Save Search

Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
National Greenhouse and Energy Reporting Amendment Bill 2009

Bill home page  


Download WordDownload Word


Download PDFDownload PDF

 

 

 

 

2008 - 2009

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

SENATE

 

 

NATIONAL GREENHOUSE AND ENERGY REPORTING

AMENDMENT BILL 2009

 

 

REVISED EXPLANATORY MEMORANDUM

 

 

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

Senator the Honourable Penny Wong)

 

 

 

THIS MEMORANDUM TAKES ACCOUNT OF AMENDMENTS MADE BY

THE HOUSE OF REPRESENTATIVES

TO THE BILL AS INTRODUCED

 

 

 



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;

•                 Repeal the requirement for the GEDO to publish corporate level energy production information;

•                 Increase flexibility in establishing reporting arrangements under the NGER system prior to the deadline for reporting from the first NGER reporting year of 2008-2009 by introducing Reporting Transfer Certificates (RTC); and

•                 Allow the voluntary transfer of reporting obligations of a facility specified under the Act from a controlling corporation where one member of its group has operational control of the facility to another member of a different corporate group that has financial control of the facility. The RTC provisions closely reflects the proposed   Category B Liability Transfer Certificate (LTC) provisions outlined in the Carbon Pollution Reduction Scheme (CPRS) Bill 2009 to promote consistency in the terminology, concepts and rules between the existing NGER Act reporting regime and a future CPRS.

 

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 or be taken to commence according to the table entitled ‘Commencement information’.

 

3.       The measures in sections 1 to 3 and anything in this Act not covered elsewhere in the table are to commence the day on which this Act receives Royal Assent.

 

4.       The measures in Schedule 1 are to commence on the 28 th day after the day on which this Act receives the Royal Assent.

 

5.       The measures in Schedule 2, Part 1 are to commence the day after this Act receives the Royal Assent.

 

6.       The measures in Schedule 2, Part 2 are to commence on the later of the commencement of section 3 of the Carbon Pollution Reduction Scheme Act 2009 and immediately after the commencement of Part 1 of Schedule 2 of this Act.

 

7.       The measures in Schedule 2, Part 3 are to commence at the same time as Part 2 of Schedule 1 to the Carbon Pollution Reduction Scheme (Consequential Amendments) Act 2009 .

Clause 3 - Schedules

8.       This is a formal clause providing that each Act specified in a Schedule is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule has 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

9.        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

10.   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

11.   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 )

12.   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

13.   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 .

14.   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

15.   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 36 for more detail on registration of auditors.

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

16.   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.

17.   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)

18.   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)

19.   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)

20.   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)

21.   This item is an administrative amendment consequential to the addition of the new section 73A outlined in Item 24.

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

22.   This item is an administrative amendment consequential to the addition of the new section 73A outlined in Item 24.

Item 13     - Section 56

23.   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)

24.   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

25.   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)

26.   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)

27.   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)

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 19     - Paragraph 73(2)(b)

29.   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)

30.   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)

31.   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)

32.   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)

33.   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

34.   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)

35.   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 36). 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)

36.   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)

37.   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     - Paragraph 74(2)(a)

38.   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)

39.   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)

40.   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)

41.   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)

42.   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)

43.   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

44.   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

45.   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.

46.   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.

47.   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.

48.   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.

49.   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.

50.   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

51.   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.

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

53.   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.

54.   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).

55.   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.

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

57.   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.

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

59.   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.

60.   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.

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

62.   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.

63.   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.

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

65.   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.

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

67.   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. Greenhouse and energy auditing is a relatively new, but growing, industry, with limited certification options for auditors. Industry stakeholders have indicated, however, that there will be increased interest in the future for the provision of third party certification of greenhouse and energy auditors similar to that already available for other auditing professions. This subsection allows for the GEDO to delegate the administration of registered greenhouse and energy auditors to a third party certification body in the future if appropriate industry self-regulation becomes available. If those circumstances do eventuate and a wider delegation is required, specific guidance or criteria about to whom the wider delegation could apply will be provided by the GEDO. The GEDO does not currently intend to delegate the decision making functions to anyone other than SES officers or acting SES officers.

68.   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.



Part 2 - Amendment relating to publishing of information

Item 37     - Paragraph 24(1)(c)

69.   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.

70.   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.

71.   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.

SCHEDULE 2 - AMENDMENTS RELATING TO REPORTING TRANSFER CERTIFICATES

Part 1 - General Amendments

Item 1 - Section 7

72.   This item defines financial control in accordance with new section 22R, which specifies the requirements for establishing financial control .

Item 2 - Section 7

73.   This item defines interim financial year . The three financial years following commencement of the Act on 1 July 2008 are defined as interim financial years for the purposes of enabling the RTC concept. The RTC concept is a provisional approach that will be in effect for the three financial years (i.e. 2008-2009 to 2010-2011 NGER reporting years) leading up to the beginning of the CPRS. RTCs will be cancelled on 30 June 2011 and corporations with operational and financial control of the RTC facility will need to arrange to apply for a new “Liability Transfer Certificate” (LTC) with the ACCRA as outlined in the CPRS Bill 2009.

Item 3 - Section 7

74.   This item defines reporting transfer certificate in accordance with new section 22L, which gives meaning to the certificate which is issued to the RTC applicant. 

Item 4 - Section 7

75.   This item defines reporting transfer test in accordance with new section 22J, which outlines the criteria to be fulfilled in order for assessment and issuing of an RTC to the applicant. 

Item 5 - At the end of section 13

76.   This item inserts a new subsection 13(3).  The intention of this subsection is that a facility which has an RTC in place will be disregarded for the purpose of determining whether the group thresholds in section 13 of the Act have been met.

Item 6 - After subsection 17(3)

77.   This item inserts a new subsection 17(3A). This amendment requires the GEDO to register a corporation if an RTC has been issued to the corporation and it has not already been registered under Division 3 of the Act. 

Holders of an RTC will also need to be registered under the Act, and will need to come within the definition of 'registered corporation'.

To streamline the registration process and avoid RTC holders from having to apply separately for registration, the GEDO will register them automatically when an RTC is granted. 

Item 7 - Subsection 18(3)

78.   This item repeals subsection 18(3) of the Act and replaces it with a new subsection 18(3).  This subsection currently sets out what an application for deregistration must contain and what matters the GEDO must take into account when making a decision to deregister a corporation. The new subsection will require the GEDO to be satisfied that the corporation applying for deregistration is not the holder of a RTC.

Item 8 - At the end of subsection 19(1)

79.   This item inserts new Note 3A in subsection 19(1) to allow reports under section 19 and the new section 22G to be set out in the same document.

Item 9 - Before subsection 19(6)

80.   This item inserts a new subsection 19(5A). The effect of this insertion is that a member of a corporation’s group does not have operational control of a facility for a given day during an interim financial year if another person holds an RTC for that facility on that day.

Item 10 - At the end of section 22

81.   This item inserts a new subsection 22(5). RTC holders have separate reporting and record keeping obligations under Part 3E. Therefore section 22 does not apply to RTC holders.

Item 11 - Before Part 4

82.   This item inserts a new Part 3E - Reporting obligations of holders of reporting transfer certificates.  Several amendments are made in item 11:

 

•                 This item adds a new Division 1 - Reporting obligations.

Specific reporting obligations are required for RTC holders. Current section 19 refers specifically to reporting obligations of controlling corporations, and its members with operational control of facilities. RTC holders are also ‘registered corporations’, but they are not necessarily a controlling corporation and are provided with an RTC on the basis that they have financial control .

 

-                This item adds a new section 22G - Report to be given to Greenhouse and Energy Data Officer.

A corporation holding an RTC for all or part of a financial year must report to the GEDO the greenhouse gas emissions, energy production and energy consumption from the operation of that facility during that time in accordance with 22G. Failure to do so may be an offence under Division 137 of the Criminal Code and a non-compliant corporation may be liable for a civil penalty of 2000 penalty units.

Reports required under 22G must be supplied to the GEDO in an approved manner and form. They must be based on methods determined by the Minister under 10(3) or by a method which meets criteria determined by the Minister. Reports under this provision must include any information specified by the regulations for s22G and be provided before the end of 4 months after the end of the interim financial year.

The Regulations may provide different requirements for different circumstances. These may include the requirement for a corporation to provide information to the GEDO that has been requested by a State or Territory for the GEDO to collect.

In relation to a facility, a corporation reporting under 22G(1) for an interim year that does not meet greenhouse gas emissions of a carbon dioxide equivalence of 25 kilotonnes or more, and did not produce 100 terajoules or more of energy, and did not consume 100 terajoules or more of energy, regulations may specify different reporting requirements for a report to be submitted to the GEDO. It is not the intention, when a threshold is not met, to remove all reporting obligations from the RTC holder.

22G(6) allows section 19 and 22G reports to be set out in the same document.

Where no regulations are in force for the purpose of paragraph 2(c) then current regulations for the purpose of 19(6)(c) have effect if they were made for the purpose of 22G(2)(c), the provision in paragraph 2(c) and the regulations are read in reference to a facility to which an RTC relates, and those regulations were otherwise appropriately modified.



-                This item adds a new section 22H Records to be kept. 

The RTC holder who is or was required to provide a report under section 22G for an interim financial year must keep records of the corporation’s activities that:

·       allow the corporation to report accurately under section 22G; and

·       enable the GEDO to ascertain whether the corporation has complied with the corporation’s obligations under section 22G.

In line with existing record keeping provisions in the Act, the RTC holder must retain the records for 7 years from the end of the financial year in which the activities take place.

 

•                 This item adds a new Division 2 - Reporting transfer certificates.

 

-                This item adds a new section 22J Reporting transfer test.

An RTC allows the reporting obligation of a facility to be transferred to a corporation that has financial control of the facility which is under the operational control of another member of a different controlling corporation.

The transferee corporation must be a company registered under Part 2A.2 of the Corporations Act 2001 . The corporation must be a constitutional corporation and not a foreign corporation. The transferee cannot be within the same controlling corporation’s group as the transferor corporation (operator).

Financial control for the purposes of the Act (refer to Clause 22R ), is intended to encompass a corporation that has significant ability to control a facility through financial means only and therefore give effect to decisions relating to greenhouse gas emissions reductions.

The meaning of financial control recognises that more than one person may have financial control over a facility. For example, several persons may be participants in a joint venture or partnership that collectively have financial control of a facility. In these circumstances, the person with the equal or greatest share in the economic benefits from a facility will have financial control for the purposes of the Act.

 

Member Y, which is part of Controlling Corporation A’s group, is the operator of Facility 1. Member F, which is part of Controlling Corporation B’s group, has financial control over Facility 1. Member F (with consent from Corporation A and Corporation B) applies to the GEDO for a reporting transfer certificate.

A certificate is issued and Member F takes on all reporting obligations and liabilities for Facility 1 under the National Greenhouse and Energy Reporting Act 2007 , including reporting in relation to greenhouse gas emissions, energy production and energy consumption. Facility 1 emissions do not count toward Corporation A’s nor Corporation B’s thresholds.

 

-                This item adds a new section 22K - Application for reporting transfer certificate.

An application to obtain a RTC must be made in writing in a form approved by the GEDO. An application by a corporate group member that has financial control of a facility must be accompanied by the written consent of its controlling corporation to take on the reporting obligations established by the Act.

Also, for the applicant to acquire an RTC they must obtain the written consent of the controlling corporation of the transferor that it has agreed to give the applicant such information as necessary for the applicant to comply with obligations that will be imposed on the applicant by the Act in relation to the facility if the certificate is issued.

The application must also include any information and documents that are specified in the form approved by the GEDO.

 

-                This item adds a new section 22KA - Further information.

The GEDO may request further information in relation to an application within a period specified in a notice given by the GEDO. If the applicant does not meet this request within the time specified, the GEDO may refuse to consider the application or refuse to take any action, or any further action, in relation to the application.

 

-                This item adds a new section 22L - Issue of reporting transfer certificate.

After considering the application, the GEDO may issue to the applicant an RTC for a facility on the grounds it has satisfied certain criteria.

The GEDO must be satisfied the applicant passes the RTC transfer test ( Clause 22J ) and it has the capacity and access to the required information to comply with its obligations under the Act.

The threshold criteria ensures that only facilities that are expected to meet the facility level threshold are considered for an RTC. The thresholds for the operation of the facility during an interim year are:

·       emissions of greenhouse gases that have a carbon dioxide equivalence of 25 kilotonnes or more;

·       production of energy of 100 terajoules or more; and

·       consumption of energy of 100 terajoules or more.

The GEDO is required to take all reasonable steps to ensure that a decision is made on an application for a reporting transfer certificate within 90 days of receiving an application or within 90 days of being given further information. The GEDO must inform an applicant in writing if it decides to refuse to issue an RTC.

 

-                This item adds a new section 22M - Duration of reporting transfer certificate.

An RTC comes into force on the day specified in the certificate as the day on which the certificate is to come into force (the start day ). The start day may be earlier than the day on which the certificate is issued, so long as it occurs either in the same financial year as the day on which the certificate is issued, or the financial year preceding the financial year in which the certificate is issued.

The start day may only be earlier than the day on which the certificate is issued if the applicant and the relevant parties consent to the specification of that start day.

An RTC remains in force until the end of 30 June 2011.



-                This item adds a new section 22N - Surrender of reporting transfer certificate.

If an RTC holder wishes to surrender an RTC it must obtain written consent from the GEDO to do so. The GEDO must not consent to the surrender unless:

·       where applicable, the controlling corporation(s) that agreed to the making of the application for the certificate agrees to the surrender; and

·       the GEDO is satisfied that there are special circumstances that warrant the giving of its consent to the surrender.

 

-                This item adds a new section 22P - Cancellation of reporting transfer certificate.

The GEDO must, by written notice, cancel an RTC in the following circumstances:

·       if a company ceases to pass the reporting transfer test in relation to the facility concerned; or

·       if the corporation has become an externally-administered body corporate (within the meaning of the Corporations Act 2001 ); or

·       if regulations specify one or more other grounds for cancellation and at least one of those grounds is applicable to the company.

The cancellation or surrender of an RTC will result in future obligations and liability returning to the person that would have had obligations and liability in the absence of the RTC.

 

-                This item adds a new section 22Q - Reporting transfer certificate is not transferable.

An RTC is not transferable.

 

-                This item adds a new section 22R - Financial control.

This clause outlines the allowable scenarios for the application of financial control for the purposes of the Act. It is intended to encompass a corporation that has significant ability to control a facility through financial means only and therefore give effect to decisions relating to greenhouse gas emissions reductions. It is not intended to include an agent or person acting on behalf of a corporation that has financial or operational control of a facility who may not have any direct influence on greenhouse gas emissions reductions.

The meaning of financial control recognises that more than one person may have financial control over a facility. For example, several persons may be participants in a joint venture or partnership that collectively have financial control of a facility. In these circumstances, the person with the equal or greatest share in the economic benefits from a facility will have financial control for the purposes of the Act.

Item 12 - Before subsection 24(1B)

83.   This item specifies that the GEDO must publish on a website the scope 1, scope 2 and energy consumption figures from interim financial year reports submitted by the RTC holder. The GEDO may also publish the methods and ratings to each measure in accordance with those methods under the determination under section 10(3).

This amendment is aligned with existing NGER obligations.

Item 13 - Before subsection 24(2)

84.   This item specifies that the GEDO is restricted from publishing certain information where an application has been made under section 25 and has been accepted by the GEDO.

This amendment is aligned with existing Act obligations.

Item 14 - Subsection 25(1)

85.   This item specifies that an RTC holder may apply to request the GEDO not to publish information if it could be demonstrated that the information could be capable of revealing trade secrets or have other negative impacts on matters of commercial value.

Item 15 - Before subsection 30(3)

86.   This item imposes a civil penalty of 100 penalty units per day for failing to comply with s22G requirements. This is analogous with standard NGER continuing contraventions.

Item 16 - After paragraph 56(d)

87.   An application may be made to the Administrative Appeals Tribunal for the review of a decision of the GEDO to a refusal to issue an RTC, consent to the surrender of an RTC or cancelling an RTC.

 

Part 2 - Consequential amendments relating to the Australian Climate Change Regulatory Authority

Items 17 to 32 (References to the Greenhouse and Energy Data Officer)

88.   These items will only commence on the commencement of section 3 of the Carbon Pollution Reduction Scheme Act 2009 .

Amendments at Items 17 - 32 omit references to the GEDO in provisions to be inserted by the parliamentary amendments moved in relation to the NGER Bill 2009, and insert references to the ACCRA. The ACCRA will administer the CPRS, the reporting regime and the renewable energy requirements.  It will be established by the ACCRA Bill 2009. 

 

Part 3 - Consequential amendments relating to publication of information

Item 33 - Paragraphs 24(1AD)(a) and (b)

89.   Item 12 above amends section 24 by inserting subsections 24(1AD) and 24(1AE).  These sections address the matters which the Regulator is required to or may publish in relation to reports by holders of RTCs.

The inserted subsections foreshadow that Regulations will define ‘greenhouse gas emissions that are scope 1 emissions’ and ‘greenhouse gas emissions that are scope 2 emissions’.

This item amends paragraphs 24(1AD)(a) and (b) by omitting references to the Regulations for the meaning of scope 1 and scope 2 emissions. The reason for this amendment is that the combined effect of Items 137-138 and 156-157 of the CPRS (Consequential Amendments) Bill 2009 is that Regulations will be made under section 10 to define scope 1 and scope 2 emissions of greenhouse gas from 1 July 2011.