Commonwealth of Australia Explanatory Memoranda

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GREEN NEW DEAL (QUIT COAL AND RENEW AUSTRALIA) BILL 2020

                       2019 - 2020




THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA




             HOUSE OF REPRESENTATIVES




 Green New Deal (Quit Coal and Renew Australia) Bill 2020




             EXPLANATORY MEMORANDUM
                           and
  STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS




                 Circulated by authority of
                     Adam Bandt MP



                                                            1


Green New Deal (Quit Coal and Renew Australia) Bill 2020 OUTLINE The Bill help tackle the climate emergency and drive Australia's transition to new clean energy systems by:  Establishing Renew Australia, a public authority to lead the transition by working with communities, energy companies and the government to: o Propose reforms to electricity generation laws in order to transition Australia to 100% renewable electricity generation by 2030, phase out the generation of electricity from fossil fuels, phase out thermal coal exports and reduce energy costs to households and businesses; o Provide advice to all levels of government about sources of renewable energy, the viability of projects, models for guaranteeing returns on investment and how to support and assist communities and workers affected by the closure of coal-fired power stations; o Build, finance, own or operation renewable energy projects and run reverse auctions for new private sector renewable energy projects; o Support communities and workers affected by the transition to adapt by building any appropriate renewable energy infrastructure in those areas and by helping to attract new industries;  Prohibit the mining, burning and the export and importation of thermal coal in Australia by: o Prohibiting the establishment of a new coal mine or coal-fired power station or the expansion of existing mines or stations from the date of Royal Assent; o Phasing out the export of thermal coal by 2030; o Prohibiting the mining or burning of coal after 1 January 2030; o Prohibiting the importation of thermal coal to Australia, with the exception of research or heritage purposes; o Putting in place significant penalties including up to 7 years imprisonment in some cases for breaches of the Act. FINANCIAL IMPACT The bill will have no financial impact. NOTES ON CLAUSES Clause 1: Short Title This clause provides for the Act to be cited as the Green New Deal (Quit Coal and Renew Australia) Act 2020. 2


Clause 2: Commencement This clause provides for the whole of this Act to commence on the day when a budget appropriation is made for the operation of the Renew Australia authority. Clause 3: Objects This clause provides the objectives of the Act: (a) to help reduce Australia's greenhouse gas pollution by transforming Australia's electricity system to one based on renewable energy and by phasing out the use, import and export of thermal coal; and (b) to create a new statutory authority, Renew Australia, to oversee the transformation of Australia's electricity system and the phasing out of thermal coal; and (c) to achieve the new energy objectives; and (d) to ensure that communities in affected areas are supported during the transition to a new national energy system and to new export industries; and (e) to ensure the closure of coal-fired power stations and their replacement with renewable energy happens in a planned manner. Clause 4: Simplified outline of this Act This clause provides an overview of what the Act does. The Act establishes Renew Australia, an authority with delegated functions to achieve the new energy objectives set out in Division 2, section 11(2). Renew Australia has law reform functions, an advice function, and renewable energy project functions, relating to achieving the new energy objectives. This Act also sets out restrictions on activities involving thermal coal, including the importation and exportation of thermal coal and other thermal coal activities (see Part 6). Some exceptions are provided for research, analysis or display purposes. Clause 5: Definitions This clause provides definitions for terms used in the Act. Clause 6: Crown to be bound This clause binds the Crown in each of its capacities but does not make the Crown liable to be prosecuted for an offence. Clause 7: Extension to external Territories This clause states the Act extends to every external Territory. Clause 8: Extra-territorial application This clause states the Act extends to acts, omissions, matters and things outside Australia. 3


Part - 2 Renew Australia Division 1 - Establishment Item 9: Establishment Establishes Renew Australia as a body corporate that must have a seal, may acquire, hold and dispose of real and personal property and may sue and can be sued. Division 2 - Functions Item 10: Functions - general States Renew Australia must act in a proper, efficient and effective manner in performing its functions which are: (a) its law reform functions (see section 11); (b) its advice functions (see section 12); (c) its renewable energy project functions (see section 13); (d) to support communities and workers affected by the closure of coal-fired power stations and thermal coal mines to adapt by building any appropriate renewable energy infrastructure in those areas and by helping to attract new industries; Renew Australia will also have any other functions conferred by the Act or other Commonwealth law. It can also do anything incidental or conductive to the performance of the above functions. Item 11: Law reform functions Outlines Renew Australia's law reform functions which includes outlining the new energy objectives, providing responsibility to lay out a timetable for planned closure of coal-fired power stations, outlining principles for investment in the national electricity grid, stipulating that the desirability of complementary legislation at all levels of government must be considered when considering law reform and if complementary legislation isn't possible, it must be assumed that recommended changes will be implemented through Commonwealth legislation, stating that recommendations must be accompanied with draft legislation and that recommendations must be given to the Minister within 12 months and at other times as seen fit. (1) Renew Australia's law reform functions: (a) to review Commonwealth, State and Territory laws relating to electricity generation and propose changes to those laws for the purpose of achieving the new energy objectives; and (b) to consult with Commonwealth, State and Territory governments about the proposed changes; and (a) after consulting as mentioned in paragraph (b), to recommend to the Minister changes to Commonwealth laws for the purpose of achieving the new energy objectives; and (b) to publish the results of reviews mentioned in paragraph (a), and the changes recommended under paragraph (c), on its website. (2) Renew Australia's new energy objectives: (a) to achieve a transition in generating electricity in Australia, so that by 2030: 4


(i) 100% of electricity generated in Australia is derived from renewable energy sources; and (ii) electricity generation capacity in Australia is increased to 358 TWh, to allow for the electrification of non-electrified sectors; (b) to phase out the generation of electricity in Australia from fossil fuels; (c) to maintain supply of electricity in Australia while the transition mentioned in paragraph (a) is achieved; (d) to lower energy costs to households and businesses, including by enabling them to become generators of electricity from renewable energy sources; (e) to make Australia a destination of choice for industry seeking reliable and clean energy; (f) to have a national electricity grid that is suited to the transition mentioned in paragraph (a) and to which generators of electricity from renewable energy sources have a right to connect; (g) to phase out exportation of thermal coal. (3) Timetable for closure of coal-fired power stations Renew Australia must have regard to a timetable for the staged closure of coal-fired power stations when performing it's law reform functions. The timetable is set out in Schedule 1 but Renew Australia can replace the timetable providing it is published on its website within 12 months after the commencement of this section. (4) Investment in the national electricity grid Renew Australia must have regarding to the following principles when performing its law reform functions in relation to investment in the national electricity grid: (a) any new investment in the national electricity grid must be compatible with the new energy objectives; (b) the method for approving investment in the national electricity grid at the commencement of this section (including the Regulated Asset Base model of guaranteeing returns on investment) should be replaced with a method appropriate to achieving the new energy objectives. (5)-(6) Complementary legislation desirable Renew Australia must consider the desirability of complementary Commonwealth, State and Territory legislation when considering law reform under paragraph (1)(b). (7) Draft legislation to accompany recommendations to Minister Changes recommended by Renew Australia must be accompanied by draft legislation. (8) When recommendation must be given to Minister Renew Australia must give the Minister recommendations for law reform within 12 months of the commencement of this section and at other times as thinks fit. Item 12: Advice Functions 5


