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Carbon Credits (Carbon Farming Initiative) Bill 2011

2010-2011

 

The Parliament of the

Commonwealth of Australia

 

HOUSE OF REPRESENTATIVES

 

 

 

 

As passed by both Houses

 

 

 

 

 

 

 

 

 

Carbon Credits (Carbon Farming Initiative) Bill 2011

 

No.      , 2011

 

 

 

 

 

A Bill for an Act about projects to remove carbon dioxide from the atmosphere and projects to avoid emissions of greenhouse gases, and for other purposes

   

   

   



Contents

Part 1—Preliminary                                                                                                              1

1............ Short title............................................................................................. 1

2............ Commencement................................................................................... 2

3............ Objects................................................................................................ 3

4............ Simplified outline................................................................................ 3

5............ Definitions.......................................................................................... 4

6............ Vacancy in the office of a Domestic Offsets Integrity Committee member              23

7............ Electronic notice transmitted to the Administrator............................. 23

8............ Crown to be bound........................................................................... 24

9............ Extension to external Territories........................................................ 25

Part 2—Issue of Australian carbon credit units in respect of offsets projects       26

Division 1—Introduction                                                                                           26

10.......... Simplified outline.............................................................................. 26

Division 2—Issue of Australian carbon credit units in respect of offsets projects           27

11.......... Issue of Australian carbon credit units in respect of offsets projects. 27

Division 3—Certificate of entitlement                                                                29

12.......... Application for certificate of entitlement............................................ 29

13.......... Form of application........................................................................... 29

14.......... Further information........................................................................... 30

15.......... Issue of certificate of entitlement....................................................... 30

16.......... Unit entitlement—sequestration offsets projects other than native forest protection projects    32

17.......... Unit entitlement—native forest protection projects............................ 33

18.......... Unit entitlement—emissions avoidance offsets project..................... 35

19.......... Cancellation of units issued in respect of a project that is subject to the voluntary automatic unit cancellation regime.......................................................................................................... 35

20.......... Certificate of entitlement not transferable.......................................... 36

Part 3—Eligible offsets projects                                                                                   37

Division 1—Introduction                                                                                           37

21.......... Simplified outline.............................................................................. 37

Division 2—Declaration of eligible offsets project                                      38

22.......... Application for declaration of eligible offsets project........................ 38

23.......... Form of application........................................................................... 38

24.......... Further information........................................................................... 39

25.......... Withdrawal of application................................................................. 39

26.......... Application may be split.................................................................... 40

27.......... Declaration of eligible offsets project................................................ 40

28.......... Declaration may be subject to condition about obtaining regulatory approvals         46

Division 3—Variation of declaration of eligible offsets project           47

29.......... Voluntary variation of declaration of eligible offsets project in relation to the project area or project areas              47

30.......... Voluntary variation of declaration of eligible offsets project in relation to the project proponent             49

31.......... Voluntary variation of conditional declaration of eligible offsets project—regulatory approvals obtained               51

Division 4—Revocation of declaration of eligible offsets project        53

Subdivision A—Voluntary revocation of declaration of eligible offsets project            53

32.......... Voluntary revocation of declaration of eligible offsets project—units issued           53

33.......... Voluntary revocation of declaration of eligible offsets project—no units issued      54

Subdivision B—Unilateral revocation of declaration of eligible offsets project            55

34.......... Unilateral revocation of declaration of eligible offsets project—regulatory approvals not obtained          55

35.......... Unilateral revocation of declaration of eligible offsets project—eligibility requirements not met etc.       56

36.......... Unilateral revocation of declaration of eligible offsets project—project proponent ceases to be a recognised offsets entity.......................................................................................................... 56

37.......... Unilateral revocation of declaration of eligible offsets project—person responsible for carrying out project ceases to be the project proponent......................................................................... 57

38.......... Unilateral revocation of declaration of eligible offsets project—false or misleading information             58

Division 5—Entries in title registers                                                                    59

39.......... Entries in title registers—general....................................................... 59

40.......... Entries in title registers—land subject to carbon maintenance obligation  59

Division 6—Additionality test                                                                                 60

41.......... Additionality test............................................................................... 60

