's sovereign rights in the exclusive economic zone
and continental shelf2. [Part 1, clause 7] [Part 1, clause 8]
1.78 As with clause 11 of the main bill, the bill extends to the Joint
Petroleum Development Area as defined in the Petroleum (East Timor
2
The Acts Interpretation Act 1901 was amended by the Acts Interpretation Amendment Act
2011 to define the terms `continental shelf', `exclusive economic zone' and `territorial sea'
in section 2B by reference to the Seas and Submerged Lands Act 1973. The bill will
commence after the Acts Interpretation Amendment Act 2011.
23
Clean Energy Regulator Bill 2011
Sea) Treaty Act 2003. [Part 1, clause 4, definition of `Joint Petroleum Development
Area'] [Part 1, clause 9]
1.79 The express application of the Act to the Joint Petroleum
Development Area--an agreed joint development area under the Timor
Sea Treaty [2003] ATS 13--is consistent with the obligations of Australia
under article 4(1) of the Treaty between Australia and Timor-Leste on
Certain Maritime Arrangements in the Timor Sea [2007] ATS 12.
1.80 The bill does not apply in a manner that is inconsistent with the
exercise of rights of foreign ships to the territorial sea, exclusive economic
zone or waters of the continental shelf in accordance with the United
Nations Convention on the Law of the Sea. [Part 1, clause 10] [Part 1, clause 4
definition of `United Nations Convention on the Law of the Sea']
1.81 The bill contains a standard regulation-making power. [Part 4,
clause 57]
1.82 The short title of the bill is at clause 1, and a simplified outline of
the bill is at clause 3. [Part 1, clause 1] [Part 1, clause 3]
1.83 Definitions of words used in the bill are set out in clause 4.
[Part 1, clause 4]
Application and transitional provisions
1.84 The operative provisions of the bill come into effect at the same
time as section 3 of the Clean Energy Act 2011, which is a single day to
be fixed by Proclamation. [Part 1, clause 2]
1.85 This is conditional on other bills essential to the operation of the
Clean Energy Plan legislation also receiving Royal Assent: clause 2 of the
main bill.
Consequential amendments
1.86 Consequential amendments, to absorb the current functions of
the Renewable Energy Regulator and Greenhouse and Energy Data
Officer into the Regulator and to amend the Carbon Farming Initiative,
also come into effect at the same time as section 3 of the Clean Energy
Act 2011: clause 2 of the main bill.
24
Index
Part 1: Preliminary
Bill reference Paragraph number
Clause 1 1.82
Clause 2 1.84
Clause 3 1.82
Clause 4 definition of `United Nations Convention on the Law of the 1.80
Sea'
Clause 4 definition of `official of the regulator' 1.63
Clause 4, definition of `international climate change body' 1.64
Clause 4 1.83
Clause 4, definition of `Joint Petroleum Development Area' 1.78
Clause 5 1.35
Clause 6 1.76
Clause 7 1.77
Clause 8 1.77
Clause 9 1.78
Clause 10 1.80
Part 2: Clean Energy Regulator
Bill reference Paragraph number
Division 1, clause 11 1.16
Division 1, clause 12 1.21
Division 1, clause 13(1) 1.23
Division 1, clause 13(2) 1.24
Division 1, clause 13(3) 1.20
Division 1, clause 13(4) 1.20
Division 1, clause 13(5) 1.20
Division 1, clause 14 1.20
Division 1, clause 15 1.20
25
Clean Energy Regulator Bill 2011
Division 2, clause 16 1.17
Division 2, clause 17 1.17, 1.27
Division 2, clause 18(1) 1.30
Division 2, clause 18(2) 1.30
Division 2, clause 18(3) and 18(4) 1.28
Division 2, clause 19 1.29
Division 2, clause 20 1.34, 1.35
Division 3, clause 21 1.36
Division 3, clause 22 1.44
Division 3, clause 23 1.44
Division 3, clause 24(1) 1.44
Division 3, clause 24(2) 1.44
Division 3, clause 25 1.37, 1.38
Division 3, clause 26 1.39
Division 3, clause 27 1.40
Division 3, clause 27(2) 1.45
Division 3, clause 28 1.41
Division 4, clause 29 1.43
Division 4, clause 30(1) 1.43
Division 4, clause 30(2) 1.43
Division 4, clause 31 1.43
Division 4, clause 32 1.43
Division 4, clause 33 1.42
Division 4, clause 34 1.43
Division 5, clause 35 1.26
Division 6, clause 36 1.46
Division 6, clause 37 1.50
Division 6, clause 38 1.49
Division 7, clause 39(1)-(3) 1.51
Division 7, clause 39(3)(c) 1.52
Division 7, clause 39(4) 1.54
Division 7, clause 39(7) 1.56
Division 7, clause 39(5) 1.55
Division 7, clause 39(6) 1.55
Division 7, clause 40(1) 1.57
Division 7, clause 40(2) and (3) 1.58
Division 7, clause 40(4) and (5) 1.59, 1.60
26
Index
Division 8, clause 41 1.18, 1.19
Division 9, clause 42 1.47
Part 3: Secrecy
Bill reference Paragraph number
Clause 43 1.62
Clause 43(2) 1.66
Clause 44 1.64
Clause 45 1.64
Clause 46 1.64
Clause 47(1) and (2) 1.65
Clause 47(3) 1.65
Clause 48 1.64
Clause 49 1.64
Clause 50 1.64
Clause 50(3) and (4) 1.68
Clause 50(6) 1.71
Clause 50(6) and (7) 1.69, 1.72
Clause 51 1.64
Clause 52 1.64
Clause 53 1.64
Clause 54 1.64
Clause 55 1.64
Clause 56 1.75
Part 4: Miscellaneous
Bill reference Paragraph number
Clause 57 1.81
27