States that Renew Australia's advice function is to provide and publish advice to the Minister and all levels of government for the purpose of achieving new energy objectives including advice on sources of renewable energy, particular electricity generation projects, models for return on investment on electricity generation projects and how affected communities and workers can adapt. Item 13: Renewable energy project functions States Renew Australia's renewable energy project functions are to build, finance, own or operation renewable energy projects and run reverse auctions for new private sector renewable energy projects. These actions can only be taken if they are in the public interest, when determining whether an action is in the public interest Renew Australia must have regard to whether it is desirable for the action to be taken by a government body and any other matter Renew Australia considers relevant. Item 14: Functions - constitutional limits Outlines the constitutional limits under which Renew Australia operates. Item 15: Functions - Minister may give directions The Minister may give directions to Renew Australia to which Renew Australia must comply. These directions are to be in writing and only of a general nature and are not a legislative instrument. Item 16: Commonwealth consent to conferral of functions etc. on Renew Australia by State and Territory laws States that a law of a State or Territory may confer powers or functions on Renew Australia however these powers are not authorised if they contradict Renew Australia's constitutional limits or exceed the legislative power of the Commonwealth. Renew Australia cannot exercise a power, or perform a duty or function, under a law of a State or Territory without the written approval of the Minister. Item 17: How duty is imposed on Renew Australia by State and Territory laws Outlines how duty is imposed on Renew Australia by State and Territory laws. Duties that are within the legislative powers of the State or Territory concerned, or contradict Renew Australia's constitutional limits, are not imposed on Renew Australia. Item 18: When State and Territory laws impose a duty on Renew Australia Outlines when State and Territory laws impose duty on Renew Australia for the purposes of sections 16 and 17. Division 3 - Powers, privileges and immunities Item 19: Renew Australia's powers 6


Sets out Renew Australia's powers to do what is necessary or convenient in order to perform its functions and states that these powers may be exercised within or outside Australia. This includes the power to enter into contracts; erect buildings; occupy, use and control any land or building that is made available and owned or held under lease by the Commonwealth; acquire, hold and dispose of real or personal property; provide financial assistance; provide guarantees; raise money (including borrowing); provide or administer services, facilities, programs or equipment and anything incidental to any of its powers. Item 20: Renew Australia does not have privileges and immunities of the Crown Provides that Renew Australia does not have the privileges and immunities of the Crown. Part 3 - Board of Renew Australia Division 1 - Establishment and functions Item 21: Establishment Establishes the Board of Renew Australia. Item 22: Functions of the Board States that the Board has powers to do what is necessary or convenient in order to perform its functions which are: (a) to decide strategies and policies to be followed; and (b) to ensure the proper, efficient and effective performance of Renew Australia's functions; and (c) any other functions conferred on the Board by this Act. Division 2 - Board Members Item 23: Membership States that the Board will consist of the Chair and at least 4, and no more than 6, other members. Item 24: Appointment of Board Members Outlines the eligibility of Board members, who are to be appointed by the Minister by written instrument and on a part-time basis. To appoint a Board member, the Minister must be satisfied that they have substantial experience or expertise and professional credibility and significant standing in at least one of the below fields and is not an employee of the Commonwealth or the holder of a full-time office under a law of the Commonwealth: (c) energy technologies; (d) engineering; (e) economics; (f) workplace planning; (g) industry transition planning; (h) government funding programs or bodies; (i) the environmental sector; 7


(j) financial accounting; (k) laws. Item 25: Chair The Minister must appoint a Board Member to be the Chair in writing. Item 26: Term of appointment Provides that the term of a Board member will be specified in the instrument of appointment and it must not be more than 5 years, however a Board member is eligible for reappointment as per section 33AA of the Acts Interpretation Act 1901. Item 27: Acting appointments States that if there is a vacancy for Chair, or the Chair is absent from duty, not in Australia or unable to perform the duties of the Chair, the Minister may appoint a Board member to act as the Chair via written instrument. If there is a vacancy in the Board or when a Board member is absent from duty, not in Australia or unable to perform the duties of the office, the Minister may appoint a person to act as a Board member. This person cannot be the Chair. The eligibility requirements set out in section 24 are applicable to acting appointments. Item 28: Remuneration States that the Remuneration Tribunal will determine the remuneration to be paid to a Board member and in lieu of a determination, the rules will prescribe the remuneration to be paid. Remuneration will be paid out of money appropriated by an Act other than the Remuneration Tribunal Act 1973. Item 29: Leave of absence States that the Minister may grant a leave of absence to the Chair, the terms and conditions of which will be determined by the Minister. The Chair may grant a leave of absence to any Board members, the terms and conditions of which will be determined by the Chair. If absence is granted for longer than 3 months, the Chair must notify the Minister. Item 30: Resignation of Board members States that resignation by a Board member can be done by giving the Minister a written resignation and will take effect on the day the Minister receives it or the day specified in the resignation. Item 31: Termination of appointment of Board members Provides that the Minister can terminate the appointment of a Board member due to the following: (a) for misbehaviour; or (b) if the member is unable to perform the duties of his or her office because of physical or mental incapacity; or (c) if the member: 8


(i) becomes bankrupt; or (ii) applied to take the benefit of any law for the relief of bankrupt or insolvent debtors; or (iii) compounds with his or her creditors; or (iv) or makes an assignment of his or her remuneration for the benefit of his or her creditors; or (d) if the member is absent, except on leave of absence, from 3 consecutive meetings of the Board; or (e) if the Minister is satisfied that the performance of the Board member has been unsatisfactory for a significant period. Item 32: Other terms and conditions of Board members Provides that the Minister can determine terms and conditions by which a Board member holds office that are not covered in this Act. Division 3 - Meetings of the Board Item 33: Convening meetings States that the Board must hold meetings necessary for the efficient performance of its functions and they can be held at times and places the Board determines. The Chair may convene a meeting, must convene at least 6 meetings each calendar year and must convene a meeting within 30 days of receiving a written request from another Board member. Item 34: Presiding at meetings States that the Chair must preside at which all meetings they are present and if the Chair is not present, the other Board members present must appoint one of them to preside. Item 35: Quorum States that quorum is constituted by 4 Board members or if there are only a total of 5 Board members, quorum is 3. However if it is required by rules (made for the purposes of the Public Governance, Performance and Accountability Act 2013) that a Board member not be present during deliberations or decisions relating to particular matters, and subsequently quorum in no longer present, the remaining boards members constitute quorum with respect to deliberation or decisions relating to that matter. Item 36: Voting at meetings States that questions arising during meetings must be determined by a majority of the members present. The person presiding has a deliberative vote and in the event of a tied vote, they have the a casting vote. Item 37 and 38: Conduct of meetings and minutes States that the Board may regulate proceedings at its meetings as it considers appropriate and must keep minutes of all meetings. 9


Item 39: Decisions without meetings States that the Board can determine that a decision can be made without a meeting and the method by which the member are to vote. Decisions are determined by a majority of members entitled to vote, via the agreed method and providing all Board members were informed of the proposed decision, or reasonable efforts were made to inform all member of the proposed decision. Part 4 - Chief Executive Officer, staff and consultants and committees Division 1 - Chief Executive Office of Renew Australia Item 40: Establishment Establishes that there is to be a Chief Executive Officer (CEO) of Renew Australia. Item 41: Functions of the CEO Outlines the functions of the CEO: (1) Responsible for the day-to-day administration of Renew Australia. (2) Has the power to do what is necessary or convenient in order to perform their duties. (3) Act in accordance with policies and directions given by the Board. All actions done in the name of, or on behalf of Renew Australia, by or with the authority of the CEO, are taken to have been done by Renew Australia. Item 42: Appointment States that the first CEO must be appointed no later than 6 months after the commencement of this section. The Board is to appoint the CEO by written instrument and on a full-time basis. The CEO must not be a Board member. Item 43: Terms of appointment States that the CEO will hold office for the period specified in the appointment but must not exceed 5 years. However the CEO is eligible for reappointment as per section 33AA of the Acts Interpretation Act 1901. Item 44: Acting appointments States that if there is a vacancy for CEO, or the CEO is absent from duty, not in Australia or unable to perform the duties of the CEO, the Board may appoint a person (other than a Board member) to act as the CEO via written instrument. Item 45: Terms and conditions Provides that the Board can determine terms and conditions by which the CEO holds office that are not covered in this Act. 10


Item 46: Outside employment States that the CEO must not engage in paid work outside the duties of his or her office without the Chair's approval. Item 47: Leave of absence States the Remuneration Tribunal will determine the CEO's recreational leave entitlements and the Chair may grant additional leave. Item 48: Disclosure of interests States that the CEO must make a disclosure to the Board under section 29 of the Public Governance, Performance and Accountability Act 2013 (which deals with the duty to disclose interest). Item 49: Resignation States the CEO may resign by giving the Chair a written resignation which will take effect on the day the Chair receives the resignation unless a later date is specified. Item 50: Termination of appointment Provides that: (1) The Board can terminate the appointment of the CEO due to the following: (a) for misbehaviour; or (b) if the CEO is unable to perform the duties of his or her office because of physical or mental incapacity; or (2) (a) If the CEO: (i) becomes bankrupt; or (ii) takes steps to take the benefit of any law for the relief of bankrupt or insolvent debtors; or (iii) compounds with his or her creditors; or (iv) or makes an assignment of his or her remuneration for the benefit of his or her creditors; or (b) if the CEO is absent, except on leave of absence, from 14 consecutive days or for 28 days in any 12 months; or (c) the CEO engages, except with the Board's approval, in paid work outside the duties of his or her office; or (d) the CEO fails without reasonable excuse, to comply with section 29 of the Public Governance, Performance and Accountability Act 2013 (which deals with the duty to disclose interests) or rules made for the purposes of that section. Division 2 - Staff and consultants Item 51: Staff Provides for Renew Australia to employ anyone considered necessary for the performance of its functions and to exercise its powers. 11


Through agreement with Agency Heads, a body established for a public purpose or the appropriate authority of a State or Territory, officers or employees of the said Agency, body or Public Service can be made available to Renew Australia. Item 52: Consultants Provides for Renew Australia to engage consultants. Division 3 - Committees Item 53: Committees Provides for the Board of Renew Australia to establish committees to advise or assist in the performance of their functions. The Board determines the terms or reference, the terms and conditions of appointment of the members and procedures to be followed by the committee. Item 54: Remuneration and allowances States that if the Board decides to remunerate a committee member who is also a Board member, the Remuneration Tribunal will determine the remuneration to be paid. In lieu of a determination, the rules will prescribe the remuneration to be paid. Remuneration will be paid out of money appropriated by an Act other than the Remuneration Tribunal Act 1973. If the Board decides to remunerate a committee member who is not a Board member, the remuneration to be paid will be determined by Renew Australia in writing. Part 5 - Finance Item 55: Money payable to Renew Australia Sets out that the Parliament may appropriate money for Renew Australia and that the Finance Minister may give directions about the money payable to Renew Australia. Any written direction given by the Finance Minister is not a legislative instrument. Item 56: Application of money by Renew Australia Prescribes that the application of money by Renew Australia may only be applied in the performance of its functions and the exercise of its power, or in payment of any remuneration or allowances payable under this Act. As under section 59 of the Public Governance, Performance and Accountability Act 2013, money that is not immediately required for the purpose of Renew Australia may be invested. Item 57: Borrowing from the Commonwealth Prescribes that the Finance Minister may lend money to Renew Australia out of money appropriated by the Parliament on such terms and conditions as the Minister determines in writing. Item 58: Borrowing from persons other than the Commonwealth Provides for Renew Australia may borrow money from persons other than the Commonwealth with the written approval of the Treasurer. This money may be partly or wholly in foreign currency. 12


Item 59: Guarantee of borrowing Determines that the Treasurer may guarantee the money borrowed by Renew Australia from persons other than the Commonwealth. Item 60: Renew Australia may give security Provides that Renew Australia may give security over the whole or part of its assets for the performance by Renew Australia or any obligation under section 57 or 58 or the payment to the Commonwealth of amounts paid by the Commonwealth under a guarantee. Item 61: Renew Australia may charge fees Provides that Renew Australia may charge fees in relation to its functions however the fee must not amount to taxation. Item 62: Taxation Sets out that Renew Australia is not subject to taxation under any law of the Commonwealth, State or Territory. A note on this clause prescribes that Renew Australia may be subject to taxation under certain laws, for example, section 66 of the Fringe Benefits Tax Assessment Act 1986. Part 6 - Restriction on thermal coal activities Item 63: Prohibition of the importation of thermal coal Prohibits the importation of thermal coal after 1 July 2020 for the purposes of the Customs Act 1901. Exemptions apply for research, analysis or display but is limited in scope and does not allow for purposes relating to power stations or coal mines. Item 64: Prohibition of the exportation of thermal coal Prohibits the exportation of thermal coal from Australia after 1 July 2020 unless it is before 2030 in accordance with permission granted by the Minister. The Minister may grant permission up to the thermal coal export limit for that calendar year specified in the table - thermal coal exportation limit in subsection 7. This section also outlines offences for contravention of this section. Exemptions apply for research, analysis or display. Item 65: Offences relating to thermal coal activity Prohibits actions involving thermal coal activities and creates offences for engaging in these activities. Actions has the same meaning as in the Environment Protection and Biodiversity Conservation Act 1999. Exemptions apply for research, analysis or display. Item 66: What is thermal coal activity? 13


Defines thermal coal activity as any of the following: (a) establishing, expanding, operating or modifying a coal mine at which thermal coal is, or is to be, extracted; (b) handling, stockpiling, processing or transporting thermal coal extracted from a mine; (c) establishing, expanding, operating or modifying a power station that generates, or is to generate, electricity from thermal coal (whether or not the power station also generates or is also to generate, electricity from another other than thermal coal); (d) any other action prescribed by the rules. Item 67: Criminal liability of executive officers of bodies cooperate Provides for penalties for executive officers of a body corporate who contravenes section 65 and knew, was reckless or negligent as to whether the contravention would occur, was in a position to influence the conduct of the body corporate and failed to take reasonable steps to prevent the contravention. Item 68: Constitutional matters Clarifies that the provision of this Part do not apply to the extent (if any) to which their operation would result in an acquisition of property (within the meaning of paragraph 51(xxxi) of the Constitution) from a person otherwise than on just terms (within the meaning of that paragraph of the Constitution). Part 7 - Miscellaneous Item 69: Delegation by Renew Australia Provides that Renew Australia may delegate all or any of its powers or functions under this Act to a board member or the CEO. In exercising these powers, the delegate must comply with any directions of Renew Australia. Item 70: Delegation by the Board Provides that the board may delegate any of its powers or functions under this Act to a board member or the CEO. In exercising these powers, the delegate must comply with any directions of Renew Australia. Item 71: Delegation and subdelegation by CEO Provides that the CEO may delegate any CEO powers or function to a senior member of staff referred to in section 51. In exercising these powers the delegate must comply with any directions of the CEO. Item 72: Rules Provides that the Minister may, by legislative instrument, prescribe matters by making rules. These rules cannot create an offence or civil penalty, provide power of arrest, detention, entry search or seizure, impose a tax, determine an amount to be appropriated from the Consolidated Revenue Fund under an appropriation un this Act or directly amend the text of this Act. 14


Schedule 1 - Timetable for phased closure of coal-fired power stations Sets out the proposed timetable for phased closure of coal-fired power stations referred to in section 64. 15


STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 Green New Deal (Quit Coal and Renew Australia) Bill 2020 This bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. Overview of the bill The Bill help tackle the climate emergency and drive Australia's transition to new clean energy systems by:  Establishing Renew Australia, a public authority to lead the transition by working with communities, energy companies and the government to: o Propose reforms to electricity generation laws in order to transition Australia to 100% renewable electricity generation by 2030, phase out the generation of electricity from fossil fuels, phase out thermal coal exports and reduce energy costs to households and businesses; o Provide advice to all levels of government about sources of renewable energy, the viability of projects, models for guaranteeing returns on investment and how to support and assist communities and workers affected by the closure of coal-fired power stations; o Build, finance, own or operation renewable energy projects and run reverse auctions for new private sector renewable energy projects; o Support communities and workers affected by the transition to adapt by building any appropriate renewable energy infrastructure in those areas and by helping to attract new industries;  Prohibit the mining, burning and the export and importation of thermal coal in Australia by: o Prohibiting the establishment of a new coal mine or coal-fired power station or the expansion of existing mines or stations from the date of Royal Assent; o Phasing out the export of thermal coal by 2030; o Prohibiting the mining or burning of coal after 1 January 2030; o Prohibiting the importation of thermal coal to Australia, with the exception of research or heritage purposes; o Putting in place significant penalties including up to 7 years imprisonment in some cases for breaches of the Act. Human rights implications This bill does not engage any of the applicable rights or freedoms. 16


Conclusion This bill is compatible with human rights because it does not raise any human rights issues other than promoting safety and security of human life by minimising climate change. Adam Bandt MP 17


 


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