Division 7—Net total number of Australian carbon credit units issued in relation to an eligible offsets project                                                                                                       62

42.......... Net total number of Australian carbon credit units issued in relation to an eligible offsets project           62

Division 8—Applicable carbon sequestration right                                     63

43.......... Applicable carbon sequestration right............................................... 63

Division 9—Eligible interest in an area of land                                             69

44.......... Eligible interest in an area of land—Torrens system land.................. 69

45.......... Eligible interest in an area of land—Crown land that is not Torrens system land     70

45A....... Eligible interest in an area of land—native title land.......................... 73

Division 10—Native title land                                                                                 74

46.......... Registered native title bodies corporate—deemed project proponent. 74

47.......... Administrator to notify Crown lands Minister of declaration of eligible offsets project           75

48.......... Designation of special native title account......................................... 76

49.......... Issue of Australian carbon credit units to special native title account 77

50.......... Units held in special native title account............................................ 78

51.......... Regulations about consulting common law holders etc..................... 78

Division 11—Freehold land rights land                                                             79

52.......... Administrator to notify Crown lands Minister of declaration of eligible offsets project           79

Division 12—Types of projects                                                                              80

53.......... Emissions avoidance offsets projects................................................ 80

54.......... Sequestration offsets projects............................................................ 80

55.......... Kyoto offsets projects and non-Kyoto offsets projects etc................ 81

56.......... Excluded offsets projects.................................................................. 82

Division 13—Restructure of eligible offsets projects                                 84

57.......... Restructure of eligible offsets projects.............................................. 84

58.......... Restructure of an eligible offsets project that is subject to the voluntary automatic unit cancellation regime             86

Part 4—Recognised offsets entities                                                                             87

59.......... Simplified outline.............................................................................. 87

60.......... Application for recognition as an offsets entity................................. 87

61.......... Form of application........................................................................... 87

62.......... Further information........................................................................... 87

63.......... Withdrawal of application................................................................. 88

64.......... Recognition as an offsets entity......................................................... 88

65.......... Cancellation of recognition................................................................ 91

66.......... Surrender of recognition................................................................... 94

67.......... Recognition is not transferable.......................................................... 94

Part 5—Crediting periods                                                                                                95

Division 1—Introduction                                                                                           95

68.......... Simplified outline.............................................................................. 95

Division 2—First crediting period                                                                        96

69.......... First crediting period......................................................................... 96

Division 3—Subsequent crediting period                                                          97

70.......... Application for subsequent crediting period...................................... 97

71.......... Form of application........................................................................... 98

72.......... Further information........................................................................... 98

73.......... Withdrawal of application................................................................. 98

74.......... Determination of subsequent crediting period................................... 99

Part 6—Reporting and notification requirements                                          101

Division 1—Introduction                                                                                         101

75.......... Simplified outline............................................................................ 101

Division 2—Reporting requirements                                                                102

76.......... Offsets reports................................................................................ 102

77.......... Declaration that offsets report requirement does not apply.............. 104

Division 3—Notification requirements                                                             106

Subdivision A—Project proponents                                                                    106

78.......... Notification requirement—ceasing to be the project proponent for an eligible offsets project otherwise than because of death................................................................................................ 106

79.......... Notification requirement—death of the project proponent for an eligible offsets project          107

80.......... Notification requirement—methodology determinations................. 107

81.......... Notification requirement—natural disturbances.............................. 108

82.......... Notification requirement—reversal of sequestration due to conduct of another person            109

83.......... Notification requirement—project becomes inconsistent with a regional natural resource management plan           111

Subdivision B—Recognised offsets entities                                                      112

84.......... Notification requirement—recognised offsets entities..................... 112

Subdivision C—General                                                                                        113

85.......... Regulations may impose notification requirements......................... 113

Part 7—Requirements to relinquish Australian carbon credit units   115

Division 1—Introduction                                                                                         115

86.......... Simplified outline............................................................................ 115

87.......... Maximum potential relinquishment period...................................... 115

Division 2—General relinquishment requirements                                   117

88.......... Requirement to relinquish—false or misleading information.......... 117

Division 3—Relinquishment requirements for sequestration offsets projects    119

89.......... Requirement to relinquish—revocation of declaration of eligible offsets project      119

90.......... Requirement to relinquish—reversal of sequestration other than due to natural disturbance or conduct etc.            120

91.......... Requirement to relinquish—reversal of sequestration due to natural disturbance or conduct and no mitigation happens........................................................................................................ 122

Division 4—Transition of offsets projects from prescribed non-CFI offsets schemes   124

92.......... Request for determination............................................................... 124

93.......... Form of request............................................................................... 124

94.......... Further information......................................................................... 124

95.......... Determination.................................................................................. 125

Part 8—Carbon maintenance obligation                                                              127

Division 1—Introduction                                                                                         127

96.......... Simplified outline............................................................................ 127

Division 2—Carbon maintenance obligation                                                128

97.......... Carbon maintenance obligation....................................................... 128

98.......... Variation or revocation of declaration of carbon maintenance obligation  132

99.......... Revocation of declaration of carbon maintenance obligation—voluntary relinquishment of Australian carbon credit units........................................................................................................ 134

Division 3—Injunctions                                                                                            136

100........ Injunctions...................................................................................... 136

101........ Interim injunctions.......................................................................... 136

102........ Discharge etc. of injunctions........................................................... 137

103........ Certain limits on granting injunctions not to apply.......................... 137

104........ Other powers of the Federal Court unaffected................................ 137

Part 9—Methodology determinations                                                                     138

Division 1—Introduction                                                                                         138

105........ Simplified outline............................................................................ 138

Division 2—Methodology determinations                                                      139

Subdivision A—Making of methodology determinations                             139

106........ Methodology determinations........................................................... 139

107........ Baseline........................................................................................... 142

108........ Application for endorsement of proposal for methodology determination                142

109........ Form of application......................................................................... 142

110........ Further information......................................................................... 143

111........ Withdrawal of application............................................................... 143

112........ Endorsement of proposal for methodology determination............... 144

113........ Advice about endorsement of proposal........................................... 147

Subdivision B—Variation of methodology determinations                         147

114........ Variation of methodology determinations....................................... 147

115........ When variation takes effect............................................................. 150

116........ Application for endorsement of proposal for the variation of a methodology determination    150

117........ Form of application......................................................................... 150

118........ Further information......................................................................... 151

119........ Withdrawal of application............................................................... 151

120........ Endorsement of proposal for variation of methodology determination 151

121........ Advice about endorsement of proposal........................................... 155

Subdivision C—Duration of methodology determinations                          155

122........ Duration of methodology determinations........................................ 155

Subdivision D—Revocation of methodology determinations                      156

123........ Revocation of methodology determinations.................................... 156

Subdivision E—Applicable methodology determination                              157

124........ Applicable methodology determination for a reporting period........ 157

125........ Original methodology determination continues to apply after expiry 157

126........ Original methodology determination continues to apply after variation 158

127........ Original methodology determination continues to apply after revocation 158

128........ Request to approve application of methodology determination to a project with effect from the start of a reporting period........................................................................................................ 159

129........ Further information......................................................................... 159

130........ Administrator may approve application of methodology determination to a project with effect from the start of a reporting period.............................................................................................. 160

Subdivision F—Transitional                                                                                161

131........ Transitional—pre-commencement application for endorsement of proposal            161

132........ Transitional—pre-commencement endorsement of proposal........... 161

Division 3—Offsets integrity standards                                                           163

133........ Offsets integrity standards.............................................................. 163

Part 10—Multiple project proponents                                                                   166

Division 1—Introduction                                                                                         166

134........ Simplified outline............................................................................ 166

Division 2—References to project proponents                                            167

135........ References to project proponents.................................................... 167

Division 3—Nominee of multiple project proponents                              169

136........ Nomination of nominee by multiple project proponents.................. 169

137........ Service of documents on nominee................................................... 170

138........ Eligible voluntary action taken by nominee..................................... 170

139........ Unilateral revocation of declaration of eligible offsets project—failure of multiple project proponents to nominate a nominee........................................................................................... 172

140........ Designation of nominee account..................................................... 172

141........ Issue of Australian carbon credit units to nominee account............. 173

142........ Units held in nominee account........................................................ 175

143........ Instructions in relation to nominee account..................................... 175

144........ Updating nominee account details on change of nominee............... 176

Division 4—Obligations of multiple project proponents                        177

145........ Obligations of multiple project proponents..................................... 177

Part 11—Australian carbon credit units                                                               178

Division 1—Introduction                                                                                         178

146........ Simplified outline............................................................................ 178

Division 2—Issue of Australian carbon credit units                                 179

147........ Issue of Australian carbon credit units............................................ 179

148........ How Australian carbon credit units are to be issued....................... 179

149........ Circumstances in which Australian carbon credit units may be issued 179

Division 3—Property in, and transfer of, Australian carbon credit units             180

150........ An Australian carbon credit unit is personal property..................... 180

151........ Transfer of Australian carbon credit units....................................... 180

152........ Transmission of Australian carbon credit units by assignment....... 180

153........ Transmission of Australian carbon credit units by operation of law etc.  181

154........ Outgoing international transfers of Australian carbon credit units.. 183

155........ Restrictions on outgoing international transfers of Kyoto Australian carbon credit units         184

156........ Transfer of Australian carbon credit units to another Registry account held by the transferor  184

157........ Exchange of Kyoto Australian carbon credit units for Kyoto units. 185

158........ Equitable interests in relation to an Australian carbon credit unit.... 186

Part 12—Publication of information                                                                       188

Division 1—Introduction                                                                                         188

159........ Simplified outline............................................................................ 188

Division 2—Information about units                                                                 189

160........ Information about issue of Australian carbon credit units............... 189

161........ Quarterly reports about issue of Australian carbon credit units....... 189

162........ Publication of concise description of the characteristics of Australian carbon credit units        189

Division 3—Information about voluntary cancellation of units         190

163........ Information about number of voluntarily cancelled Australian carbon credit units   190

Division 4—Information about relinquishment requirements            191

164........ Information about relinquishment requirements.............................. 191

165........ Information about unpaid administrative penalties.......................... 192

166........ Information about number of relinquished units............................. 192

Division 5—Register of Offsets Projects                                                         194

167........ Register of Offsets Projects............................................................ 194

168........ Entries in the Register..................................................................... 194

169........ Requests for information about project area not to be set out in the Register            196

Part 13—Fraudulent conduct                                                                                      198

170........ Simplified outline............................................................................ 198

171........ Units issued as a result of fraudulent conduct—court may order relinquishment     198

Part 14—Voluntary cancellation of Australian carbon credit units    201

172........ Simplified outline............................................................................ 201

173........ Voluntary cancellation of Australian carbon credit units................. 201

Part 15—Relinquishment of Australian carbon credit units                    203

Division 1—Introduction                                                                                         203

174........ Simplified outline............................................................................ 203

Division 2—How Australian carbon credit units are relinquished   204

175........ How Australian carbon credit units are relinquished....................... 204

176........ Deemed relinquishment................................................................... 206

177........ Transfer of certain units instead of relinquishment of Kyoto Australian carbon credit units    207

178........ Transfer of certain units instead of relinquishment of non-Kyoto Australian carbon credit units             209

Division 3—Compliance with relinquishment requirements                211

179........ Compliance with relinquishment requirements................................ 211

180........ Late payment penalty....................................................................... 213

181........ Recovery of penalties...................................................................... 214

182........ Set-off............................................................................................. 214

183........ Refund of overpayments................................................................. 214

Part 16—Information-gathering powers                                                              216

184........ Simplified outline............................................................................ 216

185........ Administrator may obtain information or documents...................... 216

186........ Copying documents—compensation............................................... 217

187........ Copies of documents....................................................................... 217

188........ Administrator may retain documents............................................... 218

189........ Self-incrimination............................................................................ 218

Part 17—Record-keeping and project monitoring requirements          220

Division 1—Introduction                                                                                         220

190........ Simplified outline............................................................................ 220

Division 2—Record-keeping requirements                                                    221

191........ Record-keeping requirements—general.......................................... 221

192........ Record-keeping requirements—preparation of offsets report.......... 222

193........ Record-keeping requirements—methodology determinations......... 223

Division 3—Project monitoring requirements                                             224

