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National Greenhouse and Energy Reporting Amendment Bill 2009

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2008 - 2009

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

NATIONAL GREENHOUSE AND ENERGY REPORTING

AMENDMENT BILL 2009

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

(Circulated by authority of the Minister for Climate Change and Water,

Senator the Honourable Penny Wong)

 

 



NATIONAL GREENHOUSE AND ENERGY REPORTING

AMENDMENT BILL 2008

 

GENERAL OUTLINE

 

The National Greenhouse and Energy Reporting Amendment Bill 2009 (the Bill) makes minor amendments to the National Greenhouse and Energy Reporting Act 2007 (the Act) to better reflect the original policy intent of the Act, and to better facilitate its administration.

 

In particular, the Bill will:

·          Clarify the definitions of a number of terms relating to greenhouse and energy audits to be conducted under the Act;

·          Require results of greenhouse and energy audits to be included on the register established under section 16 of the Act;

·          Extend the secrecy requirements to also cover audit information;

·          Allow for decisions made by the Greenhouse and Energy Data Officer (GEDO) not to register an auditor under the Act to be reviewed by the Administrative Appeals Tribunal;

·          Give the GEDO authority to audit entities who report under section 20 of the Act;

·          Expand the scope of the legislative instrument to be determined under section 75 of the Act to include requirements for the preparation, conduct and reporting of audits and allow for these requirements to be determined by the Minister rather than the GEDO;

·          Require potential auditors under the Act to apply to the GEDO for registration and allow for detailed requirements on auditor registration to be provided in regulations and a legislative instrument determined by the GEDO;

·          Make a number of administrative amendments consequential to the substantive amendments outlined above; and

·          Repeal the requirement for the GEDO to publish corporate level energy production information.

FINANCIAL IMPACT STATEMENT

 

The Bill will have no financial impact.

 



NOTES ON INDIVIDUAL CLAUSES

Clause 1 - Short Title

1.       This clause is a formal provision specifying the title of the Bill.

Clause 2 - Commencement

2.       This clause sets out that the provisions of the Bill will commence on the 28 th day after the Bill receives Royal Assent.

Clause 3 - Schedule(s)

3.       This is a formal clause providing that each Act specified in the Schedule is amended or repealed as set out in the applicable items in the Schedule, and other items in the Schedule have effect according to its terms.

SCHEDULE 1 - AMENDMENTS

Part 1 - Amendments relating to audits

National Greenhouse and Energy Reporting Act 2007

Item 1         - Section 7

4.       This item provides a definition of ‘audit information’ to allow for protection of information collected during audits by the secrecy provisions outlined in section 23 of the Act.

Item 2         - Section 7

5.       This item defines ‘audit team leader’ as a person appointed to conduct a greenhouse and energy audit under sections 73 to 74A of the Act. The audit team leader will lead the audit team and has responsibility for the overall conduct and sign-off of greenhouse and energy audits conducted under the Act.

Item 3         - Section 7

6.       This item defines ‘audit team member’ as a person who assists the ‘audit team leader’ with audits under sections 73 to 74A of the Act. The use of audit teams is designed to enable cross-disciplinary expertise to be utilised in the audit.

Item 4         - Section 7 (definition of external auditor )

7.       This item repeals the definition of ‘external auditor’ to be replaced by the new terms ‘audit team leader’ and ‘registered greenhouse and energy auditor’. This is to address stakeholder confusion about the use of the term ‘external auditor’. Requirements for auditors, including independence, qualifications and expertise, will be developed under the new section 75A (see Item 39).

Item 5         - Section 7

8.       This item provides a definition for a ‘greenhouse and energy audit’ as a replacement for the term ‘external audit’. Many stakeholders provided feedback that the name ‘external audit’ was confusing. The new term directly links the name of the audit to the subject matter - greenhouse and energy information. The term audit is used as a generic indicator of the type of activity to be undertaken and does not have the same meaning as that applied under the Corporations Act 2001 .

9.       The details of the types of audits to be conducted under the Act will be contained in the legislative instrument determined under section 75 of the Act. This will most likely include requirements for both assurance engagements and other audit / verification procedures.

Item 6         - Section 7

10.   This item provides a definition for ‘registered greenhouse and energy auditor’ in line with later amendments establishing a registration requirement for individuals to operate as auditors under the Act.  See item 39 for more detail on registration of auditors.

Item 7         - At the end of paragraph 16(4)(b)

11.   This item allows for regulations to be made for the results of greenhouse and energy audits to be included on the (corporation) register established by section 16 of the Act. This will allow for the GEDO to publish the ‘results’ of audits. The GEDO currently has no power to disclose information on the outcomes of audits to the public.

12.   Stakeholders have indicated a significant interest in audit outcomes to assist them understand the reliability of a corporation’s published greenhouse and energy information. Any decision by the GEDO to publish such data would have to take a variety of issues into account including the possibility of publishing inaccurate information and the potential impacts on audited companies.

Item 8         - Paragraph 23(1)(a)

13.   This item will ensure that the secrecy provisions apply to audit information by establishing an offence for release of ‘audit information’ other than for the purposes of the Act or other Commonwealth, State or Territory laws.

Item 9         - Paragraph 23(2)(d)

14.   This item replaces the term ‘external auditor’ with ‘audit team leader’. This is an administrative amendment consequential to the change in terminology outlined in Items 2 and 4.

Item 10     - Paragraph 23(2)(d)

15.   This item will ensure that the requirement to keep certain information secret will also apply to any audit team members appointed by the audit team leader. The audit team leader will also be responsible for ensuring audit team members are aware of their obligations under the Act.

Item 11     - Subsection 30(2)

16.   This item is an administrative amendment consequential to the addition of the new section 73A outlined in Item 23.

Item 12     - Paragraph 30(2) (paragraph (b) of the civil penalty)

17.   This item is an administrative amendment consequential to the addition of the new section 73A outlined in Item 23.

Item 13     - Section 56

18.   This item in conjunction with Item 14 clarifies that the list of decisions reviewable by the Administrative Appeals Tribunal is a list of options rather than a list of activities to be undertaken together.

Item 14     - Paragraphs 56(a) to (h)

19.   This item in conjunction with Item 13 clarifies that the list of decisions reviewable by the Administrative Appeals Tribunal is a list of options rather than a list of activities to be undertaken together.

Item 15     - At the end of section 56

20.   This item allows decisions by the GEDO not to register an individual as an auditor under section 75A to be reviewed by the Administrative Appeals Tribunal. It is intended that other decisions relating to the registration of auditors will also be reviewable but will be included in regulations to be developed under this section.

Item 16     - Subdivision G of Division 4 of Part 6 (heading)

21.   This item is an administrative amendment consequential to the change of terminology from ‘external audits’ to ‘greenhouse and energy audits’ as outlined in Item 5.

Item 17     - Paragraph 73(2)(a)

22.   This item allows for the GEDO to provide a list of possible auditors to a corporation in a written notice requiring an audit to be undertaken rather than only being able to specify a single auditor. This item also makes a number of administrative amendments consequential to the change of terminology from ‘external auditor’ to ‘registered greenhouse and energy auditor’ as outlined in Items 4 and 6.

Item 18     - Paragraph 73(2)(b)

23.   This item replaces the term ‘external auditor’ with ‘audit team leader’. This is an administrative amendment consequential to the change in terminology outlined in Items 2 and 4.

Item 19     - Paragraph 73(2)(b)

24.   This item removes the term ‘external’ from a reference to audits conducted under the Act. This item is an administrative amendment consequential to the change in terminology from ‘external audits’ to ‘greenhouse and energy audits’ outlined in Item 5.

Item 20     - Paragraph 73(2)(c)

25.   This item replaces the term ‘external auditor’ with ‘audit team leader’. This is an administrative amendment consequential to the change in terminology outlined in Items 2 and 4.

Item 21     - Before paragraph 73(3)(a)

26.   This item requires that any notice provided by the GEDO under this section specify the type of audit to be undertaken in addition to the matters to be covered by the audit. The types of audits will be covered in the legislative instrument to be determined under section 75 of the Act.

Item 22     - Subsection 73(4)

27.   This item replaces ‘external auditor’ with ‘audit team leader and any audit team members’ to clarify that corporate group members being audited must provide ‘all reasonable facilities and assistance necessary for the effective exercise’ of the duties of the auditor to all members of the audit team rather than just the audit team leader.

Item 23     - Subsection 73(4)

28.   This item replaces the term ‘external auditor’ with ‘audit team leader’. This is an administrative amendment consequential to the change in terminology outlined in Items 2 and 4.

Item 24     - After section 73

29.   This item creates a new section 73A that replicates section 73 but allows for audits of entities that have provided information to the GEDO under section 20 of the Act. The information provided by these entities relates to the emissions and energy of facilities under the operational control of registered corporations under the Act. This amendment will ensure that entities that provide information to the GEDO via section 20 of the Act will also be subject to audit provisions. 

Item 25     - Subsection 74(1)

30.   This item replaces ‘an external auditor’ with ‘a registered greenhouse and energy auditor as an audit team leader’. This amendment is consequential to separating out the concepts of the ‘audit team leader’ and the ‘registered greenhouse and energy auditor’. In order to conduct audits under the Act individuals will need to register with the GEDO under the new section 75A (see Item 43). Registered greenhouse and energy auditors will then be appointed as ‘audit team leaders’ either by the GEDO or by the entity being audited. Appointed audit team leaders will be required to conduct greenhouse and energy audits in accordance with the requirements outlined in the legislative instrument determined under section 75 of the Act.

Item 26     - Subsection 74(1)

31.   This item removes the term ‘external’ from a reference to audits conducted under the Act. This item is an administrative amendment consequential to the change in terminology from ‘external audits’ to ‘greenhouse and energy audits’ outlined in Item 5.

Item 27     - Subsection 74(2)

32.   This item replaces ‘auditor’ with the term ‘audit team leader’. This amendment is consequential to the change in terminology outlined in Items 2 and 4.

Item 28     - Subsection 74(2)(a)

33.   This item replaces ‘external auditor’ with the term ‘audit team leader’. This is an administrative amendment consequential to the change in terminology outlined in Items 2 and 4.

Item 29     - After paragraph 74(2)(b)

34.   This item requires that any notice provided by the GEDO under this section specify the type of audit that will be undertaken in addition to the matters to be covered by the audit. The types of audits will be covered in the legislative instrument to be determined under section 75 of the Act.

Item 30     - Subsection 74(2A)

35.   This item replaces ‘external auditor’ with ‘audit team leader and any audit team members’ to clarify that corporate group members being audited must provide ‘all reasonable facilities and assistance necessary for the effective exercise’ of the duties of the auditor to all members of the audit team rather than just the audit team leader.

Item 31     - Subsection 74(2A)

36.   This item replaces ‘external auditor’s’ with the term ‘audit team leader’s’. This is an administrative amendment consequential to the change in terminology outlined in Items 2 and 4.

Item 32     - Subsection 74(3)

37.   This item replaces ‘external auditor’ with the term ‘audit team leader’. This is an administrative amendment consequential to the change in terminology outlined in Items 2 and 4.

Item 33     - Subsection 74(3)

38.   This item removes the term ‘external’ from a reference to audits conducted under the Act. This item is an administrative amendment consequential to the change in terminology from ‘external audits’ to ‘greenhouse and energy audits’ outlined in Item 5.

Item 34     - After section 74

39.   Similarly to Item 24, this item creates a new section 74A that replicates section 74 but allows for audits of entities that have provided information to the GEDO under section 20 of the Act. The information provided by these entities relates to the emissions and energy of facilities under the operational control of registered corporations under the Act. This amendment will ensure that entities that provide information to the GEDO via section 20 of the Act will also be subject to audit provisions. 

Item 35     - Section 75

40.   This item replaces the existing section 75 with a new section similar in purpose to the existing section but with a number of amendments to clarify its application.

41.   The item will allow for the Minister to determine the requirements for the preparation, conduct and reporting of audits by legislative instrument under the Act rather than the GEDO.

42.   The item replaces the term ‘guidelines’ with ‘requirements’ in relation to the power to determine a legislative instrument for the preparation, conduct and reporting of audits. This will allow for more specific and detailed requirements to be determined rather than only guidelines.

43.   The item replaces the term ‘external auditor’ with ‘audit team leader’. This is an administrative amendment consequential to the change in terminology outlined in Items 2 and 4.

44.   The item clarifies that the legislative instrument to be determined under the section can include requirements relating to preparing for audits in addition to requirements for the conduct and reporting of audits.

45.   The item allows for the legislative instrument prepared under this section to provide for different types of greenhouse and energy audits to be conducted under the Act. This amendment relates to Items 21 and 29 that require any notices about audits provided under sections 73 to 74A to include the type of audit that is to be conducted in addition to the matters to be covered by the audit.

Item 36     - At the end of Subdivision G of Division 4 of Part 6

46.   This item establishes a new section 75A outlining the requirement for individuals to register with the GEDO if they wish to undertake audits under the Act. The item provides for details of the registration process to be outlined in subordinate legislation.

47.   Subsection (1) requires the GEDO to establish a register on which to keep the information of registered greenhouse and energy auditors.

48.   Subsection (2) requires the GEDO to register applicants if they meet the requirements for qualifications, knowledge, expertise, competence and independence specified in the regulations and determined by the GEDO in a legislative instrument created under subsection (4). It is intended that this will include robust requirements for independence similar to the requirements for auditors operating under the Corporations Act 2001

49.   Subsection (3) requires the GEDO not to register applicants if they do not meet the requirements in the regulations and determined by the GEDO in a legislative instrument created under subsection (4).

50.   Subsection (4) allows for the GEDO to determine by legislative instrument specific ways of meeting the requirements for registration as set out in regulations. This may include lists of appropriate training, qualifications or international experience.

51.   Paragraph (5)(a) allows for regulations to specify the form and content of the register of auditors.

52.   Paragraph (5)(b) allows for regulations to specify details for publishing auditor information, e.g. name, organisation and expertise. In some cases audits undertaken under the Act will allow for the auditee to select their own auditor. A public list of registered auditors will assist with this process.

53.   Paragraph (5)(c) allows for regulations to specify details for the form, content and method of applications for registration.

54.   Paragraph (5)(d) allows for regulations to make provision for cost-recovery through registration fees. Any decision to charge registration fees will be made following consultation on draft regulations developed under this section.

55.   Paragraph (5)(e) allows for regulations to be made providing for requirements around maintaining registration, e.g. notification of a change in circumstances, ongoing professional development requirements and reporting to the GEDO.

56.   Paragraph (5)(f) allows for regulations to be made specifying requirements for regular quality review of auditors.

57.   Paragraph (5)(g) allows for regulations to be made giving the regulator discretion to suspend registration in certain circumstances. It is intended that the regulations will provide for this decision to be reviewable by the Administrative Appeals Tribunal.

58.   Paragraph (5)(h) allows for regulations to be made prescribing circumstances for deregistration by the GEDO either at his/her discretion or on application by the auditor. It is intended that the regulations will also provide for this decision to be reviewable by the Administrative Appeals Tribunal.

59.   Paragraph (5)(i) allows for regulations to be made for inspection of the performance of auditors on either a targeted or routine basis.

60.   Paragraph (5)(j) allows for regulations to be made for other matters relating to registration of auditors. This may relate to other administrative or process requirements not covered by the other paragraphs in this section.

61.   Subsection (6) clarifies that any fee to be charged under paragraph (5)(d) should not amount to a form of taxation.

62.   Subsection (7) allows the GEDO to delegate part or all of the administration of the auditor registration process and decision making to a third party.

63.   Subsection (8) limits the GEDO’s power to delegate the making of the determination under subsection (4) to other SES employees or acting SES employees only.

Item 37     - Paragraph 24(1)(c)

64.   This item repeals paragraph 24(1)(c) of the Act removing the obligation of the GEDO to publish corporate level totals of energy production. This will ensure that publicly available energy production information is not confusing or misleading. Corporate level energy production totals as specified under the Act are not useable as they involve double counting of primary and secondary energy production.

65.   This item does not remove requirements under the Act to publicly disclose greenhouse gas emissions or energy consumption information. Neither does the amendment change existing requirements for corporations that trigger thresholds to report all greenhouse gas emissions, energy consumption and energy production data.

66.   Collection of energy production data will remain an important component of the Act to inform government and will underpin the Australian Energy Statistics published by the Australian Bureau of Agricultural and Resource Economics.