2010-2011

 

The Parliament of the

Commonwealth of Australia

 

HOUSE OF REPRESENTATIVES

 

 

 

 

Presented and read a first time

 

 

 

 

 

 

 

 

 

Carbon Credits (Carbon Farming Initiative) Bill 2011

 

No.      , 2011

 

(Climate Change and Energy Efficiency)

 

 

 

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.       55

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

Division 10—Native title land                                                                                 73

46.......... Registered native title bodies corporate—deemed project proponent. 73

47.......... Administrator to notify Crown lands Minister of declaration of eligible offsets project           74

48.......... Designation of special native title account......................................... 75

49.......... Issue of Australian carbon credit units to special native title account 76

50.......... Units held in special native title account............................................ 77

51.......... Regulations about consulting common law holders etc..................... 77

Division 11—Freehold land rights land                                                             78

52.......... Administrator to notify Crown lands Minister of declaration of eligible offsets project           78

Division 12—Types of projects                                                                              79

53.......... Emissions avoidance offsets projects................................................ 79

54.......... Sequestration offsets projects............................................................ 79

55.......... Kyoto offsets projects and non-Kyoto offsets projects etc................ 80

56.......... Excluded offsets projects.................................................................. 81

Division 13—Restructure of eligible offsets projects                                 83

57.......... Restructure of eligible offsets projects.............................................. 83

58.......... Restructure of an eligible offsets project that is subject to the voluntary automatic unit cancellation regime             85

Part 4—Recognised offsets entities                                                                             86

59.......... Simplified outline.............................................................................. 86

60.......... Application for recognition as an offsets entity................................. 86

61.......... Form of application........................................................................... 86

62.......... Further information........................................................................... 86

63.......... Withdrawal of application................................................................. 87

64.......... Recognition as an offsets entity......................................................... 87

65.......... Cancellation of recognition................................................................ 90

66.......... Surrender of recognition................................................................... 93

67.......... Recognition is not transferable.......................................................... 93

Part 5—Crediting periods                                                                                                94

Division 1—Introduction                                                                                           94

68.......... Simplified outline.............................................................................. 94

Division 2—First crediting period                                                                        95

69.......... First crediting period......................................................................... 95

Division 3—Subsequent crediting period                                                          96

70.......... Application for subsequent crediting period...................................... 96

71.......... Form of application........................................................................... 97

72.......... Further information........................................................................... 97

73.......... Withdrawal of application................................................................. 97

74.......... Determination of subsequent crediting period................................... 98

Part 6—Reporting and notification requirements                                          100

Division 1—Introduction                                                                                         100

75.......... Simplified outline............................................................................ 100

Division 2—Reporting requirements                                                                101

76.......... Offsets reports................................................................................ 101

77.......... Declaration that offsets report requirement does not apply.............. 103

Division 3—Notification requirements                                                             105

Subdivision A—Project proponents                                                                    105

78.......... Notification requirement—ceasing to be the project proponent for an eligible offsets project otherwise than because of death................................................................................................ 105

79.......... Notification requirement—death of the project proponent for an eligible offsets project          106

80.......... Notification requirement—methodology determinations................. 106

81.......... Notification requirement—natural disturbances.............................. 107

82.......... Notification requirement—reversal of sequestration due to conduct of another person            108

83.......... Notification requirement—project becomes inconsistent with a regional natural resource management plan           110

Subdivision B—Recognised offsets entities                                                      111

84.......... Notification requirement—recognised offsets entities..................... 111

Subdivision C—General                                                                                        112

85.......... Regulations may impose notification requirements......................... 112

Part 7—Requirements to relinquish Australian carbon credit units   114

Division 1—Introduction                                                                                         114

86.......... Simplified outline............................................................................ 114

87.......... Maximum potential relinquishment period...................................... 114

Division 2—General relinquishment requirements                                   116

88.......... Requirement to relinquish—false or misleading information.......... 116

Division 3—Relinquishment requirements for sequestration offsets projects    118

89.......... Requirement to relinquish—revocation of declaration of eligible offsets project      118

90.......... Requirement to relinquish—reversal of sequestration other than due to natural disturbance or conduct etc.            119

91.......... Requirement to relinquish—reversal of sequestration due to natural disturbance or conduct and no mitigation happens........................................................................................................ 121

Division 4—Transition of offsets projects from prescribed non-CFI offsets schemes   123

92.......... Request for determination............................................................... 123

93.......... Form of request............................................................................... 123

94.......... Further information......................................................................... 123

95.......... Determination.................................................................................. 124

Part 8—Carbon maintenance obligation                                                              126

Division 1—Introduction                                                                                         126

96.......... Simplified outline............................................................................ 126

Division 2—Carbon maintenance obligation                                                127

97.......... Carbon maintenance obligation....................................................... 127

98.......... Variation or revocation of declaration of carbon maintenance obligation  131

99.......... Revocation of declaration of carbon maintenance obligation—voluntary relinquishment of Australian carbon credit units........................................................................................................ 133

Division 3—Injunctions                                                                                            135

100........ Injunctions...................................................................................... 135

101........ Interim injunctions.......................................................................... 135

102........ Discharge etc. of injunctions........................................................... 136

103........ Certain limits on granting injunctions not to apply.......................... 136

104........ Other powers of the Federal Court unaffected................................ 136

Part 9—Methodology determinations                                                                     137

Division 1—Introduction                                                                                         137

105........ Simplified outline............................................................................ 137

Division 2—Methodology determinations                                                      138

Subdivision A—Making of methodology determinations                             138

106........ Methodology determinations........................................................... 138

107........ Baseline........................................................................................... 141

108........ Application for endorsement of proposal for methodology determination                141

109........ Form of application......................................................................... 141

110........ Further information......................................................................... 142

111........ Withdrawal of application............................................................... 142

112........ Endorsement of proposal for methodology determination............... 143

113........ Advice about endorsement of proposal........................................... 146

Subdivision B—Variation of methodology determinations                         146

114........ Variation of methodology determinations....................................... 146

115........ When variation takes effect............................................................. 148

116........ Application for endorsement of proposal for the variation of a methodology determination    149

117........ Form of application......................................................................... 149

118........ Further information......................................................................... 149

119........ Withdrawal of application............................................................... 150

120........ Endorsement of proposal for variation of methodology determination 150

121........ Advice about endorsement of proposal........................................... 154

Subdivision C—Duration of methodology determinations                          154

122........ Duration of methodology determinations........................................ 154

Subdivision D—Revocation of methodology determinations                      155

123........ Revocation of methodology determinations.................................... 155

Subdivision E—Applicable methodology determination                              156

124........ Applicable methodology determination for a reporting period........ 156

125........ Original methodology determination continues to apply after expiry 156

126........ Original methodology determination continues to apply after variation 157

127........ Original methodology determination continues to apply after revocation 157

128........ Request to approve application of methodology determination to a project with effect from the start of a reporting period........................................................................................................ 158

129........ Further information......................................................................... 158

130........ Administrator may approve application of methodology determination to a project with effect from the start of a reporting period.............................................................................................. 159

Subdivision F—Transitional                                                                                160

131........ Transitional—pre-commencement application for endorsement of proposal            160

132........ Transitional—pre-commencement endorsement of proposal........... 160

Division 3—Offsets integrity standards                                                           162

133........ Offsets integrity standards.............................................................. 162

Part 10—Multiple project proponents                                                                   165

Division 1—Introduction                                                                                         165

134........ Simplified outline............................................................................ 165

Division 2—References to project proponents                                            166

135........ References to project proponents.................................................... 166

Division 3—Nominee of multiple project proponents                              168

136........ Nomination of nominee by multiple project proponents.................. 168

137........ Service of documents on nominee................................................... 169

138........ Eligible voluntary action taken by nominee..................................... 169

139........ Unilateral revocation of declaration of eligible offsets project—failure of multiple project proponents to nominate a nominee........................................................................................... 171

140........ Designation of nominee account..................................................... 171

141........ Issue of Australian carbon credit units to nominee account............. 172

142........ Units held in nominee account........................................................ 174

143........ Instructions in relation to nominee account..................................... 174

144........ Updating nominee account details on change of nominee............... 175

Division 4—Obligations of multiple project proponents                        176

145........ Obligations of multiple project proponents..................................... 176

Part 11—Australian carbon credit units                                                               177

Division 1—Introduction                                                                                         177

146........ Simplified outline............................................................................ 177

Division 2—Issue of Australian carbon credit units                                 178

147........ Issue of Australian carbon credit units............................................ 178

148........ How Australian carbon credit units are to be issued....................... 178

149........ Circumstances in which Australian carbon credit units may be issued 178

Division 3—Property in, and transfer of, Australian carbon credit units             179

150........ An Australian carbon credit unit is personal property..................... 179

151........ Transfer of Australian carbon credit units....................................... 179

152........ Transmission of Australian carbon credit units by assignment....... 179

153........ Transmission of Australian carbon credit units by operation of law etc.  180

154........ Outgoing international transfers of Australian carbon credit units.. 182

155........ Restrictions on outgoing international transfers of Kyoto Australian carbon credit units         183

156........ Transfer of Australian carbon credit units to another Registry account held by the transferor  183

157........ Exchange of Kyoto Australian carbon credit units for Kyoto units. 184

158........ Equitable interests in relation to an Australian carbon credit unit.... 185

Part 12—Publication of information                                                                       187

Division 1—Introduction                                                                                         187

159........ Simplified outline............................................................................ 187

Division 2—Information about units                                                                 188

160........ Information about issue of Australian carbon credit units............... 188

161........ Quarterly reports about issue of Australian carbon credit units....... 188

162........ Publication of concise description of the characteristics of Australian carbon credit units        188

Division 3—Information about voluntary cancellation of units         189

163........ Information about number of voluntarily cancelled Australian carbon credit units   189

Division 4—Information about relinquishment requirements            190

164........ Information about relinquishment requirements.............................. 190

165........ Information about unpaid administrative penalties.......................... 191

166........ Information about number of relinquished units............................. 191

Division 5—Register of Offsets Projects                                                         193

167........ Register of Offsets Projects............................................................ 193

168........ Entries in the Register..................................................................... 193

169........ Requests for information about project area not to be set out in the Register            195

Part 13—Fraudulent conduct                                                                                      197

170........ Simplified outline............................................................................ 197

171........ Units issued as a result of fraudulent conduct—court may order relinquishment     197

Part 14—Voluntary cancellation of Australian carbon credit units    200

172........ Simplified outline............................................................................ 200

173........ Voluntary cancellation of Australian carbon credit units................. 200

Part 15—Relinquishment of Australian carbon credit units                    202

Division 1—Introduction                                                                                         202

174........ Simplified outline............................................................................ 202

Division 2—How Australian carbon credit units are relinquished   203

175........ How Australian carbon credit units are relinquished....................... 203

176........ Deemed relinquishment................................................................... 205

177........ Transfer of certain units instead of relinquishment of Kyoto Australian carbon credit units    206

178........ Transfer of certain units instead of relinquishment of non-Kyoto Australian carbon credit units             208

Division 3—Compliance with relinquishment requirements                210

179........ Compliance with relinquishment requirements................................ 210

180........ Late payment penalty....................................................................... 212

181........ Recovery of penalties...................................................................... 213

182........ Set-off............................................................................................. 213

183........ Refund of overpayments................................................................. 213

Part 16—Information-gathering powers                                                              215

184........ Simplified outline............................................................................ 215

185........ Administrator may obtain information or documents...................... 215

186........ Copying documents—compensation............................................... 216

187........ Copies of documents....................................................................... 216

188........ Administrator may retain documents............................................... 217

189........ Self-incrimination............................................................................ 217

Part 17—Record-keeping and project monitoring requirements          219

Division 1—Introduction                                                                                         219

190........ Simplified outline............................................................................ 219

Division 2—Record-keeping requirements                                                    220

191........ Record-keeping requirements—general.......................................... 220

192........ Record-keeping requirements—preparation of offsets report.......... 221