194........ Project monitoring requirements—methodology determinations..... 224

Part 18—Monitoring powers                                                                                       225

Division 1—Simplified outline                                                                               225

195........ Simplified outline............................................................................ 225

Division 2—Appointment of inspectors and issue of identity cards 226

196........ Appointment of inspectors.............................................................. 226

197........ Identity cards................................................................................... 226

Division 3—Powers of inspectors                                                                        228

Subdivision A—Monitoring powers                                                                   228

198........ Inspector may enter premises by consent or under a warrant.......... 228

199........ Monitoring powers of inspectors.................................................... 228

200........ Persons assisting inspectors............................................................ 231

Subdivision B—Powers of inspectors to ask questions and seek production of documents          231

201........ Inspector may ask questions and seek production of documents.... 231

202........ Self-incrimination............................................................................ 232

Division 4—Obligations and incidental powers of inspectors              233

203........ Consent........................................................................................... 233

204........ Announcement before entry under warrant..................................... 233

205........ Inspector to be in possession of warrant......................................... 233

206........ Details of warrant etc. to be given to occupier................................. 234

207........ Expert assistance to operate electronic equipment........................... 234

208........ Compensation for damage to electronic equipment......................... 235

Division 5—Occupier’s rights and responsibilities                                    237

209........ Occupier entitled to observe execution of warrant........................... 237

210........ Occupier to provide inspector with facilities and assistance............ 237

Division 6—Monitoring warrants                                                                       238

211........ Monitoring warrants....................................................................... 238

Division 7—Powers of magistrates                                                                    240

212........ Powers of magistrates..................................................................... 240

Part 19—Audits                                                                                                                    241

Division 1—Introduction                                                                                         241

213........ Simplified outline............................................................................ 241

Division 2—Audits                                                                                                       242

214........ Compliance audits........................................................................... 242

215........ Other audits..................................................................................... 244

Part 20—Liability of executive officers of bodies corporate                    246

216........ Simplified outline............................................................................ 246

217........ Civil penalties for executive officers of bodies corporate................ 246

218........ Reasonable steps to prevent contravention...................................... 247

Part 21—Civil penalty orders                                                                                      248

219........ Simplified outline............................................................................ 248

220........ References to Court......................................................................... 248

221........ Civil penalty orders......................................................................... 248

222........ Who may apply for a civil penalty order......................................... 249

223........ Two or more proceedings may be heard together............................ 249

224........ Time limit for application for an order............................................. 250

225........ Civil evidence and procedure rules for civil penalty orders............. 250

226........ Civil proceedings after criminal proceedings................................... 250

227........ Criminal proceedings during civil proceedings............................... 250

228........ Criminal proceedings after civil proceedings................................... 250

229........ Evidence given in proceedings for a civil penalty order not admissible in criminal proceedings              251

230........ Mistake of fact................................................................................ 251

231........ State of mind................................................................................... 252

232........ Continuing contraventions.............................................................. 253

Part 22—Offences relating to administrative penalties                                255

233........ Simplified outline............................................................................ 255

234........ Scheme to avoid existing liability to pay administrative penalty...... 255

235........ Scheme to avoid future liability to pay administrative penalty......... 257

Part 23—Enforceable undertakings                                                                        260

236........ Simplified outline............................................................................ 260

237........ Acceptance of undertakings............................................................ 260

238........ Enforcement of undertakings.......................................................... 261

Part 24—Review of decisions                                                                                       262

Division 1—Introduction                                                                                         262

239........ Simplified outline............................................................................ 262

Division 2—Decisions of the Administrator                                                  263

240........ Reviewable decisions...................................................................... 263

241........ Applications for reconsideration of decisions made by delegates of the Administrator            264

242........ Reconsideration by the Administrator............................................. 265

243........ Deadline for reconsideration........................................................... 266

244........ Review by the Administrative Appeals Tribunal............................. 266

245........ Stay of proceedings for the recovery of an administrative penalty.. 266

Division 3—Decisions of the Domestic Offsets Integrity Committee 268

245A..... Review by the Administrative Appeals Tribunal............................. 268

Part 25—Carbon Credits Administrator                                                             269

246........ Carbon Credits Administrator......................................................... 269

247........ Functions of the Administrator....................................................... 269

248........ Acting Administrator...................................................................... 269

249........ Delegation by the Administrator..................................................... 270

250........ Administrator to be assisted by APS employees in the Department 270

251........ Other persons assisting the Administrator...................................... 271

252........ Consultants..................................................................................... 271

253........ Minister may give directions to the Administrator.......................... 271

Part 26—Domestic Offsets Integrity Committee                                              272

Division 1—Establishment and functions of the Domestic Offsets Integrity Committee              272

254........ Establishment of the Domestic Offsets Integrity Committee........... 272

255........ Functions of the Domestic Offsets Integrity Committee................. 272

Division 2—Membership of the Domestic Offsets Integrity Committee               273

256........ Membership of the Domestic Offsets Integrity Committee............. 273

257........ Appointment of Domestic Offsets Integrity Committee members... 273

258........ Period for appointment for Domestic Offsets Integrity Committee members           274

259........ Acting Domestic Offsets Integrity Committee members................. 274

260........ Procedures...................................................................................... 276

261........ Disclosure of interests to the Minister............................................. 277

262........ Disclosure of interests to Domestic Offsets Integrity Committee.... 277

263........ Outside employment....................................................................... 278

264........ Remuneration and allowances......................................................... 278

265........ Leave of absence............................................................................. 278

266........ Resignation..................................................................................... 279

267........ Termination of appointment............................................................ 279

268........ Other terms and conditions............................................................. 280

269........ Assistance to Domestic Offsets Integrity Committee...................... 280

Part 27—Secrecy                                                                                                                 281

270........ Secrecy............................................................................................ 281

271........ Disclosure or use for the purposes of this Act or a legislative instrument under this Act         281

272........ Disclosure to the Minister............................................................... 282

273........ Disclosure to the Secretary etc........................................................ 282

274........ Disclosure or use for purposes of development of methodology determinations etc.               283

275........ Disclosure to a Royal Commission................................................. 284

276........ Disclosure to certain persons and bodies........................................ 284

277........ Disclosure to certain financial bodies.............................................. 286

278........ Disclosure with consent.................................................................. 288

279........ Disclosure to reduce threat to life or health..................................... 289

280........ Disclosure of publicly available information................................... 289

281........ Disclosure of summaries or statistics.............................................. 289

282........ Disclosure for purposes of law enforcement—protected Administrator information               290

283........ Disclosure for purposes of law enforcement—protected DOIC information           292

284........ Disclosure for purposes of review of Act....................................... 294

285........ Disclosure for purposes of review of compliance with Australia’s international obligations   294

Part 28—Miscellaneous                                                                                                   295

286........ Miscellaneous functions of the Administrator................................. 295

287........ Computerised decision-making....................................................... 295

288........ Administrator’s power to require further information..................... 296

289........ Domestic Offsets Integrity Committee’s power to require further information        297

290........ Actions may be taken by an agent of a project proponent............... 297

291........ Delegation by the Minister.............................................................. 298

292........ Delegation by a State Minister or a Territory Minister.................... 298

293........ Delegation by the Secretary............................................................. 298

294........ Concurrent operation of State and Territory laws............................ 299

295........ Law relating to legal professional privilege not affected.................. 299

296........ Arrangements with States and Territories....................................... 299

297........ Liability for damages....................................................................... 301

298........ Executive power of the Commonwealth.......................................... 301

299........ Notional payments by the Commonwealth...................................... 302

300........ Compensation for acquisition of property....................................... 302

301........ Native title rights not affected.......................................................... 302

302........ Racial Discrimination Act not affected............................................ 302

303........ Additional effect of this Act and the regulations—introduced animal emissions avoidance projects        303

304........ Prescribing matters by reference to other instruments..................... 303

305........ Administrative decisions under the regulations............................... 303

306........ Reviews of operation of this Act etc............................................... 304

307........ Regulations..................................................................................... 304

 



A Bill for an Act about projects to remove carbon dioxide from the atmosphere and projects to avoid emissions of greenhouse gases, and for other purposes

The Parliament of Australia enacts: