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Clean Energy Regulator Bill 2011

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2010-2011

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

SENATE

 

 

 

CLEAN ENERGY REGULATOR Bill 2011

 

 

 

 

REVISED EXPLANATORY MEMORANDUM

 

 

(Circulated by the authority of the Minister for Climate Change

 and Energy Efficiency, the Honourable Greg Combet AM MP)

 

 

 

 

THIS EXPLANATORY MEMORANDUM TAKES ACCOUNT OF

AMENDMENTS MADE BY THE HOUSE OF REPRESENTATIVES TO THE BILL

AS INTRODUCED

 

 



T able of contents

Glossary.............................................................................................................. 1

General outline and financial impact............................................................ 3

Chapter 1               Clean Energy Regulator.................................................... 7

Index................................................................................................................. 25

 

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The following abbreviations and acronyms are used throughout this explanatory memorandum.

Abbreviation

Definition

Authority

Climate Change Authority

Carbon pricing mechanism

The mechanism embodied in the Clean Energy Bill 2011 and associated provisions

CFI

Carbon Farming Initiative

Climate change law

The laws listed in Table 1.1

Consequential amendments bill

Clean Energy (Consequential Amendments) Bill 2011

Department

Department of Climate Change and Energy Efficiency

GEDO

Greenhouse and Energy Data Officer

Main bill

Clean Energy Bill 2011

NGERS

National Greenhouse and Energy Reporting System

ORER

Office of the Renewable Energy Regulator

Regulator

Clean Energy Regulator

UNFCCC

United Nations Framework Convention on Climate Change



The 2011 Clean Energy Legislation Package

The Clean Energy Regulator Bill 2011 is part of the Clean Energy Legislation Package, which sets up the carbon pricing mechanism (the mechanism) as part of the Government’s climate change plan, as set out in Securing a clean energy future: the Australian Government’s climate change plan

The full policy context and background to the mechanism is set out in the explanatory memorandum for the Clean Energy Bill 2011.  A description of the bills which will introduce the mechanism is set out below. 

Table I: The Clean Energy Bill 2011 and related bills

Main bill

The Clean Energy Bill 2011 (the main bill) creates the mechanism.  It sets out the structure of and process for introducing the mechanism.  These include:

·          entities and emissions that are covered by the mechanism;

·          liable entities’ obligation to surrender emissions units corresponding to their emissions;

·          limits on the number of emissions units that will be issued;

·          the nature of carbon units;

·          allocation of carbon units, including by auction and the issue of free units’;

·          mechanisms to contain costs, including the fixed charge period and price floors and ceilings;

·          linking to other emissions trading schemes;

·          assistance in relation to emissions-intensive trade-exposed activities and coal-fired electricity generators; and

·          monitoring and enforcement.

 

Statutory bodies

 

The Clean Energy Regulator Bill 2011 sets up the Clean Energy Regulator, which is a statutory authority that will administer the mechanism and enforce the law. 

The responsibilities of the Regulator include:

·          providing education on the mechanism, particularly about the administrative arrangements of the mechanism;

·          assessing emissions data to determine each entity’s liability;

·          operating the Registry;

·          monitoring, facilitating and enforcing compliance with the mechanism;

·          allocating permits including freely allocated permits, fixed price permits and auctioned permits;

·          applying legislative rules to determine if a particular entity is eligible for assistance in the form of permits to be allocated administratively, and the number of other permits to be allocated;

·          administering the National Greenhouse and Energy Reporting System (NGERS), the Renewable Energy Target and the Carbon Farming Initiative (CFI); and

·          accrediting auditors for the CFI and NGERS.

 

The Climate Change Authority Bill 2011 sets up the Climate Change Authority, which will be an independent body that provides the Government expert advice on key aspects of the mechanism and the Government’s climate change mitigation initiatives.

The Government will remain responsible for carbon pricing policy decisions.

This Bill also sets up the Land Carbon and Biodiversity Board which will advise on key initiatives in the land sector.

Consequential amendments

The Clean Energy (Consequential Amendments) Bill 2011 (the consequential amendments bill) makes consequential amendments to ensure:

·          the National Greenhouse and Energy Reporting System (NGERS) supports the mechanism;

·          the Australian National Registry of Emissions Units covers the mechanism and the CFI;

·          the Regulator covers the mechanism, the CFI, the Renewable Energy Target and NGERS;

·          the Regulator and Authority are set up as statutory agencies and regulated by public accountability and financial management rules;

·          that emissions units and their trading are covered by laws on financial services and regulated by ASIC;

·          that activities related to emissions trading are covered by laws on money laundering and fraud;

·          synthetic greenhouse gases are subject to an equivalent carbon price applied through existing regulation of those substances;

·          the Regulator can work with other national regulatory bodies, including ASIC, the ACCC and Austrac;

·          the taxation treatment of emissions units for the purposes of GST and income tax is clear; and

·          the Conservation Tillage Refundable Tax Offset is established.

Technical bills

Those elements of the mechanism which oblige a person to pay money are implemented through separate bills that comply with the requirements of section 55 of the Constitution

These bills are the Clean Energy (Unit Shortfall Charge—General) Bill 2011 , the Clean Energy (Unit Issue Charge—Auctions) Bill 2011 , the Clean Energy (Unit Issue Charge—Fixed Charge) Bill 2011, the Clean Energy (Charges—Excise) Bill 2011, the Clean Energy (Charges—Customs) Bill 2011, the Clean Energy (International Unit Surrender Charge) Bill 2011, the Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment Bill 2011 and the Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Bill 2011

Related bills

Other elements of the Government’s Climate Change Plan are being implemented through other legislation. These are:

·          the Clean Energy (Excise Tariff Legislation Amendment) Bill 2011 and the Clean Energy (Customs Tariff Amendment) Bill 2011 , which impose an effective carbon price on transport fuels (other than those used by households and in light commercial vehicles) through excise and customs tariffs;

·          the Clean Energy (Fuel Tax Legislation Amendment) Bill 2011 , which reduces the business fuel tax credit entitlement of non-exempted industries for their use of liquid and gaseous transport fuels, in order to provide an effective carbon price on business through the fuel tax system; and

·          the Clean Energy Amendment (Household Assistance Amendments) Bill 2011 , Clean Energy (Tax Laws Amendments) Bill 2011 and the Clean Energy (Income Tax Rates Amendments) Bill 2011, which will implement the household assistance measures announced by the Government on 10 July 2011. These bills amend relevant legislation to increase pensions and allowances, income support allowances and family payments and provide income tax cuts for lower and middle income households.

The Clean Energy Regulator Bill 2011 needs to be read in the context, in particular, of the first two bills mentioned above:

•    the main bill contains the detail concerning the Regulator’s functions and powers relating to the mechanism;

•    the consequential amendments bill amends the National Greenhouse and Energy Reporting Act 2007, the Renewable Energy (Electricity) Act 2000, the Carbon Credits (Carbon Farming Initiative) Act 2011 and the Australian National Registry of Emissions Units Act 2011 to establish a single climate change regulatory authority.

Clean Energy Regulator Bill 2011

The Clean Energy Regulator Bill 2011 establishes the Clean Energy Regulator (Regulator), which will be responsible for administering the mechanism included in the Clean Energy Plan, the Carbon Farming Initiative, the National Greenhouse and Energy Reporting System, the Renewable Energy Target and the Australian National Registry of Emissions Units.

Date of effect Upon commencement of section 3 of the proposed Clean Energy Act 2011, which is on a day to be fixed by Proclamation (assuming the conditions in section 2 of that Act are satisfied).

Proposal announced The measures are based on the positions included in the Government’s announcement on 10 July 2011.

Financial impact The financial impact is addressed in the explanatory memorandum for the main bill.

Compliance cost impact The Regulation Impact Statement for the mechanism is available at http://ris.finance.gov.au . The RIS was prepared by the Department of Climate Change and Energy Efficiency and has been assessed as adequate by the Office of Best Practice Regulation.

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C hapter 1     

Clean Energy Regulator

Outline of chapter

1.1                   The explanatory memorandum describes the Regulator’s functions and powers, membership, planning and reporting obligations and the secrecy provisions.

Overview of amendments

Two regulators abolished, one created

1.2                   As well as administering the carbon pricing mechanism (the mechanism), the Renewable Energy Target, the Carbon Farming Initiative and the National Registry of Emissions, the Regulator will also be responsible for the functions of the Office of the Renewable Energy Regulator (ORER) and the Greenhouse and Energy Data Officer (GEDO), as shown in Diagram 1.1 below.

Diagram 1.1 Proposed Regulatory Functions of the Regulator

1.3                   The advantages of this arrangement are expected to be:

•        improved regulatory outcomes, including reduced risk of conflicts or gaps emerging between regulators with separate functions;

•        streamlined procedures for reporting and surrender of emissions units by liable entities under the mechanism;

•        reduced burden for businesses that would otherwise need to deal with two or three regulators;

•        economies of scale in the administration of legislation; and

•        consistency with current Australian Government policy on the governance arrangements for Australian Government bodies.

Regulator to be independent from Government

1.4                   The Government’s intention is to set up an independent regulator to administer the mechanism within a limited and legislatively prescribed discretion.  Such an arrangement is expected to reduce the risk that the regulator’s decisions are based on factors other than the mechanism’s objectives, and should also contribute to efficient and effective administration.

1.5                   This intention is reflected in a number of elements in the bill, including the limited scope for Ministerial directions to the Regulator and the limited grounds on which a member of the Regulator may be removed from office.

1.6                   A new Regulator is proposed because no single existing regulator has the capabilities needed to administer the range of functions required under climate change laws.

Summary of new law

1.7                   The bill establishes the Regulator as a body corporate comprising a Chair and between two and four other members.

1.8                   The primary functions of the Regulator are to administer the mechanism, the Carbon Farming Initiative, the National Greenhouse and Energy Reporting System, the Renewable Energy Target and the National Registry of Emissions.

1.9                   For the purposes of the Public Service Act 1999 , the Chair of the Regulator is the head of a statutory agency and can employ Australian Public Sector employees on behalf of the Commonwealth.

1.10               In order to ensure proper use and management of public money, public property and other Commonwealth resources, the Regulator will be bound by the Financial Management and Accountability Act 1997 .

1.11               The Regulator will be required to produce a corporate plan setting out the Regulator’s objectives and the strategies and policies that are to be used to achieve those objectives.

1.12               The Regulator will also be required to produce an annual report, which will be tabled in Parliament.

1.13               As with many other regulators, such as the Australian Securities and Investments Commission, the Regulator is subject to Ministerial direction on general matters only. 

1.14               The Minister may only terminate an appointment to the Regulator on narrow grounds, including for misbehaviour, physical or mental incapacity or repeated absence from meetings of the Regulator.

1.15               The bill contains provisions designed to ensure that information obtained by the Regulator in the course of its functions is only disclosed and used for legitimate purposes.

Comparison of key features of new law and current law

New arrangements

Current arrangements

One Regulator established to administer the mechanism, the Carbon Farming Initiative, the National Greenhouse and Energy Reporting System, the Renewable Energy Target and the Australian National Registry of Emissions Units

Carbon Farming Initiative, to be administered by the Carbon Credits Administrator upon commencement of the Carbon Credits (Carbon Farming Initiative) Act 2011

National Greenhouse and Energy Reporting System administered by the Greenhouse and Energy Data Officer

Renewable Energy Target administered by the Office of the Renewable Energy Regulator

National Registry of Emissions administered by the Department

Detailed explanation of new law

Establishment of Regulator

1.16                The bill establishes the Regulator.  [Part 2, Division 1, clause 11]

Nature of the Regulator

1.17                The Regulator is a body corporate, comprising a Chair and between two and four other members.  [Part 2, Division 2, clause 16] [Part 2, Division 2, clause 17]

1.18                As with many other regulators, such as the Australian Securities and Investments Commission, the Regulator is subject to Ministerial direction on general matters only.  [Part 2, Division 8, clause 41] The policy intention of this provision is to ensure that the Regulator is accountable to the Minister and acts consistently with Australian Government policy, whilst not empowering the Minister to intervene in particular cases, for example the issue of carbon units to a particular person.

1.19                A Ministerial direction to the Regulator has the status of a legislative instrument.  [Part 2, Division 8, clause 41] This promotes transparency, as it means directions must be tabled in Parliament and incorporated into the Federal Register of Legislative Instruments.  In line with the usual provisions for Ministerial directions, the directions are not disallowable ( Legislative Instruments Act 2003 , section 44(2), Item 41).

1.20                While the Regulator is to be independent from specific direction by Government, its nature as a government authority is recognised through a number of provisions.  In particular:

•        contracts entered into by the Regulator are entered into on behalf of the Commonwealth [Part 2, Division 1, clause 13(3)]

•        any real or personal property held by the Regulator is held for and on behalf of the Commonwealth [Part 2, Division 1, clause 13(4)]

•        any money received by the Regulator is received for and on behalf of the Commonwealth [Part 2, Division 1, clause 13(5)]

•        any financial liabilities of the Regulator are taken to be liabilities of the Commonwealth [Part 2, Division 1, clause 14]

•        the Regulator has the privileges and immunities of the Crown in right of the Commonwealth [Part 2, Division 1, clause 15]

•        the Regulator will be subject to the Financial Management and Accountability Act 1997 , which provides for the proper use and management of public money, public property and other Commonwealth resources.  (This will be achieved through the consequential amendments bill rather than through this bill).

Functions of Regulator

1.21                The Regulator has the following functions:

•        such functions as are conferred on the Regulator by a climate change law

•        such functions as are conferred on the Regulator by any other law of the Commonwealth

•        to do anything incidental to or conducive to the performance of any of the above functions. 

[Part 2, Division 1, clause 12]

1.22                The following table lists ‘climate change laws’ as defined in the bill, and summarises the relevant functions conferred by those laws on the Regulator.

Table 1.1 : Summary of functions conferred on the Regulator by climate change laws

Climate change law

Summary of Regulator’s functions

This bill

•        The functions set out in paragraph 1.21 above.

•        The planning and reporting functions set out from paragraph 1.51 below.

Clean Energy Bill 2011

•        To take various actions and decisions needed for the smooth functioning of the mechanism, including:

-       Auctioning emissions units

-       Allocating emissions units in relation to emissions-intensive trade-exposed activities and coal-fired electricity generation

-       Assessing shortfalls in emissions units surrendered by liable entities

-       Overseeing the transfer of liability for emissions between corporate entities in some circumstances.

•        To monitor and promote compliance with the mechanism.

•        To conduct and/or co-ordinate education programs about the mechanism.

•        To advise the Minister on matters relating to the mechanism.

•        To advise and assist persons in relation to their obligations under the mechanism.

•        To liaise with regulatory and other bodies, whether in Australia or elsewhere.

•        To collect, analyse, interpret and disseminate statistical information relating to the mechanism.



 

Regulations under the Clean Energy Bill 2011

•        None at this stage.

Carbon Credits (Carbon Farming Initiative) Act 2011

•        Approving eligible domestic offsets projects and allocating Australian carbon credit units for those projects. 

National Greenhouse and Energy Reporting Act 2007

(as amended by the consequential amendments bill)

•        Collecting information on greenhouse gas emissions, energy consumption and production data from registered corporations and entities with reporting obligations under the mechanism.

•        Public disclosure, and disclosure to Commonwealth and State agencies, of corporate-level greenhouse gas emissions and energy information.

Regulations under the National Greenhouse and Energy Reporting Act 2007

•        These regulations provide details on matters relevant to the obligations of registered corporations and liable entities under the mechanism.

Renewable Energy (Electricity) Act 2000

•        Administration of the Renewable Energy Target, including:

-       Accrediting eligible renewable energy power stations

-       Maintaining registers, including the register of Renewable Energy Certificates

-       Monitoring and enforcing compliance with the Act.

Regulations under the Renewable Energy (Electricity) Act 2000

•        These Regulations contain detail around some matters contained in the Renewable Energy (Electricity) Act 2000

Renewable Energy (Electricity) (Charges) Act 2000

•        This Act creates the charge to be paid per unit of electricity where there is a failure to comply with the Renewable Energy (Electricity) Act 2000 .  The Regulator will be responsible for recovering this charge as part of its function of enforcing compliance with that Act.

Australian National Registry of Emissions Units Act 2011

•        Maintaining a National Registry to track emissions units.

Powers of Regulator

1.23                The Regulator has the general power to do all things necessary or convenient to be done for, or in connection with, the performance of its functions.  [Part 2, Division 1, clause 13(1)]

1.24                The Regulator may enter into contracts.  [Part 2, Division 1, clause 13(2)] This would allow the Regulator to, for example, engage consultants or enter into contracts for premises and equipment.

1.25                These powers are in addition to the specific powers given to the Regulator under the legislation set out in Table 1.1 .  For example, under the main bill the Regulator will have a range of enforcement powers, including the power to bring proceedings for civil penalty orders.

Exercise of functions and powers

1.26                The Regulator may, by writing, delegate functions and powers to:

•        a member of the Regulator or

•        a member of the staff of the Regulator who is a Senior Executive Service or Acting Senior Executive Service employee, or an Executive Level 2 officer in the Australian Public Service or

•        an Australian Public Service employee in the Department, who is a Senior Executive Service or Acting Senior Executive Service employee, or an Executive Level 2 officer, assisting the Regulator under section 37 of the Act.  [Part 2, Division 5, clause 35]

Membership of the Regulator

Number of Members

1.27                As noted above, the Regulator will comprise a Chair and between two and four other members.  [Part 2, Division 2, clause 17]

Term of Membership

1.28                The Chair must hold office on a full-time basis, and other members may hold office on either a full-time or part-time basis.  [Part 2, Division 2, clause 18(3) and 18(4)]

1.29                All members are to be appointed for a period of up to five years.  [Part 2, Division 2, clause 19]

Expertise of Members

1.30                The Minister is responsible for appointing members of the Regulator.  [Part 2, Division 2, clause 18(1)]   Before appointing a member, the Minister must be satisfied that the member has substantial experience or knowledge and significant standing in at least one of the following fields:

•        economics

•        industry

•        energy production and supply

•        energy measurement and reporting

•        greenhouse gas emissions measurement and reporting

•        greenhouse gas abatement measures

•        financial markets

•        trading of environmental instruments

•        land resource management

•        public administration. 

[Part 2, Division 2, clause 18(2)]

1.31                This list reflects the wide range of skills and expertise necessary for the Regulator to perform its functions at the highest possible quality.  Recognising its regulatory functions, this list differs, in some significant respects, from the relevant fields of knowledge required of Authority members.  For instance, in contrast to the Authority, ‘climate science’ is not listed as a relevant field of knowledge for the Regulator.  This is because the Regulator’s focus is on administration and enforcement of the climate change programs, rather than advising on major policy issues (such as emissions reductions trajectories) where a knowledge of climate science would be valuable.

1.32                Public administration skills and experience are highly relevant to the functions of Regulator members.  In order to ensure proper use and management of public money, public property and other Commonwealth resources, the Regulator will be subject to the Financial Management and Accountability Act 1997 .  The Chair of the Regulator will perform functions and exercise powers relating to public administration as the Chief Executive under this legislation. 

1.33                The Chair of the Regulator is the head of a Statutory Agency under the Public Service Act 1999 and can employ Australian Public Sector employees on behalf of the Commonwealth.  The Chair will be expected to direct these staff in their duties.

Acting Members

1.34                The bill anticipates that a member of the Regulator may be unable to perform the duties of the office from time to time, such as when absent from Australia.  The Minister can appoint an Acting Chair or Acting Member (as appropriate) in such circumstances.   [Part 2, Division 2, clause 20]

1.35                The Minister may also appoint an additional member or members to the Regulator if there is a vacancy - that is, where there are less than four members in addition to the Chair.  [Part 2, Division 2, clause 20] [Part 1, clause 5] [1]

Terms and conditions for members of the Regulator

Remuneration and entitlements of Regulator members

1.36                Members of the Regulator are to be paid at a rate determined by the Remuneration Tribunal, the independent tribunal established under the Remuneration Tribunal Act 1973 to handle the remuneration of key Commonwealth offices.  Where no determination has been made by the Tribunal, members are paid at the rate prescribed in regulations.  [Part 2, Division 3, clause 21]

1.37                A full-time member of the Regulator has the recreation leave entitlements determined by the Remuneration Tribunal, and may be granted additional leave (other than recreation leave) by the Minister.  [Part 2, Division 3, clause 25]

1.38                The Chair of the Regulator may grant leave of absence to a part-time member on terms and conditions decided by the Chair .  [Part 2, Division 3, clause 25]   It is not possible for recreation leave for part-time members to be set by the Remuneration Tribunal, as the Remuneration Tribunal Act only authorises determinations for full-time members of bodies like the Regulator (see section 7(3AA) of the Remuneration Tribunal Act 1973 ). 

Resignation and Termination

1.39                A Regulator member may resign by giving the Minister a written resignation.  [Part 2, Division 3, clause 26]

1.40                The Minister may only terminate an appointment on narrow grounds, including for misbehaviour, physical or mental incapacity or repeated absence from meetings of the Regulator.  [Part 2, Division 3, clause 27]

1.41                In the event that any terms and conditions of employment need to be specified and are not already dealt with in the bill, the Minister may make a determination on those matters.  [Part 2, Division 3, clause 28]

Decision-making by the Regulator

1.42                The bill is not prescriptive as to how the Regulator should make decisions.  Subject to some minimum requirements, the Regulator can regulate proceedings at its meetings as it sees appropriate.  [Part 2, Division 4, clause 33]

1.43                These minimum requirements are:

•        the Regulator should hold such meetings as are necessary for the performance of its functions [Part 2, Division 4, clause 29]

•        the Chair presides at all meetings at which he or she is present [Part 2, Division 4, clause 30(1)]

•        if the Chair is not present, the other members present must appoint one of themselves to preside [Part 2, Division 4, clause 30(2)]

•        two members constitute a quorum [Part 2, Division 4, clause 31]

•        questions are resolved by a majority of votes [Part 2, Division 4, clause 32]

•        if votes are evenly split, the presiding member has a casting vote [Part 2, Division 4, clause 32]

•        the Regulator must keep minutes of its meetings.  [Part 2, Division 4, clause 34]

Conflicts of interest

1.44                The bill contains a number of provisions aimed at ensuring that the Regulator’s members do not have interests that conflict with the proper performance of their duties.  In particular, the bill establishes:

•        a general requirement that members must give written notice to the Minister of all interests that conflict, or could conflict, with the proper performance of their functions [Part 2, Division 3, clause 22]

•        a specific requirement that members disclose to a meeting of the Regulator a conflict of interest in any matter before the Regulator, and absent themselves from any deliberation or decision with respect to that matter unless the Regulator otherwise determines [Part 2, Division 3, clause 23]

•        a prohibition on a full-time member of the Regulator from engaging in any other paid employment without the Minister’s approval [Part 2, Division 3, clause 24(1)]

•        a prohibition on any part-time member from engaging in any paid employment that conflicts, or may conflict, with the proper performance of his or her duties.  [Part 2, Division 3, clause 24(2)]

1.45                A failure to comply with above requirements may provide grounds for the termination of a member’s appointment.  [Part 2, Division 3, clause 27(2)]

Resourcing

Staff

1.46                For the purposes of the Public Service Act 1999 , the Chair of the Regulator is the head of a Statutory Agency and can employ Australian Public Sector employees on behalf of the Commonwealth.  [Part 2, Division 6, clause 36]

1.47                In order to ensure clear lines of accountability between the Chair and staff, the Chair is not subject to direction by the Regulator in relation to his or her actions taken under the Public Service Act 1999 [Part 2, Division 9, clause 42]

1.48                The consequential amendments bill provides that staff transferred to the Regulator from the Department and the Office of the Renewable Energy Regulator will continue to be employed under the same terms and conditions as their previous employment (until the commencement of any new enterprise agreement entered into between the Chair and the staff of the Regulator).

Consultants

1.49                The Regulator also has the power to engage persons with suitable qualifications and experience as consultants.  [Part 2, Division 6, clause 38]

Other public sector employees

1.50                The Regulator may also be assisted by public sector officers and employees from the Australian, state and territory governments, where their services are made available.  [Part 2, Division 6, clause 37]

Planning obligations

1.51                The Regulator must prepare a corporate plan at least once in each 3 year period, which sets out the objectives of the Regulator and the strategies and policies that are to be followed to achieve those objectives.  [Part 2, Division 7, clause 39(1)-(3)]

1.52                In addition to these general requirements, the corporate plan must also include details on any other matter that the Minister requires.  [Part 2, Division 7, clause 39(3)(c)]

1.53                However, there is no requirement for the Minister to amend or approve the corporate plan. 

1.54                Once a corporate plan has been prepared, the Chair must keep the Minister informed as to changes to the plan and matters that might significantly affect the achievement of the objectives set out in the plan.  [Part 2, Division 7, clause 39(4)]

1.55                The Minister may give the Chair guidelines to use in preparing the Corporate Plan, or informing the Minister. [Part 2, Division 7, clause 39(5)] These guidelines are not legislative instruments. They are not of a legislative character and are therefore not within the meaning of section 5 of the Legislative Instruments Act 2003 .  The provision is included to indicate that an exemption from the Legislative Instruments Act 2003 is not sought or required. [Part 2, Division 7, clause 39(6)]

1.56                The first corporate plan must be prepared within 12 months after the commencement of proposed section 39 of the bill - in effect within 12 months of commencement of the substance of the main bill, which is on a day to be fixed by Proclamation.  [Part 2, Division 7, clause 39(7)]

Annual reports

1.57                The Regulator is required to prepare an annual report for each financial year, for presentation by the Minister to Parliament.  [Part 2, Division 7, clause 40(1)]

1.58                The annual report will set out

•        a description of the objectives of the Regulator

•        an assessment of the extent to which the Regulator’s operations during the year have achieved those objectives. 

[Part 2, Division 7, clause 40(2) and (3)]

1.59                The Regulator’s annual reports are in addition to reports under section 105 of Renewable Energy (Electricity) Act 2000 , which are provided on a calendar year basis [Part 2, Division 7, clause 40(4) and (5)]

1.60                The Regulator’s main annual report need only include a summary of the separate renewable energy annual report.  [Part 2, Division 7, clause 40(4) and (5)]

Release of information

1.61                Information obtained by the Regulator may be commercially sensitive.  For example, it could disclose the market share of a corporation, or details of its supply arrangements.  The bill seeks to ensure that information obtained by the Regulator is not disclosed unnecessarily or put to unauthorised use.  Personal information collected under Part 3 of the bill is subject to the Privacy Act 1988 . It should be noted that, under Information Privacy Principle 11.3, a person, body or agency to whom personal information is disclosed shall not use or disclose the information for a purpose other than the purpose for which the information was given to the person, body or agency.

Primary disclosure offence

1.62                It is an offence for a person who is, or has been an official of the Regulator to disclose or use ‘protected information’ - in broad terms, information obtained in an official capacity -  unless one of a number of exceptions apply.  The penalty for that offence is up to two years’ imprisonment or 120 penalty units (which currently equates to $13,200), or both.  [Part 3, clause 43] This penalty is the same as applies to a similar offence in secrecy provisions (section 23) of the National Greenhouse and Energy Reporting Act 2007 .

1.63                ‘Official of the Regulator’ is defined broadly to include not only Regulator members and staff, but also:

•        public sector employees (State or Commonwealth) whose services are made available to the Regulator in connection with the performance of its functions and

•        consultants engaged by the Regulator. 

[Part 1, clause 4 definition of ‘official of the regulator’]

Exceptions to primary disclosure offence

1.64                In broad terms, the exceptions - that is, the circumstances in which ‘protected information’ can be disclosed or used - are:

•        disclosure or use for the purposes of a ‘climate change law’ (for example, disclosure of greenhouse and energy information in accordance with section 26 of the National Greenhouse and Energy Reporting Act 2007 ) [Part 3, clause 44]

•        disclosure to the Minister, to a Minister administering a program or collecting statistics in relation to greenhouse gas emissions, energy consumption or energy production, or to a member of these Ministers’ staff [Part 3, clause 45]

•        disclosure to the Secretary of the Department (or person authorised by the Secretary), where the disclosure is for the purposes of advising the Minister, facilitating the monitoring of Australia’s compliance with relevant international obligations or facilitating the development of an international agreement that relates to climate change [Part 3, clause 46]

•        disclosure to the Secretary of a Department with a Minister administering a program or collecting statistics in relation to greenhouse gas emissions, energy consumption or energy production, or to persons authorised by that Secretary, where the disclosure is for purposes of advising that Minister, the administration of such a program, or the collection of such statistics [Part 3, clause 46]

•        disclosure to a Royal Commission [Part 3, clause 48]

•        disclosure to specified agencies, bodies and persons where the Chair of the Regulator is satisfied that the information will assist those agencies in carrying out their functions, including:

-       a range of specified Commonwealth agencies

-       certain specified bodies connected with the operation and oversight of the energy market

-       a State/Territory government body or foreign government body with a function which corresponds to a function of the Regulator (this will enable information exchange as part of possible future international linking arrangements for the carbon price mechanism, and release of greenhouse and energy data to State and Territory governments)

-       an international climate change body (this is intended to cover situations where information is provided in order to assist in meeting Australia’s international obligations. For example, NGER data would be provided to Expert Review Teams under the UNFCCC if they conduct independent verifications of Australia’s national greenhouse inventory) [Part 1, clause 4, definition of ‘international climate change body’]

-       prescribed professional disciplinary bodies [Part 3, clause 49]

•        disclosure to certain operators of financial markets and clearing and settlement facilities, where that body is specified in regulations and where the Chair of the Regulator is satisfied that the information will assist such bodies in carrying out their functions [Part 3, clause 50]

•        disclosure with the consent of the affected person [Part 3, clause 51]

•        disclosure to reduce threat to life or health [Part 3, clause 52]

•        disclosure where the material is already publicly available [Part 3, clause 53]

•        disclosure where the summaries of the information, or statistics derived from the information, are released and this release is not likely to enable the identification of a person [Part 3, clause 54]

•        disclosure where reasonable necessary for the enforcement of the criminal law, imposing a pecuniary penalty or the protecting of the public revenue.  [Part 3, clause 55]

1.65                To assist CFI methodology applicants and the government in continued methodology development and in improving accounting techniques, some protected information can be disclosed or used when seven years have passed since the information was provided to the Regulator.  This applies to information relating to offsets projects or methodologies which was provided when the application for a project declaration or a methodology determination was made.  The Regulator may disclose this information if the disclosure or use is to facilitate the development of methodology determinations.  [Schedule 3, clause 47(1) and (2)] However, this provision for disclosure does not apply to personal information within the meaning of the Privacy Act 1988.  [Schedule 3, clause 47(3)]

Evidential burden

1.66                In any prosecution, the defendant will have the evidential burden with respect to the exceptions outlined above.  [Part 3, clause 43(2)] This is justified because in many cases it is peculiarly within the defendant’s knowledge as to which of the exceptions, if any, apply.  The effect is that the defendant must adduce or point to evidence that suggests a reasonable possibility that one of the exceptions applies.  Once this is done, the prosecution must refute this beyond reasonable doubt to obtain a conviction.  (See Criminal Code , section 13.3). 

Secondary disclosure offences

1.67                The bill also contains measures to ensure that once protected information has been disclosed for one of the above reasons, further disclosures only take place to the extent necessary.

1.68                In most cases, the Chair of the Regulator may impose conditions in relation to protected information, and a person commits an offence if they engage in conduct in breach of a condition.  This offence is punishable by a penalty of up to two years’ imprisonment or 120 penalty units (currently $13,200), or both.  [Part 3, clause 50(3) and (4)]

1.69                A specific offence applies to professional disciplinary bodies, and members of professional disciplinary bodies, that improperly release protected information Where a professional disciplinary body, or a member of such a body, receives protected information from the Regulator it must only disclose or use that information, with the consent of the Regulator, for the purposes of taking disciplinary or other action, or deciding whether or not to take such action.  [Part 3, clause 50(6) and (7)]  

1.70                The defendant will have an evidential burden with respect to the question of whether the information was disclosed or used for the purposes of taking disciplinary or other action, or deciding whether or not to take such action.  Again, the justification is that these matters will be peculiarly within the defendant’s knowledge. 

1.71                Specific offences also apply to operators of prescribed financial markets and clearing and settlement facilities.  Conditions specified by the Chair may apply to the body itself and its officers, employees and agents.  It is an offence for any of those persons to breach the conditions.  This offence is punishable by a penalty of up to two years’ imprisonment or 120 penalty units (currently $13,200), or both.  Again, this penalty is consistent with the penalty applying to secrecy provisions of the National Greenhouse and Energy Reporting Act 2007 [Part 3, clause 50(6)]

1.72                The bill also creates a more general offence relating to prescribed operators of financial markets and clearing and settlement facilities.  If that body, or an officer, employee or agent of that body, uses or discloses protected information to another person, then they commit an offence unless:

•        the disclosure or use is with the consent of the Chair of the Regulator or

•        the disclosure or use is for the purpose of monitoring compliance with, enforcing, or performing functions or exercising powers under

-       the Corporations Act 2001

-       the business law of a State or Territory

-       the business law of a foreign country or

-       the operating rules (if any) of the body corporate.  [Part 3, clause 50(6) and (7)]

1.73                The defendant will have an evidential burden with respect to the question of whether one of the above exceptions applies.  The justification is that the purpose of the disclosure or use of the information will be peculiarly within the defendant’s knowledge.

1.74                The offences applying to operators of financial markets and clearing and settlement facilities are similar to those presently applying to those bodies under section 127 of the Australian Securities and Investment Commission Act 2001 .

Delegation by the Chair

1.75                The Chair may, by writing, delegate to another member of the Regulator the Chair’s functions or powers relating to disclosure of information, or part of those functions or powers.  [Part 3, clause 56]

Other matters

1.76                The bill applies to the Australian, state and territory governments.  [Part 1, clause 6]

1.77                The bill extends to all of Australia’s external territories, and to matters within Australia’s sovereign rights in the exclusive economic zone and continental shelf [2] . [Part 1, clause 7] [Part 1, clause 8]

1.78                As with clause 11 of the main bill, the bill extends to the Joint Petroleum Development Area as defined in the Petroleum (East Timor Sea) Treaty Act 2003 [Part 1, clause 4, definition of ‘Joint Petroleum Development Area’] [Part 1, clause 9]

1.79                The express application of the Act to the Joint Petroleum Development Area—an agreed joint development area under the Timor Sea Treaty [2003] ATS 13—is consistent with the obligations of Australia under article 4(1) of the Treaty between Australia and Timor-Leste on Certain Maritime Arrangements in the Timor Sea [2007] ATS 12.

1.80                The bill does not apply in a manner that is inconsistent with the exercise of rights of foreign ships to the territorial sea, exclusive economic zone or waters of the continental shelf in accordance with the United Nations Convention on the Law of the Sea.  [Part 1, clause 10] [Part 1, clause 4 definition of ‘United Nations Convention on the Law of the Sea’]

1.81                The bill contains a standard regulation-making power.  [Part 4, clause 57]

1.82                The short title of the bill is at clause 1, and a simplified outline of the bill is at clause 3.  [Part 1, clause 1] [Part 1, clause 3]

1.83               Definitions of words used in the bill are set out in clause 4.  [Part 1, clause 4]

Application and transitional provisions

1.84               The operative provisions of the bill come into effect at the same time as section 3 of the Clean Energy Act 2011, which is a single day to be fixed by Proclamation.  [Part 1, clause 2]

1.85               This is conditional on other bills essential to the operation of the Clean Energy Plan legislation also receiving Royal Assent: clause 2 of the main bill.

Consequential amendments

1.86               Consequential amendments, to absorb the current functions of the Renewable Energy Regulator and Greenhouse and Energy Data Officer into the Regulator and to amend the Carbon Farming Initiative, also come into effect at the same time as section 3 of the Clean Energy Act 2011: clause 2 of the main bill.

 

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Part 1:  Preliminary

Bill reference

Paragraph number

Clause 1

1.82

Clause 2

1.84

Clause 3

1.82

Clause 4 definition of ‘United Nations Convention on the Law of the Sea’

1.80

Clause 4 definition of ‘official of the regulator’

1.63

Clause 4, definition of ‘international climate change body’

1.64

Clause 4

1.83

Clause 4, definition of ‘Joint Petroleum Development Area’

1.78

Clause 5

1.35

Clause 6

1.76

Clause 7

1.77

Clause 8

1.77

Clause 9

1.78

Clause 10

1.80

Part 2:  Clean Energy Regulator

Bill reference

Paragraph number

Division 1, clause 11

1.16

Division 1, clause 12

1.21

Division 1, clause 13(1)

1.23

Division 1, clause 13(2)

1.24

Division 1, clause 13(3)

1.20

Division 1, clause 13(4)

1.20

Division 1, clause 13(5)

1.20

Division 1, clause 14

1.20

Division 1, clause 15

1.20

Division 2, clause 16

1.17

Division 2, clause 17

1.17, 1.27

Division 2, clause 18(1)

1.30

Division 2, clause 18(2)

1.30

Division 2, clause 18(3) and 18(4)

1.28

Division 2, clause 19

1.29

Division 2, clause 20

1.34, 1.35

Division 3, clause 21

1.36

Division 3, clause 22

1.44

Division 3, clause 23

1.44

Division 3, clause 24(1)

1.44

Division 3, clause 24(2)

1.44

Division 3, clause 25

1.37, 1.38

Division 3, clause 26

1.39

Division 3, clause 27

1.40

Division 3, clause 27(2)

1.45

Division 3, clause 28

1.41

Division 4, clause 29

1.43

Division 4, clause 30(1)

1.43

Division 4, clause 30(2)

1.43

Division 4, clause 31

1.43

Division 4, clause 32

1.43

Division 4, clause 33

1.42

Division 4, clause 34

1.43

Division 5, clause 35

1.26

Division 6, clause 36

1.46

Division 6, clause 37

1.50

Division 6, clause 38

1.49

Division 7, clause 39(1)-(3)

1.51

Division 7, clause 39(3)(c)

1.52

Division 7, clause 39(4)

1.54

Division 7, clause 39(7)

1.56

Division 7, clause 39(5)

1.55

Division 7, clause 39(6)

1.55

Division 7, clause 40(1)

1.57

Division 7, clause 40(2) and (3)

1.58

Division 7, clause 40(4) and (5)

1.59, 1.60

Division 8, clause 41

1.18, 1.19

Division 9, clause 42

1.47

Part 3:  Secrecy

Bill reference

Paragraph number

Clause 43

1.62

Clause 43(2)

1.66

Clause 44

1.64

Clause 45

1.64

Clause 46

1.64

Clause 47(1) and (2)

1.65

Clause 47(3)

1.65

Clause 48

1.64

Clause 49

1.64

Clause 50

1.64

Clause 50(3) and (4)

1.68

Clause 50(6)

1.71

Clause 50(6) and (7)

1.69, 1.72

Clause 51

1.64

Clause 52

1.64

Clause 53

1.64

Clause 54

1.64

Clause 55

1.64

Clause 56

1.75

Part 4:  Miscellaneous

Bill reference

Paragraph number

Clause 57

1.81

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[1] The Acts Interpretation Act 1901 was amended by the Acts Interpretation Amendment Act 2011 to insert new section 33AB. Section 33AB applies to acting appointments and provides that irregularities or defects in an appointment do not invalidate the past acts of the appointee, even if those irregularities or defects could be such as to invalidate the appointment. The bill will commence after the Acts Interpretation Amendment Act 2011

[2] The Acts Interpretation Act 1901 was amended by the Acts Interpretation Amendment Act 2011 to define the terms ‘continental shelf’, ‘exclusive economic zone’ and ‘territorial sea’ in section 2B by reference to the Seas and Submerged Lands Act 1973 .  The bill will commence after the Acts Interpretation Amendment Act 2011 .