193........ Record-keeping requirements—methodology determinations......... 222

Division 3—Project monitoring requirements                                             223

194........ Project monitoring requirements—methodology determinations..... 223

Part 18—Monitoring powers                                                                                       224

Division 1—Simplified outline                                                                               224

195........ Simplified outline............................................................................ 224

Division 2—Appointment of inspectors and issue of identity cards 225

196........ Appointment of inspectors.............................................................. 225

197........ Identity cards................................................................................... 225

Division 3—Powers of inspectors                                                                        227

Subdivision A—Monitoring powers                                                                   227

198........ Inspector may enter premises by consent or under a warrant.......... 227

199........ Monitoring powers of inspectors.................................................... 227

200........ Persons assisting inspectors............................................................ 230

Subdivision B—Powers of inspectors to ask questions and seek production of documents          230

201........ Inspector may ask questions and seek production of documents.... 230

202........ Self-incrimination............................................................................ 231

Division 4—Obligations and incidental powers of inspectors              232

203........ Consent........................................................................................... 232

204........ Announcement before entry under warrant..................................... 232

205........ Inspector to be in possession of warrant......................................... 232

206........ Details of warrant etc. to be given to occupier................................. 233

207........ Expert assistance to operate electronic equipment........................... 233

208........ Compensation for damage to electronic equipment......................... 234

Division 5—Occupier’s rights and responsibilities                                    236

209........ Occupier entitled to observe execution of warrant........................... 236

210........ Occupier to provide inspector with facilities and assistance............ 236

Division 6—Monitoring warrants                                                                       237

211........ Monitoring warrants....................................................................... 237

Division 7—Powers of magistrates                                                                    239

212........ Powers of magistrates..................................................................... 239

Part 19—Audits                                                                                                                    240

Division 1—Introduction                                                                                         240

213........ Simplified outline............................................................................ 240

Division 2—Audits                                                                                                       241

214........ Compliance audits........................................................................... 241

215........ Other audits..................................................................................... 243

Part 20—Liability of executive officers of bodies corporate                    245

216........ Simplified outline............................................................................ 245

217........ Civil penalties for executive officers of bodies corporate................ 245

218........ Reasonable steps to prevent contravention...................................... 246

Part 21—Civil penalty orders                                                                                      247

219........ Simplified outline............................................................................ 247

220........ References to Court......................................................................... 247

221........ Civil penalty orders......................................................................... 247

222........ Who may apply for a civil penalty order......................................... 248

223........ Two or more proceedings may be heard together............................ 248

224........ Time limit for application for an order............................................. 249

225........ Civil evidence and procedure rules for civil penalty orders............. 249

226........ Civil proceedings after criminal proceedings................................... 249

227........ Criminal proceedings during civil proceedings............................... 249

228........ Criminal proceedings after civil proceedings................................... 249

229........ Evidence given in proceedings for a civil penalty order not admissible in criminal proceedings              250

230........ Mistake of fact................................................................................ 250

231........ State of mind................................................................................... 251

232........ Continuing contraventions.............................................................. 252

Part 22—Offences relating to administrative penalties                                254

233........ Simplified outline............................................................................ 254

234........ Scheme to avoid existing liability to pay administrative penalty...... 254

235........ Scheme to avoid future liability to pay administrative penalty......... 256

Part 23—Enforceable undertakings                                                                        259

236........ Simplified outline............................................................................ 259

237........ Acceptance of undertakings............................................................ 259

238........ Enforcement of undertakings.......................................................... 260

Part 24—Review of decisions                                                                                       261

Division 1—Introduction                                                                                         261

239........ Simplified outline............................................................................ 261

Division 2—Decisions of the Administrator                                                  262

240........ Reviewable decisions...................................................................... 262

241........ Applications for reconsideration of decisions made by delegates of the Administrator            263

242........ Reconsideration by the Administrator............................................. 264

243........ Deadline for reconsideration........................................................... 265

244........ Review by the Administrative Appeals Tribunal............................. 265

245........ Stay of proceedings for the recovery of an administrative penalty.. 265

Division 3—Decisions of the Domestic Offsets Integrity Committee 267

245A..... Review by the Administrative Appeals Tribunal............................. 267

Part 25—Carbon Credits Administrator                                                             268

246........ Carbon Credits Administrator......................................................... 268

247........ Functions of the Administrator....................................................... 268

248........ Acting Administrator...................................................................... 268

249........ Delegation by the Administrator..................................................... 269

250........ Administrator to be assisted by APS employees in the Department 269

251........ Other persons assisting the Administrator...................................... 270

252........ Consultants..................................................................................... 270

253........ Minister may give directions to the Administrator.......................... 270

Part 26—Domestic Offsets Integrity Committee                                              271

Division 1—Establishment and functions of the Domestic Offsets Integrity Committee              271

254........ Establishment of the Domestic Offsets Integrity Committee........... 271

255........ Functions of the Domestic Offsets Integrity Committee................. 271

Division 2—Membership of the Domestic Offsets Integrity Committee               272

256........ Membership of the Domestic Offsets Integrity Committee............. 272

257........ Appointment of Domestic Offsets Integrity Committee members... 272

258........ Period for appointment for Domestic Offsets Integrity Committee members           273

259........ Acting Domestic Offsets Integrity Committee members................. 273

260........ Procedures...................................................................................... 275

261........ Disclosure of interests to the Minister............................................. 276

262........ Disclosure of interests to Domestic Offsets Integrity Committee.... 276

263........ Outside employment....................................................................... 277

264........ Remuneration and allowances......................................................... 277

265........ Leave of absence............................................................................. 277

266........ Resignation..................................................................................... 278

267........ Termination of appointment............................................................ 278

268........ Other terms and conditions............................................................. 279

269........ Assistance to Domestic Offsets Integrity Committee...................... 279

Part 27—Secrecy                                                                                                                 280

270........ Secrecy............................................................................................ 280

271........ Disclosure or use for the purposes of this Act or a legislative instrument under this Act         280

272........ Disclosure to the Minister............................................................... 281

273........ Disclosure to the Secretary etc........................................................ 281

274........ Disclosure or use for purposes of development of methodology determinations etc.               282

275........ Disclosure to a Royal Commission................................................. 283

276........ Disclosure to certain persons and bodies........................................ 283

277........ Disclosure to certain financial bodies.............................................. 285

278........ Disclosure with consent.................................................................. 287

279........ Disclosure to reduce threat to life or health..................................... 288

280........ Disclosure of publicly available information................................... 288

281........ Disclosure of summaries or statistics.............................................. 288

282........ Disclosure for purposes of law enforcement—protected Administrator information               289

283........ Disclosure for purposes of law enforcement—protected DOIC information           291

284........ Disclosure for purposes of review of Act....................................... 293

285........ Disclosure for purposes of review of compliance with Australia’s international obligations   293

Part 28—Miscellaneous                                                                                                   294

286........ Miscellaneous functions of the Administrator................................. 294

287........ Computerised decision-making....................................................... 294

288........ Administrator’s power to require further information..................... 295

289........ Domestic Offsets Integrity Committee’s power to require further information        296

290........ Actions may be taken by an agent of a project proponent............... 296

291........ Delegation by the Minister.............................................................. 297

292........ Delegation by a State Minister or a Territory Minister.................... 297

293........ Delegation by the Secretary............................................................. 297

294........ Concurrent operation of State and Territory laws............................ 298

295........ Law relating to legal professional privilege not affected.................. 298

296........ Arrangements with States and Territories....................................... 298

297........ Liability for damages....................................................................... 300

298........ Executive power of the Commonwealth.......................................... 300

299........ Notional payments by the Commonwealth...................................... 301

300........ Compensation for acquisition of property....................................... 301

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

302........ Racial Discrimination Act not affected............................................ 301

303........ Additional effect of this Act and the regulations—introduced animal emissions avoidance projects        302

304........ Prescribing matters by reference to other instruments..................... 302

305........ Administrative decisions under the regulations............................... 302

306........ Reviews of operation of this Act etc............................................... 303

307........ Regulations..................................................................................... 303

 

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: