2022 - 2023

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

NATURE REPAIR MARKET BILL 2023

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

(Circulated by the authority of the Minister for the Environment and Water,

the Hon Tanya Plibersek MP)

 

NATURE REPAIR MARKET BILL 2023

GENERAL OUTLINE

The Nature Repair Market Bill 2023 (the Bill) would provide a framework for a voluntary national market that delivers improved biodiversity outcomes. Eligible landholders who undertake projects that enhance or protect biodiversity would be able to receive a tradeable certificate that will be tracked through a national register. This framework would facilitate private investment in biodiversity, including where carbon storage projects have biodiversity co-benefits.

 

The nature repair market would be based on science and enable Aboriginal persons and Torres Strait Islanders to promote their unique knowledge, on their terms. Establishing the market in legislation would ensure its ongoing integrity, encourage investment in nature, and drive environmental improvements across Australia.

 

To make it easier for landholders to undertake projects that deliver both carbon and biodiversity benefits, the Bill has similarities with the Carbon Credits (Carbon Farming Initiative) Act 2011 (CFI Act). Alignment between the carbon and nature markets will help ensure investments in land sector carbon projects deliver biodiversity co-benefits.

 

The Bill would:

 

·          promote investment in long-term repair and protection of biodiversity in native species in Australia, including its external territories on land or waters;

 

·          create a nationally consistent framework to describe and measure biodiversity outcomes;

 

·          enable biodiversity certificates describing biodiversity projects to be purchased, transferred, claimed, used and publicly tracked. Under the framework each project would be awarded one certificate. Consistent verifiable publicly available information on projects and certificates would allow purchasers to make informed decisions;

 

·          require project proponents to monitor and report on their project including the biodiversity outcomes;  

 

·          encourage participation in the market by all persons, including Aboriginal persons and Torres Strait Islanders;

 

·          provide requirements to obtain consent from native title holders to carry out biodiversity projects under the Bill on such areas (land or waters). This would ensure that native title holders have the final say on whether, and what kind of, biodiversity projects are carried out on or in native title areas. It would promote the engagement and cooperation of Aboriginal persons and Torres Strait Islanders in the enhancement or protection of biodiversity in native species in Australia;

 

·          establish project assurance and compliance systems to provide certainty to the market. This would include providing appropriate and effective integrity measures that would ensure that the scheme under the Bill only rewards genuine and verifiable biodiversity protection or enhancement (including by requiring additionality) - so that certificates are only issued for biodiversity protection or enhancement that would not normally have occurred and, therefore, provide a genuine environmental benefit;

 

·          establish the Nature Repair Market Committee, which would consist of independent experts to, among other functions, advise and provide recommendations to the Minister on the development of methodology determinations (methods). Methods would set requirements on how registered biodiversity projects are to be carried out. This would include requirements relating to activities to be carried out in the project area, and conditions to be met for a biodiversity certificate to be issued. The Minister would only be able to make or vary a method if the Committee has first advised that the proposed method (or variation) complies with the biodiversity integrity standards and the Minister is also satisfied the method meets the standards.

 

·          establish a public register of all registered biodiversity projects and certificates to allow for tracking of project progress and citizen oversight.

 

The Bill would establish a flexible framework to allow for market innovation and enable new issues to be addressed as the market evolves. It would allow all landholders to participate, including Aboriginal persons and Torres Strait Islanders, and would enable certificates to be issued for a wide range of project types. This would recognise that landholders have different circumstances, interests and aspirations, and would encourage participation and increase supply.

 

The framework would enable certification of a wide range of project types. Projects could involve replanting or nature restoration that increases carbon storage and improves biodiversity. Projects could also involve the management of existing vegetation to improve habitat condition or outcomes for native species. This flexibility would allow the market to meet buyers’ different needs. Demand for nature repair projects is evolving and growing rapidly. Buyers are expecting to be able to invest in nature to achieve philanthropic objectives, meet their social and environmental responsibilities, compensate for their impacts on nature and manage risks associated with their dependencies on nature.

 

The Bill would allow elements of the scheme, such as the information on biodiversity certificates and the different methods for undertaking projects, to be detailed in subordinate legislation. Legislative instruments for these purposes would be made by the Minister, informed by close consultation with stakeholders and across government. It is intended that project methods would be co-designed with stakeholders, including Aboriginal persons and Torres Strait Islanders. The Minister would be responsible for making, varying or revoking methods, appointing Committee members and making rules to support the administration of the scheme.

 

The Bill would be primarily administered by the Clean Energy Regulator (the Regulator). This would include registering projects, issuing certificates, maintaining the public register of projects, undertaking compliance and enforcement, and providing oversight of the market. This would ensure that the regulatory oversight of the CFI and the nature repair market schemes is consistent and as streamlined as possible for landholders.

 

Methodology determinations

 

The Minister would be able to make methodology determinations (methods), which set out requirements for undertaking a kind of biodiversity project. Examples could include enhancing remnant vegetation and creating habitat for specific species.

 

A method would include, among other matters:

 

·          the conditions that must be met for a project covered by the determination to be registered and for a biodiversity certificate to be issued in respect of the project;

 

·          the activities that are to be carried out or that are not to be carried out for the purposes of the project;

 

·          information on how the activity period for the project (if any) and the permanence period for the project will be worked out. The permanence period would cover the life of the project. A project would have either a 25-year or 100-year permanence period unless a different period is provided for in the applicable method;

 

·          conditions and requirements relating to the measurement and assessment of the protection or enhancement of biodiversity.

 

A method could also impose requirements relating to reporting, notification, record-keeping or project monitoring, as well as prohibiting specified activities.

 

Methods would be required to be consistent with the biodiversity integrity standards in the Bill. The Minister would only be able to make or vary a method if the Nature Repair Market Committee has provided advice that they consider the method (or method as varied) complies with the biodiversity integrity standards, and if the Minister has also satisfied themselves of the same.

 

The Committee’s advice and the reasons for the Minister’s decision would be published on the Department’s website, following mandatory public consultation on the proposed method or method variation.

 

The Bill would allow the Committee to provide advice to the Minister on the prioritisation of method development. It is intended that prioritisation would be informed by such factors as demand from industry and the Government’s environmental targets and priorities.

 

 

Participation

 

All persons, including Aboriginal persons and Torres Strait Islanders, conservation groups, corporations, governments and landholders (including farmers) would be able to participate in the market.

 

Registration of biodiversity projects

 

The Regulator would be able to approve the registration of a biodiversity project. The Regulator would need to be satisfied of specified criteria, including the project being covered by a method specified in the application, that carrying out the project is likely to result in a biodiversity certificate being issued, and that any consents required prior to registration have been obtained. Where the applicable method requires a project plan to be submitted, the Regulator would need to be satisfied that there is a project plan, and that implementation of that project plan is likely to result in a biodiversity certificate being issued for the project.

Biodiversity projects would be able to be carried out on Torrens system land, Crown land or in relevant Australian waters (both onshore and offshore). This includes lakes and rivers, as well as marine and coastal environments. It also includes areas of land or waters that are exclusive possession or non-exclusive possession native title areas.

 

Where the project area is or includes an exclusive possession native title area, the project proponent would generally be the registered native title body corporate for that native title area. However, the registered native title body corporate would be able to consent to another person being the project proponent and carrying out the project in or on the native title area. In these circumstances, consent from the registered native title body corporate (either to the project’s registration or to the project being carried out) would need to be obtained prior to registration of the project. If the registered native title body corporate chooses, at the pre-registration stage, to only consent to project’s registration, further consent from that registered native title body corporate to the project proponent carrying out the project would be required before a biodiversity certificate could be issued for the project.

 

The Bill would allow legislative rules to define “excluded biodiversity projects”, which would be projects that could not be registered. Excluded biodiversity projects would cover projects that have a material risk of a material adverse impact on availability of water, other biodiversity, environmental matters, employment, the local community or Aboriginal persons or Torres Strait Islander community or land access for agricultural production.

 

The registration of a biodiversity project could be varied or cancelled in certain circumstances. These include the project not commencing within five years or the Regulator being satisfied that the project is unlikely to result in the issuing of a biodiversity certificate.

 

The Bill would provide for a mandatory permanence period of 25 or 100 years unless the method allows for a different permanence period. The permanence period would be the total duration of the project and would be published on the public register. The activity period would cover the period of active management to achieve the projected biodiversity outcome. The permanence period may be longer than the activity period. For example, a project may have a 100-year permanence period but provide for active management for 25 years.  Methods would define the requirements for the permanence period as well as the activity period.

 

Biodiversity certificates

 

The Bill would establish biodiversity certificates that are a form of tradeable personal property. When a project is registered and has met any conditions and requirements, including those stipulated under the method, the project proponent would be able to apply to the Regulator for the issue of a biodiversity certificate. The biodiversity certificate would be personal property. It would enable biodiversity outcomes to be owned and traded separately from the underlying land. A biodiversity certificate would remain valid for the life of the project, unless relinquished or cancelled.

 

The Regulator would be able to issue a biodiversity certificate for a registered biodiversity project, subject to the applicant and the project meeting certain requirements. These requirements include the proponent being a fit and proper person, and that the project is sufficiently progressed to have resulted in, or be likely to result in, the biodiversity outcome for the project. The powers of the Regulator and requirements set out in the Bill are designed to ensure that biodiversity certificates have integrity and accurately reflect the environmental improvements achieved by the project. This would enable buyers to invest in the market with confidence.

 

The holder of the biodiversity certificate would be the legal owner of the certificate. Biodiversity certificates would be personal property and transmissible by assignment, by will and by devolution by operation of law. Biodiversity certificates would be able to be deposited with the Regulator in circumstances where the project proponent wishes to reflect an ongoing commitment to a project, including where other statutory requirements apply.

 

While biodiversity certificates would not be divisible, there would be provisions for allowing defining of equitable interests in a certificate.

 

Biodiversity certificates would generally be purchased by private investors but would also be able to be purchased by the Commonwealth. The Bill would empower the Secretary to enter into biodiversity conservation contracts for the purchase of a biodiversity certificates on behalf of the Commonwealth. The Bill would set out the biodiversity conservation purchasing processes (such as tender processes), which are to be conducted by the Secretary. Where the Commonwealth Procurement Rules are not applied, the Bill includes principles and other matters (such as value for money, the extent and quality and importance of biodiversity conservation that is likely to be achieved, the integrity of the process) that would need to be applied when conducting purchasing processes.

 

Project reporting

 

Project proponents will be required to report on their projects at least every five years but would be able to choose to report more frequently once a certificate is issued. Reports may also be required before a certificate is issued under requirements in the method or rules. The legislative rules or methods would set out the requirements for project reports. It is anticipated that reports would be required to include information about the activities undertaken as well as the improvements in biodiversity achieve as a result of these activities.

 

Depending on the method, it is anticipated that some project reporting requirement could allow for the description of biodiversity outcomes in units, for example units that represent an amount of habitat improvement. It is also anticipated that reports publicly available via the project register. Contracts between buyers and sellers can structure payments over the life of a project (typically with some upfront payments to establish the project and periodic payments for project outcomes over time). 

 

Register

 

To ensure transparency, accountability and that information is publicly available, a public register (to be named the Biodiversity Market Register) would be established under the Bill. The register would be maintained by the Regulator. It would track biodiversity projects and the issuance, ownership, transfer, relinquishment and cancellation of biodiversity certificates.

 

Legislative rules would be able specify additional information that must be listed on the register. This could enable the register to show whether projects have been used for regulatory purposes, to compensate for development impacts. Transparency about the ownership and use of biodiversity certificates would promote public confidence in the scheme and enable assessment of the overall contribution of the scheme to nature repair. Information on the register would also allow buyers to assess and value biodiversity certificates.

 

To support the development of the market and reduce the risk of greenwashing, it is intended that the Government would establish guidance on the claims that would be able to be made in relation to biodiversity certificates. Buyers who misrepresent or make false or misleading claims about their contribution to nature repair may be liable under Australian consumer law.

  

Compliance and enforcement

 

The assurance and compliance requirements in the Bill would ensure the integrity of environmental outcomes. This includes requirements for a project proponent to provide reports about the biodiversity project. The Regulator would have the power to audit projects and require third-party audits to be commissioned by a project proponent. The Bill would also provide for project proponents to enter into alternative assurance agreements to verify the progress of a project through mechanisms other than an audit. This could enable, for instance, assurance to be conducted by new and evolving monitoring technologies where appropriate without compromising biodiversity or other environmental standards.

 

The Regulator would also be empowered with information-gathering powers to monitor general compliance or undertake more specific investigations into suspected breaches. Project proponents would be subject to record-keeping and project monitoring requirements.

 

Assurance and enforcement processes would be managed by the Regulator throughout the project. To deter conduct that would reduce confidence in the market, and to ensure effective enforcement, the Bill would provide for a range of powers that can be exercised by authorised officers, including those triggered under the Regulatory Powers (Standard Provisions) Act 2014 . Regulatory powers include monitoring, investigation, civil penalties, infringement notices, enforceable undertakings, and injunctions. The Bill allows for cancellation of biodiversity projects and relinquishment of certificates in response to specific circumstances of non-compliance.

 

The Regulator would be able to make a biodiversity maintenance declaration in relation to a specified area of land (known as a biodiversity maintenance area) where there has been non-compliance or likely non-compliance with a relinquishment notice given by the Regulator. 

 

The Bill would require the Regulator to publish information on the scheme and projects through the register and other sources, including its website, to inform and engage stakeholders and facilitate the development of the market.

CONSULTATION

The Government consulted on the design of the nature repair market in October 2022. This included Minister led engagement events and over 50 discussions with individuals, organisations, Aboriginal persons and Torres Strait Islander groups and Commonwealth and State and Territory representatives. A request for submissions received over 200 responses.

An exposure draft of the Bill was released for public consultation on 23 December 2022, with consultation closing on 3 March 2023. During the consultation period the Department conducted over 60 engagement events including, Aboriginal persons and Torres Strait Islander focused sessions, public information sessions and targeted meetings with individuals, organisations and Commonwealth and State and Territory representatives. A request for submissions received over 180 responses.

FINANCIAL IMPACT STATEMENT

The initial estimate of the cost to taxpayers of drafting, consulting on, and delivering the market arrangements was $13.2m over two years from 2021-22 to 2022-23, although this is sensitive to the scope of the market which is currently the subject of public consultation.

Further costs of implementation will be subject to future appropriations and decisions of Government.

POLICY IMPACT ANALYSIS

The Policy Impact Analysis is attached to this explanatory memorandum ( Attachment B ).

 

 

 

 

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

The  Bill i s compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

The full statement of compatibility with human rights is attached to this explanatory memorandum ( Attachment A ).

 

 

NATURE REPAIR MARKET BILL 2023

NOTES ON CLAUSES

PART 1 - PRELIMINARY

GENERAL OUTLINE

1.         Part 1 would deal with how the Bill is to be cited (when enacted), when its provisions commence and the objects of the Bill. Part 1 would also set out the Bill’s application to the Crown and external Territories and contain a dictionary defining key terms used in the Bill. Part 1 would also deal with when there is a vacancy in the office of a Nature Repair Market Committee member and would define the phrase electronic notice transmitted to the Regulator.

NOTES ON INDIVIDUAL CLAUSES

Clause 1 - Short title

2.         Clause 1 would provide that the Bill, once enacted, may be cited as the Nature Repair Market Act 2023.

Clause 2 - Commencement

3.         The table in subclause 2(1) would have the effect that the whole of the Bill would commence on the day after the Bill receives the Royal Assent.

 

4.         Subclause 2(2) would clarify that any information in column 3 of the table in subclause 2(1) is not part of the Bill. Information may be inserted in this column, or edited in this column, in any published version of the Bill. For example, the date the Bill commenced will be inserted in this column once that has occurred.

Clause 3 - Objects of this Act

5.         Clause 3 would set out the objects of the Bill.

 

6.         The objects of the Bill would be:

 

·          to promote the enhancement or protection of biodiversity in native species in Australia;

 

·          to contribute to meeting Australia’s international obligations in relation to biodiversity;

 

·          to promote engagement and co-operation of market participants (including Aboriginal persons and Torres Strait Islanders, governments, the community, landholders and private enterprise) in the enhancement or protection of biodiversity in native species in Australia;

 

·          to support and promote the unique role of Aboriginal persons and Torres Strait Islanders in enhancing and protecting biodiversity in native species in Australia; and

·          to enable the use of the knowledge of Aboriginal persons and Torres Strait Islanders related to biodiversity in native species in Australia, guided by the owners of that knowledge; and

 

·          to contribute to building a knowledge base and capacity related to the enhancement or protection of biodiversity in native species in Australia.

 

7.         The reference in the objects (and throughout the Bill) to biodiversity in native species is intended to include diversity within and between native species as well as diversity of ecosystems on which native species depend upon and inhabit. The purpose of referring to native species is to clarify that projects are not to be focused on the enhancement or protection of non-native species.

 

8.         The list of potential market participants would be examples only; the definition of eligible person in clause 7 would make it clear that all persons can participate in the scheme. Other market participants could potentially include non-government organisations, farmers, graziers, pastoralists and other primary producers, large and small businesses, and the wider community.

Clause 4 - Simplified outline of this Act

9.         Clause 4 would provide a simplified outline of the Bill. The simplified outline is included to assist readers to understand the legislative framework that will be established by the Bill. The outline is not intended to be comprehensive. It is intended that readers will rely on the substantive clauses of the Bill.

Clause 5 - Crown to be bound

10.     Subclause 5(1) would provide that the Bill binds the Crown in each of its capacities. This would mean that all Australian Governments would be required to comply with the provisions of the Bill.

 

11.     However, in line with usual practice, subclause 5(2) would make it clear that the Crown is not liable to a pecuniary penalty or to be prosecuted for an offence. The exception would be the civil penalty provisions in clause 150 (complying with a relinquishment notice) and clause 155 (carrying out declared prohibited activity in biodiversity maintenance area), which would apply to the Crown (subclause 5(4)). This is appropriate to ensure the objects of the Bill are able to be achieved.

 

12.     Subclause 5(3) would clarify that the protections in clause 5 do not extend to an authority of the Crown.

Clause 6 - Extension to external Territories

13.      Clause 6 would have the effect that the Bill would apply to all external Territories.

Clause 7 - Definitions

14.      Clause 7 would define key terms used in the Bill. This clause would also include some ‘signpost’ definitions that refer readers to the clauses of the Bill in which terms are substantively defined.       `

 

15.     Some key concepts in the Bill would be biodiversity , project , biodiversity project and registered biodiversity project . These concepts are important because they define the scope of the scheme established by the Bill; biodiversity certificates would only be able to be issued (under subclause 70(2)) in respect of a registered biodiversity project. Biodiversity would be defined to mean the variability among living organisms from all sources (including terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are part) and includes diversity within species and between species, and diversity of ecosystems. This is consistent with the Convention on Biological Diversity and is intended to include coral and other similar life forms.

 

16.     A project would be defined to include a set of activities. A biodiversity project would mean a project, carried out in a particular area, that is designed to enhance or protect biodiversity in native species (whether the effect on biodiversity occurs within or outside the area). The reference to biodiversity in native species is intended to include diversity within and between native species as well as diversity of ecosystems on which native species depend upon and inhabit. The purpose of referring to native species is to clarify that projects are not to be focused on the enhancement or protection of non-native species. Enhancement or protection may include, but would not be limited to, conservation, restoration, maintenance, threat abatement, fire management, weed management, pest management, regeneration, rehabilitation, remediation and habitat augmentation. Specific examples of potential biodiversity projects under the scheme would be reviving wetlands and mangroves, replanting koala habitat, reviving a nature corridor, planting native vegetation, restoring a damaged waterway, or managing pests and weeds.

 

17.     A registered biodiversity project would mean a biodiversity project that is registered on the Register (other than a former registered biodiversity project in relation to which information is set out in the Register under rules made for the purpose of subclause 162(5)).

 

18.     Additional concepts that are related to registered biodiversity projects would be biodiversity outcome and project plan . A biodiversity outcome , in relation to a biodiversity project, would mean the enhancement or protection of biodiversity that the project is designed to achieve. It is intended that biodiversity outcomes would be informed by science. Each project would have its own biodiversity outcome, depending on the purpose and design of the project, however the intent would need to be consistent with facilitating the improvement in native species and their associated ecosystems. A project plan , in relation to a biodiversity project, would mean a plan that sets out how the project is intended to be carried out and achieve its biodiversity outcome, that is consistent with the methodology determination that covers (or is proposed to cover) the project, that includes any information specified in the rules or the methodology determination that covers the project, and that complies with any requirements specified in the rules or the methodology determination that covers the project.

 

19.     The concepts of eligible person and project proponent are relevant to who carries out the project. An eligible person would be able to apply for approval to register a biodiversity project under the Bill. An eligible person would mean any of an individual, a body corporate, a trust, a corporation sole, a body politic or a local governing body. The project proponent , in relation to a registered biodiversity project, would mean the eligible person who is recorded in the Register as the project proponent or (where there are multiple project proponents for a project) each of the eligible persons who are recorded in the Register as a project proponent.  

 

20.     The concepts of area , project area , native title area , exclusive possession native title area , Torrens system land , Crown land , Australia and Australian waters would be relevant to where projects are carried out.

 

21.     A project area , in relation to a biodiversity project or a registered project under a related scheme, would mean the area, or areas, on or in which the project has been, is being or is to be carried out. An area would cover an area of land, an area of Australian waters or an area that is a combination of land and Australian waters. Australian waters would mean the territorial sea of Australia or of each external Territory, the waters of the sea on the landward side of the territorial sea of Australia or of each external territory, or inland waters. Australia , when used in the geographical sense, would include the external territories. This means the project area for a biodiversity project would be able to be located in or on mainland Australia or any of the external territories, in the inland waters of mainland Australia or any of the external territories, or offshore from mainland Australia or any of the external territories, up to 12 nautical miles from the low water mark.  

 

22.     A project area under the Bill may include a native title area (including an exclusive possession native title area ). Where this is the case, specific consent requirements would apply (see paragraph 15(6)(b) and clause 18A of the Bill). An area would be a native title area if there is an entry on the National Native Title Register specifying that native title exists in relation to the area. A native title area may be exclusive possession or non-exclusive possession - the consent requirement in paragraph 15(6)(b) and clause 18A would apply to both kinds of native title areas. However, additional requirements in the Bill would apply in relation to an exclusive possession native title area , which would be a native title area where the native title confers a right of exclusive possession over the area.

 

23.     A project area under the Bill would be required to be in or on at least one of Torrens system land , Crown land or Australian waters (see subclause 15(5)). Land would be Torrens system land if the title to the land is registered under a Torrens system of registration. Crown land would mean land that is the property of the Commonwealth, a State or a Territory or a Commonwealth, State or Territory statutory authority. Clause 7 would also clarify that, for the purposes of the definition of Crown land , it is immaterial whether the land is subject to a lease or a licence, whether the land is covered by a reservation, proclamation, dedication, condition, permission, or authority (made or conferred by the Commonwealth, the State or the Territory), whether the land is covered by the making, amendment or repeal of legislation of the Commonwealth, the State or the Territory under which the whole or a part of the land is to be used for a public purpose or public purposes, whether the land is held on trust for the benefit of another person, or whether the land is subject to native title.

 

24.     Another important term is the Regulator , who would administer the Bill. The Regulator would mean the Clean Energy Regulator, established by the Clean Energy Regulator Act 2011 (CER Act).

 

25.     Some important signpost definitions in clause 7 would be Register (which would mean the Biodiversity Market Register kept by the Regulator under subclause 161(1)), Nature Repair Market Committee (which would mean the committee established by clause 194), methodology determination (which would mean a determination under subclause 45(1)), relinquishment notice (which would mean a notice given by the Regulator under any of subclauses 144(2), 146(2), 147(2) and 147A(2)), and biodiversity integrity standards (which would be set out in clause 57).

 

26.     The holder of a biodiversity certificate would mean the person recorded in the Register as the holder of the certificate.

 

27.     References in the Bill to this Act would (except in relation to clauses 1, 2, 45 and 237) include the provisions of a legislative instrument made under the Bill, and sections 134.1, 134.2, 135.1, 135.2, 135.4, 136.1, 137.1 and 137.2 of Schedule 1 to the Criminal Code Act 1995 (the Criminal Code), in so far as those sections relate to the Bill or a legislative instrument made under the Bill.

Clause 8 - Vacancy in the office of a Nature Repair Market Committee member

28.     Clause 8 would clarify that, for the purposes of a reference in this Bill to a vacancy in the office of a Nature Repair Market Committee member, or a reference in the Acts Interpretation Act 1901 to a vacancy in the membership of a body, there are 4 offices of Nature Repair Market Committee member, in addition to the Chair.

 

29.     This means there would be one or more vacancies in the office of a Nature Repair Market Committee member whenever there are less than 4 appointed members in addition to the Chair.

Clause 9 - Electronic notice transmitted to the Regulator

30.     Clause 9 would clarify the meaning of the phrase electronic notice transmitted to the Regulator for the purposes of the Bill. This phrase is relevant to clause 152 of the Bill, which allows a person who is the holder of a biodiversity certificate to relinquish that certificate by electronic notice transmitted to the Regulator .

 

31.     The effect of clause 9 would be that such notices would need to be transmitted to the Regulator by means of electronic communication, in accordance with any particular information technology requirements required by the Regulator.

 

32.     The notice would also be required to comply with any rules made for the purpose of subclause 9(2). Subclause 9(2) would allow the rules to make provision for or in relation to the security and authenticity of notices transmitted to the Regulator by means of electronic communication. Without limiting the rules that could be made for the purposes of subclause 9(2), such rules would be able to deal with encryption and authentication of identity (subclauses 9(3) and (4)).

 

33.     It is appropriate for the requirements concerning electronic transmission of notices (including matters relating to the security and authenticity of such notices) to be prescribed in the rules, as technology and security-related threats are likely to change and evolve over time. Including these requirements in the rules would allow the Minister to quickly adapt to changes and emerging threats to ensure the integrity of this aspect of the regulatory regime.

 

34.     Subclause 9(5) would clarify that clause 9 does not, by implication, limit the regulations that may be made under the Electronic Transactions Act 1999 . This provision is included to remove any doubt concerning the scope of clause 9.

PART 2 - REGISTERED BIODIVERSITY PROJECTS

GENERAL OUTLINE

35.     Part 2 of the Bill would provide for the registration of biodiversity projects. A project proponent would be able to apply to the Regulator for the registration of a biodiversity project. The Regulator would need to be satisfied that certain requirements have been met before approving the registration of a biodiversity project, and the registration may be subject to certain conditions. This Part would also provide for the variation or cancellation of a biodiversity project’s registration. This Part would also provide for excluded biodiversity projects that are not eligible to be registered, and for the duration of the permanence period for a project.

NOTES ON INDIVIDUAL CLAUSES

Division 1 - Introduction

Clause 10 - Simplified outline of this Part

36.     Clause 10 would provide a simplified outline of Part 2 of the Bill. The outline is not intended to be comprehensive and has been included to assist readers to understand the substantive provisions of Part 2, rather than to replace these provisions. It is intended that readers will rely on the substantive clauses of Part 2.

Division 2 - Registration of biodiversity project

Clause 11 - Application for approval of registration of biodiversity project

37.     Clause 11 would provide for an eligible person to apply to the Regulator to approve the registration of a biodiversity project on the Register.

 

38.     The term eligible person would be defined in clause 7 of the Bill as covering an individual, a body corporate (including a registered native title body corporate), a trust, a corporation sole, a body politic and a local governing body. This means that land holders, including native title holders (both exclusive possession and non-exclusive possession), would be able to apply to register projects on their land. A person would also be able to apply to register a project on land that does not belong to them; however, in such circumstances, certain consents or approvals would be required to ensure that the applicant has the legal right to carry out the project (see clauses 15, 17, 18 and 18A).

 

39.     Clause 7 would also define the terms biodiversity and biodiversity project . Biodiversity would mean the variability among living organisms from all sources (including terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are part) and includes diversity without species and between species, and diversity of ecosystems. A biodiversity project would mean a project, carried out in a particular area, that is designed to enhance or protect biodiversity in native species (whether the effect on biodiversity occurs within or outside the area). As noted above, this could include projects for species, habitat or ecosystem management, restoration, regeneration, rehabilitation, remediation and habitat augmentation.

 

40.     The Register would be established by Part 15 of the Bill and would set out details of each registered biodiversity project.

 

41.     The first note following subclause 11(1) would explain that the applicant would be registered as the project proponent, or one of the project proponents, for the project. This would be a requirement of paragraph 15(4)(h) of the Bill (criteria for approval of registration).

 

42.     The second note following subclause 11(1) would explain that the Regulator’s functions would include providing advice and assistance in relation to the making of applications and would refer the reader to clause 219 of the Bill.

 

43.     Subclause 11(2) would have the effect of preventing any applications under clause 11 from being made until a day determined by the Minister by legislative instrument. Allowing the Minister to set the day on which applications open would ensure that there is sufficient time for the key implementation-related elements of the proposed scheme to be established before applications can be considered. This would include developing resources, systems and processes within the responsibility of the Regulator, the establishment of the Nature Repair Market Committee, the development of biodiversity assessment instruments (with which methodology determinations must comply) and methodology determinations (with which projects must comply), and the creation of information resources for scheme participants.    

Clause 12 - Form of application

44.     Clause 12 would set out the requirements of an application made under clause 11 for the Regulator to approve the registration of a biodiversity project.

 

45.     Subclause 12(1) would require an application made under clause 11 to be in writing and to be in a form approved, in writing, by the Regulator.

 

46.     Subclause 12(2) would set out what must be included in the application (in addition to any requirements in the approved form itself). An application would be required to:

 

·          specify the proposed project area. Clause 7 of the Bill would define project area , in relation to a biodiversity project, to mean the area, or areas, on or in which the project has been, is being, or is to be carried out;

 

·          if the applicant is not to be the only project proponent for the project - specify the eligible persons who are proposed to be the project proponents, along with the applicant;

 

·          specify the methodology determination that is proposed to cover the project;

 

·          specify the proposed activity period for the project (if any). The activity period is intended to cover the period that the proposed actions and activities that make up the project would be carried out, in order to achieve the intended biodiversity outcome. The length of the activity period would be required to be worked out in accordance with the methodology determination that covers the project;

 

·          specify the proposed permanence period for the project. The permanence period is intended to cover the life of the project. Where the project has an activity period, the permanence period would be made up of both the activity period and the period following the activity period that would generally consist of monitoring activities to continue protection of the relevant biodiversity and ensure that there is no significant reversal in biodiversity outcome, preventing or responding to negative outcomes, and meeting any requirements set out in the methodology.

 

                                                  i.       The applicant would be required to choose a 25-year or 100-year permanence period for the project, unless the applicable methodology determination provides for a different permanence period. Requirements about the length of permanence period (including the Regulator’s power to extend the length of the permanence period for a project) would be set out in clause 34 of the Bill;

 

·          include any other information required by the rules or the methodology determination that covers the project.

 

47.     Subclause 12(3) would set out the documents that would be required to accompany the application. An application under clause 11 would be required to be accompanied by:

 

·          a prescribed audit report prepared by a registered greenhouse and energy auditor - but only if required by the rules or the methodology determination that covers the project. The rules would set out the requirements of such a report (including the content). A registered greenhouse and energy auditor is appointed as such under the National Greenhouse and Energy Reporting Act 2007 (NGER Act);

 

·          if there are to be project proponents for the project other than the applicant - evidence that each project proponent consents to being a project proponent for the project. Such evidence may be in the form of a statutory declaration or other document signed by the proposed project proponent;

 

·          if a registered indigenous land use agreement is relevant to the Regulator’s decision on the application - a copy of the relevant parts of the agreement. Clause 7 of the Bill would define a registered indigenous land use agreement to mean an indigenous land use agreement the details of which are entered on the Register of Indigenous Land Use Agreements (within the meaning of the Native Title Act 1993 (Native Title Act));

 

·          a project plan for the project - but only if the methodology determination that covers the project requires that the project have a project plan.

 

                                                  i.       Clause 7 of the Bill would require a project plan , in relation to a biodiversity project, to set out how the project is intended to be carried out and how the project is intended to achieve the biodiversity outcome for the project. A project plan would also be required to be consistent with the methodology determination that covers the project, and include such information, and comply with such requirements, as are specified in the rules or the methodology determination.

 

                                                ii.       Project plans are an integrity measure, designed to allow a more accurate assessment by the Regulator of the appropriateness of a project, and therefore increase the likelihood that a biodiversity project will only be approved for registration if it is likely to achieve the relevant biodiversity outcome. Project plans would enable the requirements of, and options in, the methodology determination that covers the project to be tailored to regional and site-specific factors to ensure that management activities are appropriate and support adaptive management. The extent to which a project plan is implemented would also be relevant to the decision whether to issue a biodiversity certificate for the project (see clause 70);

 

·          any additional documents specified in either the rules or the methodology determination that covers the project;

 

·          the fee (if any) specified in the rules.

 

48.     Subclause 12(4) would have the effect that the approved application form would be able to require statements made in an application under clause 11 to be verified by statutory declaration.

 

49.     Subclause 12(5) would clarify that an application fee specified in the rules must not amount to taxation. This means that the amount of any fee specified for an application under clause 11 must approximately reflect the cost to the Regulator of assessing the application.

 

50.     Subclauses 12(6) and (7) provide an additional requirement for applications under clause 11 that are made:

 

·          by a person who is a native title holder for an exclusive possession native title area; and

 

·          where the proposed project area consists of, or includes, the exclusive possession native title area.

 

51.      In these circumstances, the applicant would be required to specify the registered native title body corporate for that native title area as a project proponent for the project (along with the applicant) - unless the registered native title body corporate does not consent to being a project proponent.

 

52.      In other words, where the exclusive possession native title holders are doing the project, the registered native title body corporate would generally be specified as a project proponent for the project. The purpose of this requirement is to avoid, where possible, having to apply the requirements of the Bill to the common law native title holders, which may be a large, imprecise and changing group of persons. Instead, the intention is that the registered native title body corporate would act on behalf of the native title owners for the purposes of the Bill.

 

53.     This would not, however, prevent another person (who is not the native title holder or the registered native title body corporate) from applying to register a project on a project area that consists of, or includes, an exclusive possession native title area - or from being specified as a project proponent for such a project. However, registering such a project would require the consent of the registered native title body corporate for the area (on behalf of the native title holders) (see clause 15).

Clause 13 - Further information

54.     Clause 13 would allow the Regulator by written notice, to require the person who has applied for approval of the registration of a biodiversity project (the applicant) to provide further information in connection with the application within a specified period. The period within which the information is required to be provided must be specified in the notice.

 

55.      Subclause 13(2) would make it clear that if the applicant does not provide the required further information in the period specified in the notice, the Regulator may refuse to consider, or to take any action or further action in relation to, the application.

 

56.     The purpose of this provision is to ensure that decisions on applications for approval of the registration of a biodiversity project are based on all relevant information.

Clause 14 - Withdrawal of application

57.     Clause 14 would clarify that an applicant is able to withdraw their application for approval of the registration of a biodiversity project at any time before the Regulator makes a decision on the application. If the applicant withdraws their application, they would still be able to make a fresh application at a later date.

 

58.     Subclause 14(3) would require the Regulator, on behalf of the Commonwealth, to refund any application fee the applicant has paid in respect of an application for approval of the registration of a biodiversity project that has been withdrawn.

 

59.     This provision is intended to recognise that it will normally be preferable for the Regulator to advise an applicant of substantive deficiencies in their application and allow them to withdraw and resubmit the application without cost, rather than rejecting the application for not meeting the legislative requirements.

Clause 15 - Approval of registration of biodiversity project

60.     Clause 15 would deal with the Regulator’s decision whether to approve the registration of a biodiversity project (on application by an eligible person under clause 11). A registered biodiversity project would be recorded in the Register (see part 15).

 

61.      Subclause 15(2) would require the Regulator, after considering an application made under clause 11, to decide whether to approve or refuse to approve the registration of the biodiversity project that is the subject of the application.

 

62.      A decision made under subclause 15(2) to approve, or refuse to approve, the registration of a biodiversity project would be a reviewable decision. The note following subclause 15(2) directs the reader to Part 20 of the Bill, which deals with reviewable decisions.

 

63.      Subclause 15(3) would require the Regulator to give written notice of a decision under subclause 15(2) to the applicant.

 

64.     The Regulator would also be required to give written notice of the decision to approve the project’s registration to the relevant land registration official. The relevant land registration official would be the Registrar of Titles or other proper officer of the State or Territory in which the project is wholly or partly situated (see clause 7). The purpose of requiring the Regulator to inform the relevant land registration official of the registration of the biodiversity project is so that the official would be able to place a notification on the relevant land title that would alert anyone taking an interest in the project land that it is subject to obligations under this Bill.

 

65.     Subclause 15(4) would set out the criteria of which the Regulator must be satisfied in order to approve the registration of a biodiversity project on the Register. The Regulator would only be able to approve the registration of a biodiversity process if satisfied that:

 

·          the project is being, or is to be, carried on in Australia. Clause 7 of the Bill would make it clear that Australia , when used in a geographical sense, includes the external territories. The term Australia would also include Australia’s coastal sea which, in turn, covers Australia’s territorial sea, the seabed and subsoil beneath it and the airspace over it (see definition of Australia in section 2B of the Acts Interpretation Act 1901 (AI Act);

 

                                                  i.       This means biodiversity projects located in mainland Australia, any of the external territories or in Australia’s coastal sea (or any combination thereof) can be registered for the purposes of the Bill, provided the project meets all other relevant requirements;

 

·          the project is covered by the methodology determination that is specified in the application;

 

·          the activity period for the project (if any) has been worked out in accordance with the applicable methodology determination;

 

·          the permanence period for the project complies with clause 34. This means the permanence period specified in the application must be either 25 years or 100 years, or another period worked out in accordance with the methodology determination that covers the project;

 

·          the project meets any conditions set out in the methodology determination that covers the project;

 

·          if the applicable methodology determination requires a project plan for the project - there is a project plan for the project, and that implementation of the project plan is likely to result in a biodiversity certificate being issued in respect of the project;

 

                                                  i.       this criterion is a key integrity measure for projects that require a project plan, as it would ensure that projects are only registered if they are likely to result in a biodiversity certificate;

 

                                                ii.       to issue a biodiversity certificate in respect of a project, the Regulator would need to be satisfied that the project is sufficiently progressed to have resulted in, or be likely to result in, the biodiversity outcome for the project (and all other relevant requirements are met) (see paragraph 70(2)(f));  

 

·          if the applicable methodology determination does not require a project plan for the project - carrying out the project is likely to result in a biodiversity certificate being issued in respect of the project;

 

                                                  i.       this criterion is a key integrity measure for projects that do not require a project plan. Similar to the equivalent requirement for projects that require a project plan, this criterion would ensure that projects are only registered if they are likely to result in a biodiversity certificate;

 

·          the applicant is to be registered as the project proponent (or as one of the project proponents) for the project. The purpose of this requirement is to ensure that the applicant is responsible for meeting the requirements of the Bill for the project on an ongoing basis;

 

·          the proposed project proponent (or, in the case of multiple project proponents, that each of the proposed project proponents) is an eligible person. The term eligible person would be defined in clause 7 of the Bill as covering an individual, a body corporate (including a registered native title body corporate), a trust, a corporation sole, a body politic or a local governing body;

 

·          the proposed project proponent (or, in the case of multiple project proponents, that each of the proposed project proponents) is a fit and proper person. The fit and proper person test would be set out in Part 8 of the Bill;

 

·          the project area meets the requirements set out in subclause 15(5). These requirements are described below in detail;

 

·          the project area does not consist of, or include, a biodiversity maintenance area or part of a biodiversity maintenance area. A biodiversity maintenance area is an area over which a biodiversity maintenance declaration (under clause 154) is in effect;

 

·          the project area meets the requirements set out in subclause 15(6). These requirements are set out below in detail;

 

·          the project meets any additional eligibility criteria prescribed in the rules. It is appropriate that the rules be able to prescribe additional eligibility criteria to allow the scheme to tailor the criteria to different kinds of projects (where appropriate) and to be able to respond to changing circumstances (including technological advances and changes in the environment);

 

·          the project is not an excluded biodiversity project. Clause 33 of the Bill would provide for the rules to prescribe kinds of biodiversity projects that are excluded biodiversity projects and therefore cannot be registered.

 

66.     The first note following subclause 15(4) would explain that methodology determinations are made under clause 45 of the Bill. The second note following subclause 15(4) would direct the reader to clause 33 of the Bill for the meaning of excluded biodiversity projects . The third note following subclause 15(4) would direct the reader to clauses 97-99A for the fit and proper person test.

 

67.     Subclause 15(5) would require the project area for a registered biodiversity project to be (or to be any combination of) Torrens system land, Crown land or Australian waters, and to not be excluded by rules made for the purposes of that provision. Under clause 7, land would be Torrens system land if the title to the land is registered under a Torrens system of registration. Clause 7 would also define Crown land as land that is the property of the Commonwealth, a State or a Territory, or of a statutory authority of the Commonwealth, a State or a Territory.

 

68.     The purpose of limiting the eligible land to Torrens system land and Crown land is to ensure that ownership of the land on which the project is situated is clear, unambiguous and can be tracked easily. Similarly, notations would be able to be made on the relevant land title so that persons with future interests in the land are aware of the project and any obligations it confers on the land holder.

 

69.     Native title land will generally be either Crown land or Torrens system land. In addition, most categories of land rights land will be either Crown land or Torrens system land. Accordingly, biodiversity projects that are located on native title land (both exclusive possession and non-exclusive possession) or most kinds of land rights land would be able to be registered for the purposes of the Bill. Persons who wish to register a project on land that is not Torrens System land or Crown land (such as old system title and some kinds of land rights land) would be able to register their land under the Torrens system of the relevant State or Territory in which the land is situated. Once registered as Torrens system land, projects on that land would be able to be registered under the Bill.

 

70.     Clause 7 of the Bill would also define the term Australian waters to cover the territorial sea of Australia and of each external territory, the waters on the landward side of the territorial sea of Australia and of each external territory, and inland waters (including lakes, rivers, ponds, estuaries). It is intended that marine biodiversity projects in any of these kinds of waters (including waters that are part of a native title area) would be able to be registered for the purposes of the Bill.

 

71.     Subclause 15(6) would impose additional requirements that must be satisfied before the Regulator can approve the registration of certain biodiversity projects. These requirements are directed at ensuring that the project proponent has the legal right to carry out the project (subject to obtaining necessary Commonwealth, State or Territory regulatory approvals), by requiring consent to do so from the owner or holder of the relevant land.

 

72.     Paragraph 15(6)(a) deals with Torrens system land. The Regulator would only be able to approve the registration of a biodiversity project located on Torrens system land if one of the following criteria is met:

 

·          the project proponent (or, in the case of multiple project proponents, a project proponent) holds an estate in fee simple in the land (ie the proponent owns the relevant land, whether or not that ownership is subject to a mortgage);

 

·          the project proponent (or, in the case of multiple project proponents, a project proponent) holds a lease over the relevant land and the lease is consistent with the project being carried out on the land;

 

·          a person who holds an estate in fee simple in the land has consented to the project being carried out on the land by the proposed project proponent as a registered biodiversity project;

 

·          the project proponent (or, in the case of multiple project proponents, a project proponent) holds another legal estate or interest in the land that is prescribed by the rules;

 

·          a person who holds another legal estate or interest in the land that is prescribed by the rules has consented to the project being carried out on the land by the proposed project proponent as a registered biodiversity project.

 

73.     This would allow the Minister to, in appropriate circumstances, require the consent of other (additional) eligible interest holders prior to registration, including persons with certain indigenous-related legal interests (other than native title rights, which would be covered by paragraph 15(6)(b)).

 

74.     The purpose of these requirements is to ensure that the owner of the relevant Torrens system land either is the project proponent, or has consented to the project being carried out on their land as a registered biodiversity project. This would prevent projects being registered on a person’s land without their knowledge or consent, which could undermine the emerging market.

 

75.     Paragraph 15(6)(b) would impose a similar consent requirement for projects that have a project area consisting of, or including, a native title area. Clause 7 of the Bill would define an area to be a native title area if there is an entry on the National Native Title Register (within the meaning of the Native Title Act) specifying that native title exists in relation to the area.

 

76.     Under paragraph 15(6)(b), the Regulator would only be able to approve the registration of a biodiversity project that is situated on, or that includes, a native title area, and where there is a registered native title body corporate for the native title area, if one of the following criteria is met:

 

·          the project proponent (or, in the case of multiple project proponents, a project proponent) is the registered native title body corporate; or

 

·          the registered native title body corporate has consented to the proposed project proponent carrying out the project on or in the native title area as a registered biodiversity project; or

 

·          the registered native title body corporate has consented to the registration of the project.

 

77.     The requirement at paragraph 15(6)(b) would apply to both exclusive possession native title areas and non-exclusive possession native title areas. In practice, this means that all biodiversity projects to be carried out on native title land or waters would need either to be undertaken by the relevant native title holders, or would require the consent of the relevant native title holders before the project could be registered. This would ensure that native title holders have the final say on whether, and what kind of, biodiversity projects are carried out on or in native title areas.

 

78.     The consent provided by the registered native title body corporate at this stage may be to the project proponent carrying out of the project as a registered biodiversity project, or just to the registration of the project. This would be up to the registered native title body corporate. If the registered native title body corporate consents, prior to registration, to the proponent carrying out the project as a registered biodiversity project, the project proponent would not be required to obtain any further consent from the registered native title body corporate. In contrast, if the registered native title body corporate only consents to the project being registered, the project’s registration would be subject to a condition that the project proponent obtain consent from the registered native title body corporate to the proponent carrying out the project as a registered biodiversity project prior to applying for a biodiversity certificate for the project (see clauses 18A and 67).

 

79.     Subclause 15(7) would set out the matters that must be included in the approval notice if the Regulator approves the registration of a biodiversity project. The approval notice would be required to:

 

·          set out, in accordance with the rules, the project area;

 

·          set out the project proponent or project proponents for the project;

 

·          set out the applicable methodology determination (that covers the project);

 

·          set out the activity period (if any) and the permanence period for the project;

 

·          set out any conditions under clauses 17, 18 or 18A (concerning, respectively, obtaining required regulatory approvals and consents) that the project’s registration is subject to;

 

·          set out such attributes of the project as are specified by the rules;

 

·          set out any other matters required by the rules.

 

80.     Subclause 15(8) would require the Regulator to take all reasonable steps to ensure that a decision is made on an application to register a biodiversity project within 90 days after the application is made, or 90 days after requested further information has been given to the Regulator.

 

81.     Subclause 15(9) would have the effect that the registration of a biodiversity project takes effect the day after the approval notice is given to the applicant.

Clause 16 - Suspension of processing of applications for registrations of biodiversity projects

82.     Clause 16 would allow the Minister to make a legislative instrument ordering the Regulator to cease considering (and not make a decision on) existing applications to register a biodiversity project for a specified period, where the project proposes to be covered by a specified methodology determination (subclause 16(1)). The period specified would need to be 12 months or less, commencing when the order commences (subclause 16(2)).

 

83.     However, the Minister would only be able to make a legislative instrument under clause 16 if the Nature Repair Market Committee has advised the Minister that the Committee is satisfied there is reasonable evidence that the methodology determination in question does not comply with one or more of the biodiversity integrity standards (subclause 16(3)). The biodiversity integrity standards would be set out in clause 57 of the Bill.

 

84.     This is an important integrity measure, as it would prevent the registration of projects that would be inconsistent with the biodiversity integrity standards. The biodiversity integrity standards would form an important test for methodology determinations, providing assurance to the market that methodology determinations would only provide for projects that deliver biodiversity outcomes, and that information about those outcomes could be relied upon by those who are purchasing biodiversity certificates. Where there is evidence that a particular methodology determination no longer meets the biodiversity integrity standards, allowing projects to continue to be registered in reliance on that determination would undermine the market and may also result in harm to the biodiversity that is intended to be protected or enhanced by the project. In such circumstances, it would be appropriate for the Minister to temporarily prevent the Regulator from continuing to assess applications against that methodology determination, until the methodology determination can be varied (to fix the relevant issue) or revoked (in accordance with the requirements at Part 4 of the Bill).

 

85.     The Nature Repair Market Committee would be able to give the Minister such advice on its own initiative, or at the Minister’s request (subclause 16(4)). Subclause 16(5) would require the Department to publish any such advice received on its website (whether or not the Minister follows the advice by making a legislative instrument under clause 16).

 

86.     Subclause 16(6) would clarify that the requirements in subdivisions D and E of Division 2 of Part 4 would not apply to the Committee’s advice for the purposes of clause 16. Subdivisions D and E would set requirements that must be complied with by the Committee when providing advice on the making, varying or revoking of methodology determinations (including public consultation). These requirements are not appropriate in the context of a legislative instrument made under clause 16, which is likely to be an interim measure while the methodology determination is either revoked or varied to address the issues in question.

 

87.     The Regulator would be required to comply with an order made in a legislative instrument under subclause 16(1) (subclause 16(7)). Where such an order is in effect, the timing requirements for making a decision on an application (set out in clause 15(8)) would not apply to applications that fall within the order.

Clause 17 - Registration may be subject to condition about obtaining regulatory approvals

88.     Clause 17 would apply if the Regulator decides to approve the registration of a biodiversity project but is not satisfied that all regulatory approvals have been obtained for the project.

 

89.      In these circumstances, the Regulator would be able to approve the registration of the biodiversity project, but would be required to impose a condition on the registration to the effect that a biodiversity certificate is not to be issued in respect of the project until all regulatory approvals are obtained for the project.

 

90.     This condition would be required to be set out in the approval notice given to the applicant under subclause 15(3) (see subclause 17(2)).

 

91.     This is intended to allow project proponents some certainty regarding the registration of their project, before going to the expense of obtaining the required regulatory approvals. It would also allow the proponent additional time to obtain regulatory approvals for the project, while informing potential purchasers of the fact that there are outstanding regulatory approvals needed for the project to be legally carried out. The outstanding regulatory approvals may be requirements under Commonwealth, State, Territory or local government laws in relation to, for example, land use and development, the environment or water. For example, a project (including a marine project) may require a licence or approval under state environmental laws before it can legally proceed. Required regulatory approvals may also include approvals associated with undertaking protects on public land (including Indigenous Protected Areas and areas in the reserve system).

 

92.     Once the necessary approvals have been obtained, the project proponent would be able to apply to the Regulator (under rules made for the purposes of clause 21) to vary the project’s registration to remove the condition, on the basis that the condition has been met.

 

93.     In contrast, if the project proponent does not obtain all necessary regulatory approvals within 5 years of the project’s registration, the Regulator may be able to unilaterally cancel the project’s registration, under rules made for the purpose of clause 26 (on the basis that a condition of registration has not been met) or, potentially, rules made for the purpose of clause 27 (on the basis that the project has not commenced). This would ensure that projects do not stay on the Register for many years without the necessary regulatory approvals being obtained.

Clause 18 - Registration may be subject to condition about obtaining consents from eligible interest holders

94.     Clause 18 would have the effect that the Regulator would be able to conditionally approve the registration of a biodiversity project under clause 15 even if satisfied that not all persons who are eligible interest holders for the project area (or a part of the project area) have yet consented to the application being made. Part 7 of the Bill would deal with who is an eligible interest holder for an area of land.

 

95.     In these circumstances, the Regulator would be required to impose a condition on the registration to the effect that a biodiversity certificate is not to be issued in respect of the project until the written consent of all eligible interest holders has been obtained. This condition would be required to be set out in the approval notice given to the applicant under subclause 15(3) (see subclause 18(2)).

 

96.     This means that, while the project is able to be registered without all eligible interest holder consents, it would not be eligible to progress to the biodiversity certificate stage (and thus enter the market) until all such consents have been obtained.

 

97.     Furthermore, rules made for the purposes of clause 26 of the Bill could allow the Regulator to unilaterally cancel the project’s registration if any outstanding eligible interest holder consents have not been obtained within five years after registration. These measures are intended to incentivise project proponents to take the necessary actions to obtain all required eligible interest consents as early as possible.

 

98.     Subclauses 18(3) to (5) would have the combined effect that the consent of an eligible interest holder would be required to be in a form approved, in writing, by the Regulator or, alternatively, to be set out in a registered indigenous land use agreement.

 

99.     The condition in clause 18 would not apply to consent from eligible interest holders who fall within subclause 15(6) of the Bill.

 

100.    Consent from persons covered by paragraph 15(6)(a) (such as owners of the project area) to the project being carried out on their land would need to be obtained prior to registration (and would include consent to the application for registration being made). This is to ensure that projects are not registered on land belonging to a person without their knowledge or consent.

 

101.    Consent from persons covered by paragraph 15(6)(b) (registered native title body corporates) would be covered by clause 18A of the Bill.

Clause 18A - Registration may be subject to condition about obtaining consent from registered native title body corporate

102.    Clause 18A would have the effect that the Regulator would be able to conditionally approve, under clause 15, the registration of a biodiversity project that is to be located (wholly or partly) on a native title area even if the registered native title body corporate for the native title area has not yet consented, in writing, to the project being carried out by the project proponent on or in the native title area as a registered biodiversity project.

 

103.    Under paragraph 15(6)(b), the registered native title body corporate may, prior to registration, consent to the proposed project proponent carrying out the project as a registered biodiversity project, or just consent to the registration of the project. This would be up to the registered native title body corporate. If written consent to the carrying out of the project is provided prior to registration, the project proponent would not be required to obtain any further consent from the registered native title body corporate - and clause 18A would not apply.

 

104.    In contrast, if the registered native title body corporate chooses to only consent, at the registration stage, to the project being registered, clause 18A would apply. In these circumstances clause 18A would allow the Regulator to approve the project’s registration subject to a condition to the effect that a biodiversity certificate is not to be issued in respect of the project until written consent is obtained from the registered native title body corporate to the project proponent carrying out the project in or on the native title area as a registered biodiversity project (see subclause 18A(2)).

 

105.    This means that, while the project is able to be registered without consent from the registered native title body corporate to the carrying out of the project, it would not be eligible to progress to the biodiversity certificate stage (and thus enter the market) until such consent has been obtained.

 

106.    Furthermore, rules made for the purposes of clause 26 of the Bill could allow the Regulator to unilaterally cancel the project’s registration if consent from the registered native title body corporate to the carrying out of the project has not been obtained within five years after registration. These measures are intended to incentivise project proponents to take the necessary actions to obtain all required consents as early as possible.

 

107.    Subclauses 18A(3) to (5) would have the combined effect that the consent of a registered native title body corporate would be required to be in a form approved, in writing, by the Regulator or, alternatively, to be set out in a registered indigenous land use agreement.

Division 3 - Variation of registration

Clause 19 - Voluntary variation of registration of biodiversity project - change in identity of project proponent

108.    Subclause 19(1) would allow the rules to make provision for and in relation to empowering the Regulator to vary the registration of a registered biodiversity project to change the identity of the project proponent (or proponents).

 

109.    Such a variation may be to add an additional eligible person as a project proponent for the project, or to remove a project proponent from the project (so long as they are not the only project proponent for the project).

 

110.    Rules made for the purposes of subclause 19(1) would only be able to empower the Regulator to vary the registration of a biodiversity project on application from the project proponent (or, in the case of multiple project proponents, a project proponent) (subclause 19(2)). In other words, rules made for the purposes of subclause 19(1) would not be able to empower the Regulator to unilaterally vary a project’s registration.

 

111.    The rules would also have to provide for the following additional requirements to be met:

 

·          if the proposed variation involves adding an eligible person to be a project proponent for the project - the Regulator would need to be satisfied that the person has consented (in writing) to be a project proponent for the project, and that the person is a fit and proper person (within the meaning of Part 8);

 

·          if a biodiversity certificate is in effect in relation to the biodiversity project and is held by a person who is not a project proponent for the project - the holder of the certificate would need to have been notified of the proposed variation and given the opportunity to provide submissions.

 

112.    Subclause 19(3) would allow rules made for the purpose of subclause 19(1) to empower the Regulator to require security be given to the Commonwealth in relation to the fulfilment of any requirements to relinquish biodiversity certificates that may be imposed under Part 13 in relation to the project. Security may be required even if the circumstances that may result in relinquishment do not exist at the time of the proposed variation. This is important, as it provides assurance to the Regulator, and the market more generally, that the new project proponent (or proponents) would be able to meet any future relinquishment requirements that may arise.

 

113.    The rules would also be able to provide a power for the Regulator to refuse an application unless the Regulator is satisfied that the remaining project proponents would have the capability and resources to carry out the project (subclause 19(4)).

 

114.    Biodiversity projects would typically operate for long periods, with most likely to provide for the protection or enhancement of biodiversity for 25 or 100 years. The purpose of this clause is to provide a mechanism for a project proponent to transfer their project to another eligible person, for example, if they sell land together with a registered biodiversity project - while maintaining appropriate safeguards to ensure the biodiversity outcome intended to be achieved by the project is protected.

 

115.    It is appropriate for the circumstances in which the Regulator may vary a project’s registration to change the identity of the project proponent to be set out in rules, as it may be necessary to tailor requirements and circumstances to different kinds of projects. However, the criteria set out at subclauses 19(2) to (4) would set appropriate parameters in the Bill that the Minister would need to comply with when making such rules. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

 

116.    The first note following subclause 19(1) would refer the reader to clause 22 of the Bill, which deals with the procedures for the voluntary variation of the registration of a biodiversity project.

 

117.    A decision under rules made for the purposes of subclause 19(1) to vary, or refuse to vary, a registered biodiversity project would be a reviewable decision. The second note following subclause 19(1) directs the reader to Part 20 of the Bill, which deals with reviewable decisions.

 

118.    The note following subclause 19(2) would refer the reader to the fit and proper person test in clauses 97 to 99A of the Bill.

 

Clause 20 - Voluntary variation of registration of biodiversity project - changes in project area etc.

119.    Subclause 20(1) would allow the rules to make provision for and in relation to empowering the Regulator to vary the registration of a registered biodiversity project in respect of the project area, the methodology determination that covers the project, the project’s activity period (if any) or the project’s permanence period.

 

120.    Where the proposed variation is to the methodology determination that covers the project, the rules would only be able to empower the Regulator to approve a variation where the methodology proposed to cover the project is in effect. This means that a project proponent would not be able to successfully apply for their project to be covered by a methodology determination that is still in development, or that has been revoked. Where a variation to change the methodology determination covering the project is approved, the new determination would apply to the project as it exists at the date the variation is approved (including any variations to the methodology determination that have come into effect by that date).

 

121.    Rules made for the purposes of subclause 20(1) would only be able to empower the Regulator to vary the registration of a biodiversity project on application from the project proponent (or, in the case of multiple project proponents, a project proponent) (subclause 20(3)). In other words, rules made for the purposes of subclause 20(1) would not be able to empower the Regulator to unilaterally vary a project’s registration.

 

122.    In addition, where a biodiversity certificate is in effect for the biodiversity project, and is held by a person who is not a project proponent for the project, rules made for the purposes of subclause 20(1) would only be able to empower the Regulator to vary the project’s registration if the holder of the certificate has consented (in writing) to the variation and the Regulator is satisfied that the variation would not result in a material change to the certificate (subclause 20(3)).

 

123.    The purpose of clause 20 is to provide a mechanism for project proponents to vary their projects as circumstances change. A project proponent may wish to vary their project to apply an updated or different methodology determination that provides, for example, more cost-effective methods of assessing changes in biodiversity or delivering biodiversity outcomes. Proponents may also want to incorporate new areas into their project or remove project areas, including when land is transferred or sold. Alternatively, new information about the biodiversity on the project area or how to manage it may become available, necessitating a change in the project.

 

124.    It is appropriate for the circumstances in which the Regulator may vary a project’s registration to be set out in rules, as it may be necessary to tailor requirements and circumstances to different kinds of projects. However, the criteria set out at subclauses 20(2) and (3) would set appropriate parameters in the Bill that the Minister would need to comply with when making such rules. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

 

125.    The first note following subclause 20(1) would refer the reader to clause 22 of the Bill, which deals with the procedures for the voluntary variation of the registration of a biodiversity project. The second note would also refer the reader to clause 34 of the Bill, which provides for the permanence period for a project.

 

126.    A decision under rules made for the purposes of subclause 20(1) to vary, or refuse to vary, a registered biodiversity project would be a reviewable decision. The third note following subclause 20(1) directs the reader to Part 20 of the Bill, which deals with reviewable decisions.

Clause 21 - Voluntary variation of conditional registration of biodiversity project - condition of registration has been met

127.    Subclause 21(1) would allow the rules to make provision for and in relation to empowering the Regulator to vary the registration of a registered biodiversity project to remove a condition of registration imposed under clause 17 (obtaining regulatory approvals), 18 (obtaining eligible interest holder consents) or 18A (obtaining consent from the registered native title body corporate to carrying out the project in or on a native title area). This is an important step in the process, as it would not be possible for a biodiversity certificate to be issued in respect of the project until any conditions on the project’s registration have been removed.

 

128.    Rules made for the purposes of subclause 21(1) would only be able to empower the Regulator to vary the registration of a biodiversity project on application from the project proponent (or, in the case of multiple project proponents, a project proponent) (subclause 21(2)). In other words, rules made for the purposes of subclause 21(1) would not be able to empower the Regulator to unilaterally vary a project’s registration.

 

129.    In addition, the rules would only be able to empower the Regulator to remove a condition of registration if the Regulator is satisfied that the condition has been met.

 

130.    It is appropriate for the circumstances in which the Regulator may vary a project’s registration to be set out in rules, as it may be necessary to tailor requirements and circumstances to different kinds of projects. However, the criteria set out at subclause 21(2) would set appropriate parameters in the Bill that the Minister would need to comply with when making such rules. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

 

131.    The first note following subclause 21(1) would refer the reader to clause 22 of the Bill, which deals with the procedures for the voluntary variation of the registration of a biodiversity project.

 

132.    A decision under rules made for the purposes of subclause 21(1) to vary, or refuse to vary, a registered biodiversity project would be a reviewable decision. The second note following subclause 21(1) directs the reader to Part 20 of the Bill, which deals with reviewable decisions.

 

Clause 22 - Procedures for voluntary variation of biodiversity project

133.    Subclause 22(1) would clarify that the rule-making powers in clauses 19, 20 and 21 (concerning voluntary variations of the registration of a biodiversity project) extend to allowing the rules to make provision for or in relation to the following procedural matters:

 

·          applications for variations under those rules and the approval by the Regulator of a form for such an application;

 

·          information or documents that would be required to accompany a variation application;

 

·          verification by statutory declaration of statements in a variation application;

 

·          consents that would be required to be obtained before making a variation application;

 

·          authorising a person to issue a certificate to certify a matter in relation to a variation application;

 

·          the fee (if any) that would be required to accompany a variation application;

 

·          empowering the Regulator to require a variation applicant to provide additional information in connection with their application, and to refuse to consider the application any further until that information is provided;

 

·          varying a biodiversity certificate issued in respect of a registered biodiversity project.

 

134.    Subclause 22(2) would clarify that clause 22 would not limit the rule-making power in any of subclauses 19(1), 20(1) or 21(1). 

 

135.    Subclause 22(3) would make it clear that any application fee charged for a voluntary variation to the registration of a biodiversity project under rules made for the purposes of subclauses 19(1), 20(1) or 21(1) must not be such as to amount to taxation.

 

136.    Subclauses 22(4) and (5) would provide additional notification requirements for rules made under any of subclauses 19(1), 20(1) or 21(1). Rules made for the purposes of any of these provisions would have to require the Regulator to give a copy of the variation to the applicant, the relevant land registration official (if any) and the holder of the certificate (where the holder is a different person to the project proponent) (subclause 22(4)). The rules would also have to require the Regulator to give written notice to the applicant of a decision to refuse to vary the registration of a registered biodiversity project (subclause 22(5)).

 

137.    It is appropriate for the procedural matters concerning the Regulator’s decision whether or not to vary a project’s registration to be set out in the rules, as it may be necessary to tailor requirements and circumstances to different kinds of projects. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

Division 4 - Cancellation of registration of biodiversity project

Subdivision A - Voluntary cancellation of registration of biodiversity project

Clause 23 - Voluntary cancellation of registration of biodiversity project - certificate in effect

138.    Subclause 23(1) would allow the rules to make provision for and in relation to empowering the Regulator to cancel the registration of a registered biodiversity project.

 

139.    Rules made for the purpose of subclause 23(1) would only be able to empower the Regulator to cancel the registration of a biodiversity project if the project proponent applies to the Regulator for the registration to be cancelled, and a biodiversity certificate has been issued in respect of the project (whether or not the original certificate is still in effect) (subclause 23(2)).

 

140.    In other words, rules made for the purpose of subclause 23(1) would deal with the voluntary cancellation of a project’s registration during the period after a biodiversity certificate is issued for the project.

 

141.    Paragraph 23(2)(c) would provide an additional requirement that rules made for the purposes of subclause 23(1) must satisfy. Rules made for the purposes of subclause 23(1) would only be able to empower the Regulator to cancel the registration of a biodiversity project on application if the original biodiversity certificates issued for the project have been relinquished in accordance with the Bill.

 

142.    It is appropriate that, following the issue of a biodiversity certificate for a project, the only time that the registration of that project can be voluntarily cancelled is where that certificate has been relinquished and is no longer in effect. This is because cancelling the registration of a biodiversity project for which a certificate has been issued, on application of the project proponent, may undermine confidence in the market and cause financial disadvantage, particularly if the certificate in question is held by a person other than the project proponent.

 

143.    If the project proponent is unable to relinquish the original biodiversity certificate issued for that project (because, for example, they have on sold it to another person who is unwilling or unable to sell it back to the project proponent), the project proponent would not be able to cancel the registration of the project under rules made for the purpose of subclause 23(1). There would be no ability to relinquish one or more equivalent biodiversity certificates in place of the original biodiversity certificate.

 

144.    The power in subclause 23(1) would include the power to make rules that make provision for or in relation to applications for cancellation of the registration of a biodiversity project, for the approval by the Regulator of a form for such an application, and other conditions that must be satisfied for the Regulator to cancel the registration (subclause 23(3)). However, this would not otherwise limit the scope of the power in subclause 23(1) (subclause 23(4)).

 

145.    It is appropriate for the circumstances in which the Regulator may cancel a project’s registration on application by the project proponent to be set out in rules, as it may be necessary to tailor requirements and circumstances to different kinds of projects. However, the criteria set out at subclauses 23(2) and (3) would set appropriate parameters in the Bill that the Minister would need to comply with when making such rules. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

Clause 24 - Voluntary cancellation of registration of biodiversity project - no certificate in effect

146.    Subclause 24(1) would allow the rules to make provision for and in relation to empowering the Regulator to cancel the registration of a registered biodiversity project.

 

147.    Rules made for the purpose of subclause 24(1) would only be able to empower the Regulator to cancel the registration of a biodiversity project if the project proponent applies to the Regulator for the registration to be cancelled, and no biodiversity certificate has been issued in respect of the project (subclause 24(2)).

 

148.    In other words, rules made for the purpose of subclause 24(1) would deal with the voluntary cancellation of a project’s registration during the period before a biodiversity certificate is issued for the project.

 

149.    The power in subclause 24(1) would include the power to make rules that make provision for or in relation to applications for cancellation of the registration of a biodiversity project, and for the approval by the Regulator of a form for such an application (subclause 24(3)). However, this would not otherwise limit the scope of the power in subclause 24(1) (subclause 24(4)).

 

150.    It is appropriate for the circumstances in which the Regulator may cancel a project’s registration on application by the project proponent to be set out in rules, as it may be necessary to tailor requirements and circumstances to different kinds of projects. However, the criteria set out at subclauses 24(2) and (3) would set appropriate parameters in the Bill that the Minister would need to comply with when making such rules. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

Clause 25 - Procedures for voluntary cancellation of registration of biodiversity project

151.    Subclause 25(1) would clarify that the rule-making powers in clauses 23 and 24 (concerning voluntary cancellation of the registration of a biodiversity project) extend to allowing the rules to make provision for or in relation to the following procedural matters:

 

·          applications for cancellation under those rules and the approval by the Regulator of a form for such an application;

 

·          information or documents that would be required to accompany an application for cancellation of a project’s registration;

 

·          verification by statutory declaration of statements in an application for cancellation of a project’s registration;

 

·          consents that would be required to be obtained before making an application for cancellation of a project’s registration;

 

·          authorising a person to issue a certificate to certify a matter in relation to an application for cancellation of a project’s registration;

 

·          the fee (if any) that would be required to accompany an application for cancellation of a project’s registration;

 

·          the withdrawal of an application for the cancellation of a project’s registration;

 

·          empowering the Regulator to require an applicant to provide additional information in connection with their application to cancel a project’s registration, and to refuse to consider the application any further until that information is provided.

 

152.    Subclause 25(2) would clarify that clause 25 would not limit the rule-making power in subclauses 23(1) or 24(1). 

 

153.    Subclause 25(3) would make it clear that any application fee charged for a voluntary cancellation of the registration of a biodiversity project under rules made for the purposes of subclauses 23(1) or 24(1) must not be such as to amount to taxation.

 

154.    Subclauses 25(4) and (5) would provide additional notification requirements for rules made under subclauses 23(1) or 24(1). Rules made for the purposes of any of these provisions would have to require the Regulator to give notice of the cancellation to the applicant, the relevant land registration official and the holder of the certificate (where the holder is a different person to the project proponent) (subclause 25(4)). The rule would also have to require the Regulator to give written notice to the applicant of a decision to refuse to cancel the registration of a registered biodiversity project (subclause 25(5)).

 

155.    It is appropriate for the procedural matters concerning the Regulator’s decision whether or not to cancel a project’s registration be set out in rules, as it may be necessary to tailor requirements and circumstances to different kinds of projects. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

Subdivision B - Unilateral cancellation of registration of biodiversity project

Clause 26 - Unilateral cancellation of registration of biodiversity project - condition of registration has not been met

156.    Subclause 26(1) would allow the rules to make provision for and in relation to empowering the Regulator to cancel the registration of a registered biodiversity project.

 

157.    Rules made for the purposes of subclause 26(1) would only be able to empower the Regulator to cancel the registration of a biodiversity project where the registration is subject to a condition mentioned in any of subclauses 17(2), 18(2) or 18A(2) and the Regulator is satisfied both that the condition has not been met and that at least 5 years have passed since the project was registered. The conditions mentioned in subclauses 17(2), 18(2) and 18A(2) are to obtain, respectively, required regulatory approvals or necessary consents (subclause 26(2)).

 

158.    In other words, rules made for the purposes of subclause 26(1) would deal with the unilateral cancellation of a project’s registration on a basis that a condition of registration had not been met.

 

159.    The purpose of these requirements is to ensure that, if the Regulator approves the registration of a biodiversity project for which not all required consents or regulatory approvals have been obtained, the project proponent would be obligated to take the means necessary to obtain such consents or approvals in the first five years of registration, or risk the project’s registration being cancelled. This would assist in ensuring that projects do not substantially progress without the required consents. Such rules would enable, for example, the Regulator to cancel a project in circumstances where an eligible interest holder or a registered native title body corporate does not consent to the project going ahead as a registered biodiversity project, or where the refusal of a necessary regulatory approval at Commonwealth, State or Territory level means the project cannot legally progress. This would also ensure that the Register only reflects projects which are legally able to go ahead. 

 

160.    Subclause 26(3) would provide that rules made for the purpose of subclause 26(1) would need to require the Regulator to consult with the project proponent for the project before deciding to cancel the registration. This would ensure that the principles of natural justice are complied with.

 

161.    It is appropriate for the circumstances in which the Regulator may unilaterally cancel a project’s registration to be set out in rules, as it may be necessary to tailor requirements and circumstances to different kinds of projects. However, the criteria set out at subclauses 26(2) and (3) would set appropriate parameters in the Bill that the Minister would need to comply with when making such rules. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

 

162.    A decision under rules made for the purposes of subclause 26(1) to cancel the registration of a registered biodiversity project would be a reviewable decision. The note following subclause 26(1) directs the reader to Part 20 of the Bill, which deals with reviewable decisions .

Clause 27 - Unilateral cancellation of registration of biodiversity project - project not commenced, or unlikely to result in issuing of biodiversity certificate

163.    Subclause 27(1) would allow the rules to make provision for and in relation to empowering the Regulator to cancel the registration of a registered biodiversity project.

 

164.    Rules made for the purposes of subclause 27(1) would only be able to empower the Regulator to cancel the registration of a biodiversity project where a biodiversity certificate has not yet been issued for the project and either:

 

·          5 years have passed since the project was first registered and the Regulator is not satisfied that the project has begun to be carried out; or

 

·          the Regulator is satisfied that the project is not being carried out; or

 

·          the Regulator is satisfied the project is unlikely to be carried out in a way that would result in a biodiversity certificate being issued (subclause 27(2)).

 

165.    In other words, rules made for the purposes of subclause 27(1) would deal with the unilateral cancellation of a project’s registration in circumstances where the project has not commenced or is not likely to result in a biodiversity certificate.

 

166.    The purpose of these requirements is to ensure that, if the Regulator approves the registration of a biodiversity project which is then not carried out, or not carried out in a way that is likely to result in a biodiversity certificate, the Regulator is able to cancel the project and remove it from the Register. This would incentivise project proponents for registered biodiversity projects to take the necessary actions to carry out their proposed project in a timely manner, so to ensure the intended biodiversity outcomes are met.

 

167.    This would also ensure that the Register only reflects projects which are, in practice, being carried out and likely to result in a biodiversity outcome. This is a key integrity measure for the Bill.

 

168.    Subclause 27(3) would provide that rules made for the purpose of subclause 27(1) would need to require the Regulator to consult with the project proponent for the project before deciding to cancel the registration. This would ensure that the principles of natural justice are complied with.

 

169.    It is appropriate for the circumstances in which the Regulator may unilaterally cancel a project’s registration to be set out in rules, as it may be necessary to tailor requirements and circumstances to different kinds of projects. However, the criteria set out at subclauses 27(2) and (3) would set appropriate parameters in the Bill that the Minister would need to comply with when making such rules. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

 

170.    A decision under rules made for the purposes of subclause 27(1) to cancel the registration of a registered biodiversity project would be a reviewable decision. The note following subclause 27(1) directs the reader to Part 20 of the Bill, which deals with reviewable decisions.

Clause 28 - Unilateral cancellation of registration of biodiversity project - eligibility requirements not met etc.

171.    Subclause 28(1) would allow the rules to make provision for and in relation to empowering the Regulator to cancel the registration of a registered biodiversity project.

 

172.    Rules made for the purposes of subclause 28(1) would only be able to empower the Regulator to cancel the registration of a biodiversity project where the project no longer meets a requirement that is set out in subclause 15(4) of the Bill and is specified in the rules (subclause 28(2)). Subclause 15(4) would set out the matters of which the Regulator must be satisfied in order to approve the registration of a biodiversity project.

 

173.    In other words, rules made for the purpose of subclause 28(1) would deal with the unilateral cancellation of a project’s registration on the basis that a specified eligibility criteria for registration is no longer met.

 

174.    The purpose of these requirements is to ensure that a biodiversity project does not meet the eligibility requirements in subclause 15(4) at the time of registration and then is later changed (post-registration) in a manner that means it no longer meets those requirements.  Such rules would also enable, for example, the Regulator to cancel projects in circumstances where the project becomes an excluded biodiversity project (within the meaning of clause 33). 

 

175.    Subclause 28(3) would provide that rules made for the purpose of subclause 28(1) would need to require the Regulator to consult with the project proponent for the project before deciding to cancel the registration. This would ensure that the principles of natural justice are complied with.

 

176.    It is appropriate for the circumstances in which the Regulator may unilaterally cancel a project’s registration to be set out in rules, as it may be necessary to tailor requirements and circumstances to different kinds of projects. However, the criteria set out at subclauses 28(2) and (3) would set appropriate parameters in the Bill that the Minister would need to comply with when making such rules. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

 

177.    A decision under rules made for the purposes of subclause 28(1) to cancel the registration of a registered biodiversity project would be a reviewable decision. The note following subclause 28(1) directs the reader to Part 20 of the Bill, which deals with reviewable decisions.

 

 

Clause 29 - Unilateral cancellation of registration of biodiversity project - project proponent ceases to be a fit and proper person

178.    Subclause 29(1) would allow the rules to make provision for and in relation to empowering the Regulator to cancel the registration of a registered biodiversity project.

 

179.    Rules made for the purposes of subclause 29(1) would only be able to empower the Regulator to cancel the registration of a biodiversity project where:

 

·          the Regulator is satisfied that a project proponent for the project is no longer a fit and proper person and,

 

·          after an additional 90 days have passed, the Regulator is still not satisfied that each of the project proponents for the project is a fit and proper person (subclause 29(2)).   

 

180.    The matters the Regulator is required to take into account when deciding whether a person is a fit and proper person would be set out in Part 8 of the Bill (see clauses 97 to 99A, as referred to in the note after subclause 29(2)).

 

181.    In other words, rules made for the purpose of subclause 29(1) would deal with the unilateral cancellation of a project’s registration on a basis that a project proponent for the project is not a fit and proper person.

 

182.    The purpose of the requirements is to ensure that the Regulator is able to take appropriate action if satisfied that a project proponent for a registered biodiversity project is no longer a fit and proper person. A project proponent who was a fit and proper person when the project was registered may no longer be considered a fit and proper person if they, for example, are convicted of an offence or ordered to pay a pecuniary penalty under Commonwealth, State or Territory law that relates to the environment, climate change, work, health or safety, or fraudulent or dishonest conduct.

 

183.    The purpose of providing an additional 90 days to have passed before the Regulator is able to cancel the biodiversity project’s registration is to allow time for the person to resolve the relevant issue (if it can be resolved) or for an application to be made to change the identity of the project proponent (to remove the person who is no longer a fit and proper person). After 90 days, the Regulator would need to reassess whether each of the project proponents for the project (including any new project proponents) are fit and proper persons. The rules would be required to provide that if, at this stage, the Regulator is now satisfied that each of the project proponents for the project are fit and proper persons, the Regulator would not be able to cancel the project’s registration.

 

184.    This would ensure that the cancellation of a project’s registration is only done as a last resort when the project proponent who is no longer a fit and proper person cannot resolve the relevant issue or be replaced by another project proponent who is a fit and proper person.

 

185.    Subclause 29(3) would provide that rules made for the purpose of subclause 29(1) would need to require the Regulator to consult with the project proponent for the project before deciding to cancel the registration. This would ensure that the principles of natural justice are complied with.

 

186.    It is appropriate for the circumstances in which the Regulator may unilaterally cancel a project’s registration to be set out in rules, as it may be necessary to tailor requirements and circumstances to different kinds of projects. However, the criteria set out at subclauses 29(2) and (3) would set appropriate parameters in the Bill that the Minister would need to comply with when making such rules. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

 

187.    A decision under rules made for the purposes of subclause 29(1) to cancel the registration of a registered biodiversity project would be a reviewable decision. The note following subclause 29(1) directs the reader to Part 20 of the Bill, which deals with reviewable decisions.

Clause 30 - Unilateral cancellation of registration of biodiversity project - project proponent ceases to exist etc.

188.    Subclause 30(1) would allow the rules to make provision for and in relation to empowering the Regulator to cancel the registration of a registered biodiversity project.

 

189.    Rules made for the purposes of subclause 30(1) would only be able to empower the Regulator to cancel the registration of a biodiversity project where Regulator is satisfied that the project proponent has died or ceased to exist (and there are no other project proponents for the project) or that the project is not being carried out (except to the extent that this is in accordance with the methodology determination that covers the project), that 90 days have passed since these circumstances started to exist, and that the circumstances still exist (subclause 30(2)).

 

190.    In other words, rules made for the purpose of subclause 30(1) would deal with the unilateral cancellation of a project’s registration on a basis that there is no project proponent for the project or the project is not being carried out.

 

191.    The purpose of these requirements is to ensure that the Regulator can take action to cancel the registration of a biodiversity project if it no longer has a project proponent or is no longer being carried out. This would also ensure that the Register only reflects projects which are being carried out for the purpose of achieving a biodiversity outcome. 

 

192.    The purpose of requiring an additional 90 days to have passed before the Regulator is able to cancel the biodiversity project’s registration is to allow time for a new project proponent to be specified for the project, and for the project proponent to recommence carrying out the project. After 90 days, the Regulator would need to reassess whether the circumstances in subclause 30(2) still exist. The rules would be required to provide that if, at this stage, the Regulator is now satisfied there is a project proponent for the project or that the project is now being carried out (as relevant), the Regulator would not be able to cancel the project’s registration. This would ensure that the cancellation of a project’s registration is only done as a last resort when the project proponent cannot be replaced or where no project proponent is prepared to continue carrying out the project.

 

193.    Subclause 30(3) would provide that rules made for the purpose of subclause 30(1) would need to require the Regulator to consult with the project proponent for the project (where there is one) before deciding to cancel the registration. This would ensure that the principles of natural justice are complied with.

 

194.    It is appropriate for the circumstances in which the Regulator may unilaterally cancel a project’s registration to be set out in rules, as it may be necessary to tailor requirements and circumstances to different kinds of projects. However, the criteria set out at subclauses 30(2) and (3) would set appropriate parameters in the Bill that the Minister would need to comply with when making such rules. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

 

195.    A decision under rules made for the purposes of subclause 30(1) to cancel the registration of a registered biodiversity project would be a reviewable decision. The note following subclause 30(1) directs the reader to Part 20 of the Bill, which deals with reviewable decisions.

Clause 31 - Unilateral cancellation of registration of biodiversity project - false or misleading information

196.    Subclause 31(1) would allow the rules to make provision for and in relation to empowering the Regulator to cancel the registration of a registered biodiversity project.

 

197.    Rules made for the purposes of subclause 31(1) would only be able to empower the Regulator to cancel the registration of a biodiversity project where the Regulator is satisfied that false or misleading information in connection with the project was given to the Regulator - either in (or in connection with) an application made under the Bill or rules, or in a biodiversity report or a notification under Division 3 of Part 9.

 

198.    In other words, rules made for the purpose of subclause 31(1) would deal with the unilateral cancellation of a project’s registration on a basis that false or misleading information was provided to the Regulator in relation to the project.

 

199.    The purpose of these requirements is to ensure that the Regulator can take action to cancel the registration of a biodiversity project if it becomes aware of false and misleading information having been provided about the project. 

 

200.    Subclause 31(3) would provide that rules made for the purpose of subclause 31(1) would need to require the Regulator to consult with the project proponent for the project before deciding to cancel the registration. This would ensure that the principles of natural justice are complied with.

 

201.    It is appropriate for the circumstances in which the Regulator may unilaterally cancel a project’s registration to be set out in rules, as it may be necessary to tailor requirements and circumstances to different kinds of projects. However, the criteria set out at subclauses 31(2) and (3) would set appropriate parameters in the Bill that the Minister would need to comply with when making such rules. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

 

202.    A decision under rules made for the purposes of subclause 31(1) to cancel the registration of a registered biodiversity project would be a reviewable decision. The note following subclause 31(1) directs the reader to Part 20 of the Bill, which deals with reviewable decisions.

Clause 32 - Notice of unilateral cancellation of registration of biodiversity project

203.    Clause 32 would provide an additional notification requirement for rules made under any of subclauses 26(1), 27(1), 28(1), 29(1), 30(1) or 31(1) (concerning the Regulator unilaterally cancelling the registration of a registered biodiversity project).

 

204.    Rules made for the purposes of any of these provisions would have to require the Regulator to give notice of the cancellation to the relevant land registration official and the holder of the certificate (where the holder is a different person to the project proponent). The rules would also be able to require the Regulator to give notice of the cancellation to other people.

Subdivision C—Cancellation of registration of biodiversity project at the end of the permanence period for the project

Clause 32A - Cancellation of registration of biodiversity project at the end of the permanence period for the project

205.    Clause 32A would have the effect that a project’s registration would be automatically cancelled at the end of the permanence period for the project. This is consistent with the fact that the permanence period is intended to cover the life of the project and there would be no obligations for project proponents (or any other person) in respect of the project after the end of the permanence period. Any biodiversity certificate issued for the project would also be cancelled at the end of the permanence period (see clause 77).

 

206.    The note following clause 32A would refer the reader to clause 34 which provides for the duration of the permanence period for a project.

Division 5 - Excluded biodiversity projects

Clause 33 - Excluded biodiversity projects

207.    Clause 33 would allow the rules to specify kinds of projects that are excluded biodiversity projects . An excluded biodiversity project would not be able to be registered under the Bill.

 

208.    In deciding to make such rules, the Minister would need to consider whether there is a material risk that the kind of project will have a material adverse impact on the availability of water, biodiversity (other than those kinds of biodiversity to be addressed by the kind of project in question), the environment (which would include land contamination and dust) employment, the local community or any local Aboriginal or Torres Strait Islander community who have a connection to the project area, and land access for agricultural production.

 

209.    The purpose of this provision is to allow the Minister to make rules to ensure that particular kinds of biodiversity projects cannot be registered on the basis that such projects are likely to have material adverse impacts. For example, an excluded biodiversity project might include a project to plant a species in an area where it is a known weed species, a project to plant trees through previously treeless ecosystems and turning a degraded native grassland into a woodland, or a project to plant non-wetland species on a previously drained wetland, reducing the ability to restore the wetland to its previously natural state in the future.

 

210.    In consideration of whether a kind of project will have adverse impacts to the local community, the Minister would be able to consider matters such as (but not limited to) the scale of the agricultural production system that may be impacted and the resulting impact to the related agricultural production in the local community, the relevant national resource management regional plan, healthy country plan or other land and sea management plans where applicable, and cumulative societal impacts and intergenerational equity in regions.

 

211.    It is appropriate for the rules to prescribe the excluded biodiversity projects as whether a particular kind of project should be excluded from the scope of the proposed legislation is likely to change over time as technologies become more advanced and communities and biodiversity evolve. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

Division 6 - Permanence period

Clause 34 - Permanence period

212.    Clause 34 would set out the duration of the permanence period for a registered biodiversity project.

 

213.    The permanence period for a registered biodiversity period would be defined in clause 7 of the Bill, as the period set out in the notice of approval of registration for the project (subject to any variation of the permanence period made under rules made for the purpose of paragraph 20(1)(d)). The permanence period would be required to comply with the requirements in clause 34. The permanence period for a registered biodiversity project sets the time for which the project (and the biodiversity affected by the project) must be monitored and protected. A biodiversity certificate issued for a registered biodiversity project would only be in force until the end of the permanence period for the project (see clause 77).

 

214.    The combined effect of subclauses 34(1) to (4) would be to set a default permanence period for all registered biodiversity projects of 25 years or 100 years from the day after the project is registered on the Register. Project proponents would be able to choose whether their project has a 25-year or 100-year permanence period (see subclause 12(3)).

 

215.    However, this default permanence period would not apply if the methodology determination that covers the project allows for a different permanence period to be ascertained. A methodology determination would be able to provide for a shorter or longer permanence period for a registered biodiversity project (or a kind of registered biodiversity project) covered by that methodology determination (subclause 34(5)).

 

216.    The permanence period of a registered biodiversity project would be able to be varied under rules made for the purposes of subclause 20(1) (see note following subclause 34(1)).

 

217.    Subclause 34(6) would allow the Regulator to unilaterally extend the permanence period of a registered biodiversity project if the Regulator is satisfied that there has been a significant reversal of the biodiversity outcome to which the project relates, and the extension is necessary to restore the biodiversity outcome, or mitigate the reversal. This is an integrity measure in the Bill. It would ensure that a project proponent is provided an avenue and time to undertake necessary remediation activities to protect or restore biodiversity following a significant reversal of the biodiversity outcome to which their project relates.

 

218.    Subclause 34(7) would allow the Regulator to extend the permanence period of a registered biodiversity project on request from the project proponent. The Regulator would only be able to approve a request to extend the permanence period for a project if the Regulator is satisfied that the biodiversity outcome to which the project relates has not been achieved, and the extension is necessary for the biodiversity outcome to be achieved.

 

219.    A decision under either subclause 34(6) (to extend a registered biodiversity project’s permanence period) or subclause 34(7) (to extend or refuse to extend a registered biodiversity project’s permanence period) would be a reviewable decision. This is reflected in the notes under both subclauses, which direct the reader to Part 20 of the Bill (dealing with reviewable decisions).

 

220.    A request under subclause 34(7) would need to be in writing and made in a form approved in writing by the Regulator (subclause 34(8)). The Regulator would be required to take all reasonable steps to ensure that a decision is made on the request within 30 days after the request was made (subclause 34(9)).

 

221.    Under subclause 34(10), if the Regulator extends the permanence period for a registered biodiversity project, the Regulator would be required to notify the following persons of the extension: the project proponent, the holder of the biodiversity certificate for the project (where different from the project proponent), the relevant land registration official, the registered native title body corporate (if the project area is in or on a native title area) and any other person specified in the rules.

 

222.    The Regulator would be required to notify the relevant land registration official of the end of the permanence period of a registered biodiversity project (subclause 34(11)).

 

223.    If the biodiversity certificate for a registered biodiversity project sets out the permanence period for that project, the Regulator would be required to vary that certificate to any extension of the permanence period for the project (subclause 34(12)).

PART 3 - MULTIPLE PROJECT PROPONENTS

GENERAL OUTLINE

224.    Part 3 of the Bill would provide for arrangements for registered biodiversity projects that have more than one project proponent, including the obligations that may be imposed on and discharged by the multiple project proponents. For example, this would provide flexibility for projects undertaken by landholders of adjacent properties to establish wildlife corridors.

 

225.    It would also allow multiple project proponents to nominate a nominee for the service of documents, and for the taking of eligible voluntary actions.

NOTES ON INDIVIDUAL CLAUSES

Division 1 - Introduction

Clause 35 - Simplified outline of this Part

226.    Clause 35 would provide a simplified outline of Part 3 of the Bill. The outline is not intended to be comprehensive and has been included to assist readers to understand the substantive provisions of Part 3, rather than to replace these provisions. It is intended that readers will rely on the substantive clauses of Part 3.

Division 2 - References to project proponents

Clause 36 - References to project proponents

227.    Clause 36 would clarify that, where there are 2 or more eligible persons who are registered as the project proponent for a registered biodiversity project (the multiple project proponents):

 

·          each of the multiple project proponents is a project proponent for the registered biodiversity project for the purposes of the Bill; and

 

·          a reference in the Bill, the rules or another instrument made under the Bill to the project proponent for the registered biodiversity project is to be read as a reference to each of the multiple project proponents.

 

228.    This would allow all multiple project proponents to share in the benefits of the registered biodiversity project, and to also be jointly and severally liable for responsibilities relating to the project. It is intended that participation in the market created by the Bill would involve a broad range of landholders including, in some circumstances, multiple project proponents. The approach in clause 36 would appropriately balance flexibility and participation with the need to ensure the integrity of the scheme.

 

Division 3 - Nominee of multiple project proponents

Clause 37 - Nomination of nominee by multiple project proponents - nomination accompanying application

229.    Clause 37 would apply where it is proposed that there be more than one project proponent for a registered biodiversity project. This will arise where 2 or more eligible persons are specified as proposed project proponents in the application for registration of the biodiversity project (under clause 11), or where an application is made (under rules made for the purpose of clause 19) to change the identity of the project proponent for an already registered biodiversity project so that the project has multiple project proponents (such as an application to add a new project proponent).

 

230.    Subclauses 37(2) and (3) would require the application to be accompanied by a notice nominating one of the eligible persons who would be project proponents as the nominee in relation to the biodiversity project. The notice would be required to be made in writing in the approved form. It would also be required to be made jointly by all the proposed project proponents for the biodiversity project.

 

231.    The purpose of requiring a nominee for projects with multiple project proponents is to reduce the burden on the multiple proponents to undertake joint projects and to allow for streamlined interactions with the Regulator. The nominee would be able to receive documents and act on behalf of the other project proponents.

 

232.    Subclauses 37(4) and (5) would clarify that if the application is granted, the nomination would take effect at the time the project is registered (for new projects) or at the time the variation takes effect (for already registered projects applying to change the identity of the project proponent). This would ensure that there is a nominee for all registered biodiversity projects with multiple project proponents. If the relevant application is not granted, the nomination would not take effect.

Clause 38 - Nomination of nominee by multiple project proponents - other nominations

233.    Clause 38 would provide a separate mechanism to nominate one of the project proponents as the nominee for the registered biodiversity project in circumstances where there is no application being made under either clause 11 (because the project is already registered) or under rules made for the purposes of clause 19 (because there is no change in the identity of the project proponents).

 

234.    This provision would be relevant if, for example, the multiple project proponents for a registered biodiversity project wished to change which one of them is the nominee for the purposes of the Bill.

 

235.     As with applications under clause 37, an application to nominate one of the project proponents to be the nominee in relation to the registered biodiversity project would be required to be made in writing (in the approved form) and would be required to be made jointly by the project proponents for the registered biodiversity project.

 

236.    Subclauses 38(4) and (5) would have the combined effect that a nomination made under clause 38 would take effect at the time it is given to the Regulator, at which time any other (previous) nomination in relation to the biodiversity project ceases to be in force. This would ensure that each registered biodiversity project that has multiple project proponents only has one nominee.

 

237.    The note following subclause 38(2) refers the reader to clause 42 of the Bill, which would have the effect that the Regulator may cancel the registration of a biodiversity project that has multiple project proponents where there is no nomination in force for 90 days or more.

Clause 39 - Revocation and cessation of nomination

238.    Clause 39 would deal with the revocation and cessation of a nomination made under clauses 37 or 38 in relation to a registered biodiversity project that has multiple project proponents.

 

239.    A nomination made under clause 37 or 38 for a registered biodiversity project would cease to be in force in two circumstances.

 

240.    The first is where one of the project proponents revokes the nomination by written notice to the Regulator. As all project proponents for a registered biodiversity project must agree on a nominee, any one of the project proponents for that project would be able to unilaterally revoke the nomination at any time.

 

241.    The second circumstance where a nomination will cease to be in force is where the nominee ceases to be a project proponent for the registered biodiversity project. For instance, following a variation to the project’s registration (under rules made for the purpose of clause 19) that has the effect of changing the identity of the project proponent to remove the nominee as a project proponent for the project.

 

242.    The note following subclause 38(2) refers the reader to clause 42 of the Bill, which would have the effect that the Regulator may cancel the registration of a biodiversity project that has multiple project proponents where there is no nomination in force for 90 days or more. Accordingly, where the nomination ceases to be in force under clause 39, the project proponents (or the remaining project proponents) for the project would need to nominate a new nominee in a timely manner or risk the registration for the biodiversity project being cancelled.

Clause 40 - Service of documents on nominee

243.    Clause 40 would have the effect that where:

 

·          there are 2 or more project proponents for a registered biodiversity project; and

 

·          the multiple project proponents have nominated a nominee (under subclause 37(2) or 38(2)) in relation to the project; and

 

·          the nomination is in force,

a document relating to the registered biodiversity project that is given to the nominee is taken to have been given to each of the multiple project proponents.

Clause 41 - Eligible voluntary action taken by nominee

244.    Clause 41 would clarify that:

 

·          the nominee (under clause 37 or 38) for a registered biodiversity project would be able to take an eligible voluntary action on behalf of the multiple project proponents for that project; and

 

·          where the nominee takes an eligible voluntary action, the Bill (and any instrument made under the Bill) has effect as if the eligible voluntary action had been made jointly by the multiple project proponents for the registered biodiversity project.

 

245.    In such circumstances, a reference to the ‘applicant’ in the Bill or an instrument made under the Bill would be taken to refer to each of the multiple project proponents, not just to the nominee.

 

246.    The purpose of this clause is to streamline interaction with the Regulator, while acknowledging that the multiple project proponents are jointly and severally responsible for the registered biodiversity project under the proposed legislation.

 

247.    An eligible voluntary action would be defined in clause 7 of the Bill to mean making an application, giving information in connection with an application, withdrawing an application, giving a notice (including an electronic notice), making a submission, making a request, or giving information in connection with a request, where the action is permitted (but not required) under the Bill or an instrument made under the Bill.

 

248.    Subclause 41(3) would have the effect that only the nominee would be able to take an eligible voluntary action on behalf of the multiple project proponents for a registered biodiversity project (not another of the project proponents).

Clause 42 - Unilateral cancellation of registration - failure of multiple project proponents to nominate a nominee

249.    Subclause 42(1) would allow the rules to make provision for and in relation to empowering the Regulator to cancel the registration of a registered biodiversity project.

 

250.    Rules made for the purpose subclause 42(1) would only be able to empower the Regulator to cancel the registration of a biodiversity project where a nomination made by multiple project proponents under clauses 37 or 38 ceases to be in force, and the Regulator is not provided with a new nomination within 90 days (subclause 42(2)).

 

251.    This is consistent with the policy that, for projects with multiple project proponents, there must be a nominee at all times. It would also enable, for example, the Regulator to cancel projects in circumstances where multiple project proponents cannot agree or make joint decisions in relation to the project.

 

252.    Subclause 42(3) would provide that rules made for the purpose of subclause 42(1) would need to require the Regulator to consult with the multiple project proponents before deciding to cancel the registration. This would ensure that the principles of natural justice are complied with.

 

253.    Subclause 42(4) would have the effect that the rules would need to require the Regulator to give notice of the cancellation to the relevant land registration official and the holder of the certificate (if any, and where the holder is a different person to the project proponent) if a decision is made to cancel the registration of a registered biodiversity project. The rules would also be able to require the Regulator to give notice of the cancellation to other people.

 

254.    It is appropriate for the circumstances in which the Regulator may unilaterally cancel a project’s registration to be set out in rules, as it may be necessary to tailor requirements and circumstances to different kinds of projects. However, the criteria set out at subclauses 42(2) to (4) would set appropriate parameters in the Bill that the Minister would need to comply with when making such rules. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

 

255.    A decision under rules made for the purposes of subclause 42(1) to cancel the registration of a registered biodiversity project would be a reviewable decision. The note following subclause 42(1) directs the reader to Part 20 of the Bill, which deals with reviewable decisions.

Division 4 - Obligations of multiple project proponents

Clause 43 - Obligations of multiple project proponents

256.    Clause 43 would clarify that, where a registered biodiversity project has multiple project proponents, all obligations imposed by the Bill (or an instrument made under the Bill) on the project proponent are imposed equally on all the multiple project proponents for the project.

 

257.    The intention is that the Regulator would be able to take action against any of the multiple proponents in relation to enforcing any obligation under the Bill.

 

258.    Notwithstanding this, the obligation would be able to be discharged by any one or more of the project proponents for the project. This means that the multiple project proponents would not need to act jointly to discharge an obligation imposed on the project proponent by the legislation. Rather, where one project proponent takes an action that discharges an obligation, that obligation would no longer apply to any of the project proponents for that project.

 

259.    Subclause 43(3) would allow the rules to exempt a specified obligation from the general rules in clause 43.

 

260.    For example, a rule may be made under Part 9 of the Bill which would set out a notification obligation in relation to factors that affect a proponent passing the fit and proper person test. It would not necessarily be reasonable to expect one proponent to be aware of such factors that would affect another project proponent passing the fit and proper person test. In such circumstances, the Minister would be able to make a rule for the purpose of subclause 43(3) exempting that obligation from the general rule in clause 43, with the effect that the Regulator would not be able to take action against one of the project proponents for the failure of another of the project proponents to provide the required information.

PART 4 - METHODOLOGY DETERMINATIONS

GENERAL OUTLINE

261.    Part 4 of the Bill would establish a framework and process for making, varying or revoking methodology determinations. Methodology determinations would set requirements on how registered biodiversity projects are to be carried out. Methodology determinations would be legislative instruments, and would be able to be made, varied or revoked by the Minister after consideration of certain matters, including advice from the Nature Repair Market Committee.

 

262.    Part 4 would also set out the biodiversity integrity standards. The Minister would only be able to make or vary a methodology determination if satisfied that it complies with the biodiversity integrity standards. There would be ten biodiversity integrity standards, falling into three separate categories: integrity standards relating to project design and delivery, integrity standards relating to biodiversity assessment, and integrity standards relating to biodiversity information on the register and certificates.

 

263.    Part 4 would also establish a framework and process for making, varying or revoking biodiversity assessment instruments. The purpose of a biodiversity assessment instrument is to establish an overarching, evidence-based standard to achieve appropriate consistency in how methodology determinations measure and assess biodiversity (including both a baseline and changes in biodiversity over time). A biodiversity assessment instrument is intended to transparently set out consistent requirements for how methodology determinations approach the assessment of baseline biodiversity and biodiversity outcomes for the project type. This would enable potential buyers to compare some aspects of projects under different methodology determinations to understand their relative value, and support scheme-level reporting of outcomes.

NOTES ON INDIVIDUAL CLAUSES

Division 1 - Introduction

Clause 44 - Simplified outline of this Part

264.    Clause 44 would provide a simplified outline of Part 4 of the Bill. The outline is not intended to be comprehensive and has been included to assist readers to understand the substantive provisions of Part 4, rather than to replace these provisions. It is intended that readers will rely on the substantive clauses of Part 4.

Division 2 - Methodology determinations

Subdivision A - Making of methodology determinations

Clause 45 - Methodology determinations

265.    Clause 45 would allow the Minister, by legislative instrument, to make a methodology determination (subclauses 45(1) and (2)). A methodology determination could only be  made by the Minister on the advice of the Nature Repair Market Committee that the methodology determination meets the biodiversity integrity standards, which would be informed by a public consultation process (see clause 47).

 

266.    Methodology determinations would cover a kind of biodiversity project and would set requirements for how that project is to be implemented, including the obligations applying to the person responsible for the project (the project proponent) under the Bill. Methodology determinations are a key integrity measure because they are intended to ensure that the projects registered under the Bill are managed and implemented in a way that results in genuine and verifiable biodiversity protection or enhancement - so that certificates are only issued for biodiversity protection or enhancement that would be unlikely to occur in the absence of the project and, therefore, provide a genuine, additional environmental benefit.

 

267.    Methodology determinations would be required to meet the biodiversity integrity standards (set out in clause 57). The biodiversity integrity standards would provide assurance to the market that methodology determinations would provide for relevant projects covered by the determination to deliver biodiversity outcomes, and that information about those outcomes could be relied upon by those purchasing biodiversity certificates.

 

268.    Each methodology determination would also have to comply with any applicable biodiversity assessment instruments (made by the Minister under clause 58). It is intended that a biodiversity assessment instrument would define the requirements for applying a consistent approach to measuring and assessing biodiversity (either across all methodology determinations or for a specified class of methodology determinations). Similar to methodology determinations, a biodiversity assessment instrument would be made by the Minister on the advice of the Nature Repair Market Committee and involve a public consultation process (see clause 59).

 

269.    It is intended that methodology determinations would be developed by the Department in a co-design process outside of the legislation, with opportunities for stakeholder and public engagement, consultation and participation in the design process. This could involve third parties submitting potential methodologies to the Department for consideration.

 

270.    Experts and stakeholders providing input on methodologies could include Aboriginal persons and Torres Strait Islanders and representatives, researchers, State and Territory governments, natural resource management organisations, non-government organisations, landholders, industry groups, potential buyers, and environmental practitioners. The intent would be that experts would have knowledge that is relevant to the methodology determination under development.

 

271.    It is intended that methodologies would be co-designed with Aboriginal persons and Torres Strait Islanders. This would provide opportunities for Indigenous knowledge of biodiversity, cultural heritage and practices to be recognised and appropriately considered.

 

272.    Subclause 45(1) would set out the mandatory requirements for a methodology determination. A methodology determination would be required to:

 

·          be expressed to cover a certain kind of biodiversity project (paragraph 45(1)(a)). For example, a methodology determination may cover marine projects, projects that involve mixed local native species tree and shrub planting or farm landscape grassland, woodland and wetland ecosystems restoration.

 

·          set out conditions that must be met for such a project to be registered as a registered biodiversity project (paragraph 45(1)(b);

 

·          provide for information that is to be included in the entry in the Register for such a project (paragraph 45(1)(c));

 

·          set out conditions that must be met for an application to be made for a biodiversity certificate to be issued in respect of such a project (paragraph 45(1)(d));

 

·          set out a method of working out the time after which such applications for a biodiversity certificate for the project may be made (paragraph 45(1)(d));

 

·          set out conditions that must be met for a biodiversity certificate to be issued in respect of such a project (paragraph 45(1)(e));

 

·          require the project proponent for such a project to notify the Regulator of specified matters relating to the project (paragraph 45(1)(f));

 

·          provide for information that is to be included in the entry in the Register for a biodiversity certificate issued in relation to such a project (paragraph 45(1)(g));

 

·          set out the activities that are to be carried out for the purposes of such a project (paragraph 45(1)(h));

 

·          provides for the activity period (if any) of such a project to be worked out (paragraph 45(1)(i)).

 

273.    The note following subclause 45(2) would refer the reader to clause 50 of the Bill, which deals with the duration of methodology determinations.

 

274.    Subclause 45(3) would allow a methodology determination to impose any or all of the following kinds of requirements on the project proponent of a registered biodiversity project that is covered by the determination:

 

·          specified requirements to carry out activities in the project area for the purposes of the project;

 

·          specified requirements to ensure that specified activities are not carried out, by the project proponent or any other person, in the project area;

 

·          specified requirements to include information relating to the project in each biodiversity project report about the project;

 

·          specified requirements to notify one or more matters relating to the project to the Regulator;

 

·          specified record keeping requirements relating to the project;

 

·          specified requirements to monitor the project.

 

275.    Requirements imposed by a methodology determination under subclause 45(3) are intended to ensure that the biodiversity outcome for the project is achieved. For example, the methodology determination may impose a requirement on the project proponent to not engage in any activities that involve the clearing of land covered by the project area, if such activities would be inconsistent with the biodiversity outcome for the project. Other examples are that the methodology determination could impose a requirement on the project proponent to complete annual weed removal and feral predator control activities within the project area, or a requirement to no longer permit livestock access to a wetland being restored within a project area.

 

276.    The note following subclause 45(3) would refer the reader to clause 46 of the Bill, which would provide a civil penalty for contravening requirements in a methodology determination to either carry out activities in the project area or to ensure that specified activities are not carried out, by the project proponent or any other person, in the project area. Similarly, notification, record-keeping or project monitoring requirements imposed by a methodology determination would be enforceable through civil penalty provisions (see clauses 108, 181 and 182 of the Bill).

 

277.    Subclause 45(4) would clarify that a methodology determination would be able to exempt traditional Indigenous activities from a requirement imposed under paragraph 45(3)(b) (specified requirements to ensure that specified activities are not carried out, by the project proponent or any other person, in the project area).

 

278.    Subclause 45(5) deals with conditions imposed by a methodology determination under paragraphs 45(1)(b), (d) or (e). These are conditions that would need to be met in order to register the project, apply for a biodiversity certificate for the project or issue a biodiversity certificate for the project.

 

279.    Paragraph 45(5)(a) would have the effect that where the methodology determination covers a kind of biodiversity project that involves the enhancement of biodiversity, the conditions imposed by the methodology determination must include conditions relating to the measurement or assessment of the enhancement of biodiversity.

 

280.    Similarly, paragraph 45(5)(b) would have the effect where the methodology determination covers a kind of biodiversity project that involves the protection of biodiversity, the conditions imposed by the methodology determination must include conditions relating to the measurement or assessment of the protection of biodiversity.

 

281.    A methodology determination would be able to cover a kind of biodiversity project that involves both the protection of biodiversity and the enhancement of biodiversity. In that case, the methodology determination would need to include conditions to meet the requirements of both paragraphs 45(5)(a) and (b).

 

282.    Subclause 45(6) deals with requirements imposed by a methodology determination under paragraphs 45(1)(f), (3)(c), (3)(d) or (3)(f). These are notification, reporting and monitoring requirements that are imposed on the project proponent for the project.

 

283.    Paragraph 45(6)(a) would have the effect where the methodology determination covers a kind of biodiversity project that involves the enhancement of biodiversity, the requirements imposed by the methodology determination must include requirements relating to the measurement or assessment of the enhancement of biodiversity.

 

284.    Similarly, paragraph 45(6)(b) would have the effect where the methodology determination covers a kind of biodiversity project that involves the protection of biodiversity, the requirements imposed by the methodology determination must include requirements relating to the measurement or assessment of the protection of biodiversity.

 

285.    As above, a methodology determination would be able to cover a kind of biodiversity project that involves both the protection of biodiversity and the enhancement of biodiversity. In that case, the methodology determination would need to include requirements consistent with both paragraphs 45(6)(a) and (b).

 

286.    The purpose of the requirements in subclauses 45(5) and (6) is to ensure that projects are required to measure and assess the biodiversity, and the changes in biodiversity, occurring in the project area during the life of the project. This will allow an accurate assessment of the extent to which the project achieves its biodiversity outcome.

 

287.    Any such conditions or requirements imposed by a methodology determination would need to comply with the biodiversity integrity standards, including being supported by clear and convincing evidence, being consistent with relevant Indigenous knowledge and values relating to biodiversity and cultural heritage (so far as reasonably practicable), being consistent with enhancement or protection of biodiversity that is appropriate to the project area, enabling adaptive management, and requiring a clear indication of the level of certainty and confidence of achievement of the enhancement or protection of biodiversity (see paragraph 57(1)(e)).

 

288.    In addition, any such conditions or requirements would need to comply with the requirements in an applicable biodiversity assessment instrument concerning the measurement and assessment of biodiversity and the enhancement or protection of biodiversity. This would ensure, so far as practicable, a consistent approach to measuring and assessing biodiversity under the Bill.

 

289.    Subclause 45(7) would allow a methodology determination to require a registered biodiversity project that is covered by the determination to have a project plan that is in force until the time ascertained in accordance with the methodology determination.

 

·          A project plan would set out how the project is intended to be carried out and how the project is intended to achieve the biodiversity outcome for the project. It would be required to be consistent with the methodology determination that covers the project, and include such information, and comply with such requirements, as are specified in the rules or the methodology determination that covers the project (see definition of project plan in clause 7);

 

·          Project plans are an integrity measure. Project plans would enable the requirements of the methodology to be tailored to regional and site-specific factors to ensure that management activities are appropriate and support adaptive management. The extent to which a project plan is implemented (which may be evidenced through reporting requirements) would also be relevant to the decision whether to issue a biodiversity certificate for the project (see clause 70).

 

290.    Subclause 45(8) would clarify that, in addition to the matters specified in clause 45, a methodology determination would prescribe any other matters required or permitted by the Bill to be prescribed by a methodology determination. For instance, clause 34 of the Bill would allow a methodology determination to determine a registered biodiversity project (or a kind of registered biodiversity project) has a longer or short permanence period than the default 25-year or 100-year permanence period.

 

291.    Subclause 45(9) is an avoidance of doubt provision. It would clarify that, without limiting subsection 33(3A) of the AI Act, a methodology determination would be able to make different provision in relation to different kinds of biodiversity projects covered by the determination. For example, a methodology determination may set out requirements that differ depending on the region in which the project area is located (see note following subclause 45(9)).

 

292.    Subclause 45(10) would override subsection 14(2) of the Legislation Act 2003 (Legislation Act) by allowing a methodology determination to make provision in relation to a matter by applying, adopting or incorporating any written material (with or without modification) as in force or existing from time to time. This is appropriate because the types of materials that are likely to be incorporated by reference in a methodology determination include international agreements or relevant standards that apply to biodiversity (or specific types of biodiversity) and which may be amended or updated from time to time. A methodology determination would be able to incorporate such agreements or standards as existing from time to time, which will ensure that requirements in the determination derive from, or relate to, the most up to date version of the document without the need to amend the determination to reflect an update in those international agreements or standards. This approach will provide confidence in the biodiversity market without compromising environmental standards, as it ensures that the methodology determinations reflect the most up to date information and, therefore, helps to ensure methodology determination are appropriate and fit for purpose. 

 

293.    In allowing for the adoption of non-legislative instruments as existing from time to time, consideration has been given to the fundamental principle of the Legislation Act, and of access to justice, that people are easily able to understand their rights and obligations at law. It is intended that any document incorporated by reference in a methodology determination will be either made available on, or be accessible through, either the Department’s or the Regulator’s website (as appropriate).

 

294.    Additionally, in order to comply with paragraph 15J(2)(c) of the Legislation Act, the explanatory statements for the methodology determinations will contain a description of the relevant incorporated material and indicate how it may be obtained. This will include details of where the list of the incorporated documents will be published.

 

295.    Subclause 45(11) would provide that a methodology determination may make provision in relation to a matter by conferring a power to make a decision of an administrative character on the Regulator.

 

296.    The note following subclause 45(11) would refer the reader to Part 20 of the Bill, which deals with reviewable decisions. Clause 212 would allow a methodology determination to provide that one or more administrative decisions made under that determination are merits reviewable.

 

297.    Subclauses 45(12) and (13) would have the combined effect that:

 

·          the Minister would only be able to make a methodology determination if there is a biodiversity assessment instrument (or instruments) in force that applies to that methodology determination; and

 

·          the methodology determination would be required to comply with any requirements imposed by the relevant biodiversity assessment instrument (or instruments) that apply to the methodology determination.

 

298.    The purpose of these requirements is to ensure, so far as possible, appropriate consistency in how methodology determinations measure and assess biodiversity (including both a baseline and changes in biodiversity over time). A biodiversity assessment instrument is intended to transparently set out consistent requirements for how methodology determinations approach the assessment of baseline biodiversity and biodiversity outcomes for the project type. This would enable potential buyers to compare some aspects of projects under different methodology determinations to understand their relative value, and support scheme-level reporting of outcomes.

Clause 46 - Civil penalties - requirements in methodology determination

299.    Clause 46 would impose two civil penalty provisions relating to compliance with requirements in a methodology determination.

 

300.    Subclause 46(1) would have the effect that an eligible person is liable for a civil penalty if each of the following is satisfied:

 

·          the eligible person is a project proponent of a registered biodiversity project for which a biodiversity certificate has been issued (whether or not the certificate remains in force); and

 

·          the methodology determination that covers the project imposes specified requirements to carry out activities in the project area, or to ensure that specified activities are not carried out in the project area; and

 

·          the eligible person, or any other project proponent for the project, fails to comply with the requirement.

 

301.    Subclauses 46(2) and (3) would have the combined effect that an eligible person is liable for a civil penalty if each of the following is satisfied:

 

·          the eligible person is a project proponent of a registered biodiversity project for which a biodiversity certificate has been issued (whether or not the certificate remains in force); and

 

·          the methodology determination that covers the project requires the project proponent for the project to ensure that an activity is not carried out in the project area; and

 

·          the activity is carried out in the project area by the project proponent or any other person; and

 

·          the eligible person does not take all reasonable steps to ensure that the prohibited activity is not carried out in the project area.

 

302.    The note after subclause 46(3) would explain that the defendant bears an evidential burden in relation to showing that the eligible person did not take all reasonable steps to ensure that the activity is not carried out in the project area. This is because section 96 of the Regulatory Powers (Standard Provisions) Act 2014 (Regulatory Powers Act) provides that if a defendant wishes to rely on an exception to a civil penalty provision, the defendant bears an evidential burden of proof in relation to that matter. This is appropriate on the basis that knowledge of that matter would be peculiar to that person. In this case, it is appropriate that the defendant (the eligible person) bear the evidential burden, as whether they took all reasonable steps to ensure the prohibited activity was not carried out in the project area is a matter that is peculiarly within the knowledge of the eligible person.

 

303.    It is also appropriate for the project proponent to be liable for activities carried out by other persons that breach the requirements of the methodology determination. This is because the project proponent is responsible for the project, including for ensuring that the project complies with the relevant methodology determination. This responsibility would guard against project failure without consequence, which would undermine the market created by the Bill.

 

304.    The maximum civil penalty that would apply in these circumstances would be 2000 penalty units. The size of the maximum penalty is considered appropriate as a deterrent to reflect the seriousness of failing to comply with the requirements specified in a methodology determination. As this is a voluntary scheme, these civil penalty provisions are aimed at protecting an emerging market that will facilitate tangible environmental outcomes as well as a new income stream for participants. Failing to comply with the requirements of a methodology determination may undermine the integrity of this emerging market, which could in turn erode the confidence of trading partners in the market and may therefore adversely impact market access. Such conduct may also result in harm to biodiversity and environmental health more generally. The consequence of non-compliant behaviour by one person may therefore impact the ability of others, and of the environment, to benefit from the market in the future.

 

305.    The civil penalty provisions in clause 46 would only apply to projects for which a biodiversity certificate has been issued. This is appropriate, as it is the certificate stage where the project will become part of the emerging market, which needs to be protected. In contrast, where a biodiversity certificate has not yet been issued in respect of a registered biodiversity project, the appropriate consequence for failure to comply with a methodology determination may be a refusal to issue a biodiversity certificate or cancellation of registration (on the basis that the project is not being carried out in a way likely to result in a biodiversity certificate).

Clause 47 - Procedure for making a methodology determination

306.    Clause 47 would set out the procedure that the Minister must follow when making a methodology determination.

 

307.    Before making a methodology determination, the Minister would be required to request advice from the Nature Repair Market Committee about whether the Minister should make the determination (subclause 47(2)). This is a key integrity measure for the Bill, as it would ensure that the Minister has access to expert advice on whether the methodology determination should be made (including whether the determination complies with the biodiversity integrity standards).

 

308.    The note following subclause 47(2) would explain that the Nature Repair Market Committee would be required to have regard to certain matters in giving advice to the Minister, and refers the reader to clause 54 of the Bill which deals with these matters.

 

309.    The combined effect of paragraph 47(1)(a) and subclauses 47(3) and (5) is that the Minister would only be able to make a methodology determination if each of the following criteria are met:

 

·          the Nature Repair Market Committee has given the Minister advice in relation to the making of the determination that includes a statement to the effect that the Committee is satisfied that the determination complies with the biodiversity integrity standards; and

 

·          the Minister has had regard to the Committee’s advice; and

 

·          the Minister is satisfied that the determination complies with the biodiversity integrity standards.

 

310.    In other words, the critical issue for making a methodology determination would be whether the proposed determination complies with the biodiversity integrity standards.

 

311.    In practice, the Minister could only make a methodology determination if the Nature Repair Market Committee has first advised that the proposed determination complies with the biodiversity integrity standards. However, the Minister would also need to themselves be satisfied that the proposed determination complies with the biodiversity integrity standards. This requirement for double satisfaction is appropriate, as the biodiversity integrity standards are the key mechanism for providing assurance (to the Minister and the market) that the methodology determinations in force would provide for projects that deliver biodiversity outcomes, and that information about those outcomes could be relied on by those who are purchasing biodiversity certificates. The biodiversity integrity standards would be set out in clause 57 of the Bill.

 

312.    In addition to the mandatory requirements set out above, when making a methodology determination, paragraph 47(1)(b) has the effect that the Minister would also be able to have regard to the following matters:

 

·          whether significant adverse environmental, agricultural, cultural, economic or social impacts are likely to arise from the carrying out of the kind of project that would be covered by the determination; and

 

·           any other matters the Minister considers relevant.  

 

313.    These discretionary considerations would allow the Minister to take account of advice received from persons other than the Nature Repair Market Committee where relevant and appropriate.

 

314.    Subclause 47(4) would require the Minister to cause a copy of any advice received from the Nature Repair Market Committee in relation to the proposed determination to be published on the Department’s website as soon as practicable after the Minister decides to make, or not to make, a methodology determination. This requirement would ensure there is appropriate transparency in relation to the Minister’s decision.

 

315.    Subclauses 47(6) and (7) would have the combined effect that if the Minister decides to make a methodology determination, the Minister would be required to prepare a statement of reasons for that decision, and publish the statement of reasons on the Department’s website, as soon as practicable after making the decision. These requirements would ensure greater transparency about the Minister’s decision.

 

316.    Subclause 47(8) would clarify that subsection 33(3) of the AI Act would not apply to a methodology determination. Subsection 33(3) of the AI Act has the effect that where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules and determinations) the power shall be construed as including a power to vary or revoke that instrument, in like manner and subject to the like conditions. This means that the instrument maker would be required to comply with the same pre-conditions as for making the instrument in the first place.

 

317.    The effect of subclause 47(8) would be to turn off this power for varying or revoking a methodology determination. This is because the Bill would contain express powers to vary and revoke a methodology determination (clauses 48 and 51, respectively).

 

318.    The note following subclause 47(8) would refer the reader to subdivisions B and C of Division 2 of Part 4, which deal with varying and revoking a methodology determination.

Subdivision B - Variation of methodology determinations

Clause 48 - Variation of methodology determinations

319.    Clause 48 would deal with variations to methodology determinations.

 

320.    Subclause 48(1) would provide the power for the Minister to, by legislative instrument, vary a methodology determination.

 

321.    Subclauses 48(2) to (9) would set out the procedure that the Minister must follow when varying a methodology determination.

 

322.    Similar to the procedure for making a methodology determination, before varying a methodology determination the Minister would be required to request advice from the Nature Repair Market Committee about whether the Minister should vary the determination (subclause 48(3)). This is a key integrity measure for the Bill, as it would ensure that the Minister has access to expert advice on whether the varied methodology determination should be made (including whether the varied determination complies with the biodiversity integrity standards).

 

323.    The note following subclause 48(3) would explain that the Nature Repair Market Committee would be required to have regard to certain matters in giving advice to the Minister, and refers the reader to clause 54 of the Bill which deals with these matters.

 

324.    The exception to this requirement is minor variations , for which no advice from the Committee is required (see subclause 48(8)). This is explained in the second note following subclause 48(3).

 

325.    The combined effect of paragraph 48(2)(a) and subclauses 48(4) and (6) is that the Minister would only be able to vary a methodology determination if each of the following criteria are met:

 

·          the Nature Repair Market Committee has given the Minister advice in relation to the proposed variation of the determination that includes a statement to the effect that the Committee is satisfied that the determination (as varied) complies with the biodiversity integrity standards; and

 

·          the Minister has had regard to the Committee’s advice; and

 

·          the Minister is satisfied that the determination (as varied) complies with the biodiversity integrity standards.

 

326.    Again, these requirements would not apply to minor variations (see subclause 48(9)).

 

327.    In other words, the critical issue for varying a methodology determination (other than a minor variation) would be whether the proposed determination complies with the biodiversity integrity standards. This aligns with making a methodology determination under clause 47.

 

328.    In practice, the Minister could only vary a methodology determination if the Nature Repair Market Committee has first advised that the proposed determination (as varied) complies with the biodiversity integrity standards. However, the Minister would also need to themselves be satisfied that the varied determination complies with the biodiversity integrity standards. This requirement for double satisfaction is appropriate, as the biodiversity integrity standards are the key mechanism for providing assurance (to the Minister and the market) that the methodology determinations in force would provide for project that deliver biodiversity outcomes, and that information about those outcomes could be relied on by those who are purchasing biodiversity certificates. The biodiversity integrity standards would be set out in clause 57 of the Bill.

 

329.    In addition to the mandatory requirements set out above, when varying a methodology determination, paragraph 48(2)(b) has the effect that the Minister would also be able to have regard to the following matters:

 

·          whether significant adverse environmental, agricultural, cultural, economic or social impacts are likely to arise from the carrying out of the kind of project that would be covered by the determination; and

 

·           any other matters the Minister considers relevant. 

 

330.    These discretionary considerations would allow the Minister to take account of advice received from persons other than the Nature Repair Market Committee where relevant and appropriate.

 

331.    Subclause 48(5) would require the Minister to cause a copy of any advice received from the Nature Repair Market Committee in relation to the proposed determination to be published on the Department’s website as soon as practicable after the Minister decides to vary, or not to vary, a methodology determination. This requirement would ensure there is appropriate transparency in relation to the Minister’s decision.

 

332.    Again, these requirements would not apply to minor variations (see subclause 48(9)).

 

333.    Subclauses 48(7) and (8) would have the combined effect that if the Minister decides to vary a methodology determination, the Minister would be required to prepare a statement of reasons for that decision, and publish the statement of reasons on the Department’s website, as soon as practicable after making the decision. These requirements would ensure greater transparency about the Minister’s decision

 

334.    Subclause 48(9) would provide that the requirements in subclauses 48(3) to (5) and 48(7) do not apply to minor variations. It is intended that a minor variation would generally be a variation that results in no substantive change to the determination - for example, to correct a typographical error. In such circumstances, the requirements in subclauses 48(3) to (5) and 48(7) are considered unnecessary and inappropriate.

Clause 49 - When variation takes effect

335.    Clause 49 would set out when a variation to a methodology determination would take effect and how the variation would apply to existing registered biodiversity projects.

 

336.    Subclause 49(1) would make it clear that a variation to a methodology determination would take effect on the day after the variation instrument is registered or, if the instrument specifies a later commencement day, on that later day.

 

337.    Subclauses 49(2) to (4) would contain three rule-making powers concerning the consequences of a variation to a methodology determination on existing registered biodiversity projects.

 

338.    The effect of subclause 49(2) would be to allow the rules to prescribe circumstances in which the variation of a methodology determination would apply to a registered biodiversity project that is covered by the methodology determination. The rules would achieve this by specifying conditions that, if satisfied by an existing project, would result in that project being subject to the varied methodology determination.

 

339.    The effect of subclause 49(3) would be to allow the rules to prescribe circumstances in which the variation of a methodology determination would not apply to a registered biodiversity project that is covered by the methodology determination. The rules would achieve this by specifying conditions that, if satisfied by an existing project, would result in that project not being subject to the varied methodology determination.

 

340.    Where an existing registered biodiversity project is not subject to the varied methodology determination, that project would still be covered by the original methodology determination (as it was in effect prior to the variation) - unless and until the project proponent applies to vary the registration of the project to change the methodology determination that covers the project.

 

341.    Rules made for the purposes of subclause 49(4) would be able to provide a process for the Regulator to approve, on application from the project proponent, that a variation of a methodology determination should not apply to an existing registered biodiversity project. The rules would achieve this by empowering the Regulator to approve an application by the project proponent if specified conditions are met.

 

342.    It is intended that the rule-making powers in subclauses 49(2) and (3) would be used, respectively, to set the general (default) rules about when a variation to a methodology determination would, and would not, apply to an existing registered biodiversity project.

 

343.    The rule-making power in subclause 49(4) would then be able to provide a process for a project proponent to apply, on a case-by-case basis, for their project not to be subject to a variation of a methodology determination (in circumstances where the project would otherwise have been subject to the variation, under rules made for the purpose of subclause 49(2)). If the Regulator approves the application, the project would continue to be covered by the original methodology determination, as it was in effect prior to the variation.

 

344.    It is not necessary for the rules to provide for a process for project proponents to be able to apply for their existing project to be covered by the varied methodology determination ( in circumstances where the project would otherwise have not been subject to the variation, under rules made for the purpose of subclause 49(3)). This is because the varied methodology determination would be in effect from the commencement of the variation instrument - which means the project proponent would be able to apply, under rules made for the purposes of clause 20 of the Bill, to vary their project’s registration to change the methodology determination that covers the project. This would be explained by the note following subclause 49(4).

 

345.    It is appropriate that the consequences of a variation of a methodology determination on existing registered biodiversity projects covered by that methodology determination are set out in the rules. This is because the conditions that would need to be satisfied for an existing registered biodiversity project to be subject to (or not subject to) a variation of a methodology determination may need to be tailored to specific kinds of projects, in order to ensure they are fit for purpose and ensure that biodiversity continues to be protected or enhanced to the greatest extent possible.   However, the criteria set out at subclauses 49(2) to (4) would set appropriate parameters in the Bill that the Minister would need to comply with when making such rules. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

 

346.    Subclause 49(5) would allow the rules to make provision for and in relation to the following matters relating to an application under rules made for the purpose of subclause 49(4):

 

·          the approval by the Regulator of a form for such an application (including requirements for verification of statements in the application);

 

·          information or documents that must accompany such an application;

 

·          the fee (if any) that must accompany such an application;

 

·          the withdrawal of such an application;

 

·          requirements for requesting further information from an applicant;

 

·          the power for the Regulator to refuse to consider, or to take any action (or any further action) in relation to, an application if requested further information is not provided.

 

347.    Subclause 49(6) would make it clear that any fee imposed for such an application must not be such as to amount to taxation.

 

348.    Subclauses 49(7) and (8) would deal with the effect of a variation to a methodology determination on an application under clause 11 of the Bill for approval to register a biodiversity project that:

 

·          has been made, but not finalised, at the time the variation commences; and

 

·          proposes that the project will be covered by the methodology determination.

 

349.    Subclause 49(7) would have the effect that, in these circumstances, the Regulator would be required to assess the application as if the application proposes that the varied methodology determination will cover the project.

 

350.    Similarly, if the project is registered, it would be covered by the varied methodology determination (unless and until the project proponent applies to vary the registration of the project to change the methodology determination that covers the project). There would be no ability for a project covered by the original determination to be newly registered after the variation commences.

 

351.    Subclause 49(8) would allow the rules to provide for the Regulator to notify an eligible person that an application they have made under clause 11 of the Bill to register a biodiversity project is affected by a variation to the methodology determination that is proposed to cover the project, and to give the person an opportunity to withdraw or vary the application before the Regulator makes a decision. This would provide applicants with an opportunity to assess whether they are happy for the varied methodology determination to cover the project or, potentially, to change the methodology determination that is proposed to cover the project to another methodology determination that is in effect.

 

352.    Subclause 49(9) would require the Regulator to, on behalf of the Commonwealth, refund any application fee the applicant has paid in respect of an application for approval of the registration of a biodiversity project that is withdrawn under rules made for the purposes of subclauses 49(5) or (8).

Subdivision C - Duration, expiry and revocation of methodology determinations

Clause 50 - Duration of methodology determinations

353.    Clause 50 would provide for the duration of methodology determinations.

 

354.    Paragraph 50(1)(a) would deal with when a methodology determination comes into force. The default commencement for a methodology determination would be the day after it is registered on the Federal Register of Legislation. However, the determination itself would be able to specify a later commencement date - if it does, the determination would commence at the time specified in the determination.

 

355.    Paragraph 50(1)(b) would deal with how long a methodology determination will be in force. A methodology determination would remain in force (if not disallowed or sunsetted under the Legislation Act) until the earliest of the following:

 

·          if a period is specified in the methodology determination itself - the end of that period;

 

·          if the Minister makes a legislative instrument that specifies a period for the methodology determination to remain in force - the end of that period;

 

356.    For a methodology determination to cease effect at any other date, the Minister would need to exercise the power in clause 51 to revoke the determination (and would need to comply with the procedural requirements in that clause before doing so).

 

357.    Subclause 50(2) would remove any doubt that if a methodology determination ceases to be in force, the Minister would still be able to make a new (fresh) methodology determination in the same terms as the determination that has ceased to be in force.

Clause 51 - Revocation of methodology determinations

358.    Clause 51 would allow the Minister, by legislative instrument, to revoke a methodology determination. However, before doing so, the Minister would be required to:

 

·          request advice from the Nature Repair Market Committee about whether the Minister should revoke the determination (subclause 51(2)); and

 

·          have regard to certain matters, being whether the determination complies with the biodiversity integrity standards, the advice given by the Nature Repair Market Committee on whether the Minister should revoke the determination and any other matters the Minister considers relevant (subclause 51(3)).

 

359.    The note following subclause 51(2) would explain that the Nature Repair Market Committee would be required to have regard to certain matters in giving advice to the Minister, and would direct the reader to clause 54 of the Bill.

 

360.    Subclause 51(4) would have the effect that, regardless of whether the Minister decides to revoke or not revoke the methodology determination, the Minister would be required, as soon as practicable after making the decision, to cause a copy of the Nature Repair Market Committee’s advice to be published on the Department’s website. This requirement would ensure there is appropriate transparency in relation to the Minister’s decision.

 

361.    Subclauses 51(5) and (6) would have the combined effect that if the Minister decides to revoke a methodology determination, the Minister would be required to prepare a statement of reasons for that decision, and publish the statement of reasons on the Department’s website, as soon as practicable after making the decision. These requirements would ensure greater transparency about the Minister’s decision.

Clause 52 - Consequences of methodology determination ceasing to have effect

362.    Clause 52 would set out the consequences of a methodology determination ceasing to have effect on existing registered biodiversity projects that are covered by the ceased determination.

 

363.    The default consequence would be that the ceased methodology determination would no longer apply to the existing project. This is because the methodology determination would no longer have any legal effect.

 

364.    It is intended that, in these circumstances, the ordinary course of action would be for the project proponent for an existing registered biodiversity project to apply, under rules made for the purposes of clause 20 of the Bill, to vary the project’s registration to change the methodology determination that covers the project.  

 

365.    However, there may be some circumstances where it is appropriate for the ceased methodology determination to continue to apply to an existing project. An example might be where there is no other methodology determination in effect that would be relevant to the kind of project and the project proponent is able to satisfy the Regulator that it is appropriate for the project to continue under the scheme.

 

366.    The effect of subclause 52(1) would be to allow the rules to prescribe circumstances in which a ceased methodology determination would continue to apply to an existing registered biodiversity project. The rules would achieve this by specifying conditions that, if satisfied by an existing project, would result in that project continuing to be covered by the ceased methodology determination (as if it had not ceased).

 

367.    Rules made for the purposes of subclause 52(2) would be able to provide a process for the Regulator to approve, on application from the project proponent, that a ceased methodology determination should continue to apply to an existing registered biodiversity project. The rules would achieve this by empowering the Regulator to approve an application by the project proponent if specified conditions are met.

 

368.    It is intended that the rule-making power in subclause 52(1) would be used to set the general (default) rules about when a ceased methodology determination would continue to apply to an existing registered biodiversity project.

 

369.    The rule-making power in subclause 52(2) would then be able to provide a process for a project proponent to apply, on a case-by-case basis, for their project to continue to be covered by a ceased methodology determination - in circumstances where the project would otherwise not be covered by the rules made for the purpose of subclause 52(1). If the Regulator approves the application, the project would continue to be covered by the ceased methodology determination, as if it had not ceased.

 

370.    It is appropriate that the requirements for when a ceased methodology determination continues to apply to existing registered biodiversity projects are set out in the rules. This is because the conditions that would need to be satisfied for an existing registered biodiversity project to continue to be covered by a ceased methodology determination may need to be tailored to specific kinds of projects, in order to ensure they are fit for purpose and to ensure that biodiversity continues to be protected or enhanced to the greatest extent possible . However, the criteria set out at subclauses 52(1) and (2) would set appropriate parameters in the Bill that the Minister would need to comply with when making such rules. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

 

371.    Subclause 52(3) would allow the rules to make provision for and in relation to the following matters relating to an application under rules made for the purpose of subclause 52(2):

 

·          the approval by the Regulator of a form for such an application (including requirements for verification of statements in the application);

 

·          information or documents that must accompany such an application;

 

·          the fee (if any) that must accompany such an application;

 

·          the withdrawal of such an application;

 

·          requirements for requesting further information from an applicant;

 

·          the power for the Regulator to refuse to consider, or take any action (or any further action) in relation to, an application if requested further information is not provided.

 

372.    Subclause 52(4) would make it clear that any fee imposed for such an application must not be such as to amount to taxation.

 

373.    Subclause 52(5) would require the Regulator, on behalf of the Commonwealth, to refund any application fee the applicant has paid in respect of an application for approval of the registration of a biodiversity project that is withdrawn under rules made for the purposes of subclause 52(3).

 

374.    Subclause 52(6) would allow the rules to make provision for and in relation to empowering the Regulator to unilaterally vary the registration of an existing registered biodiversity project to change the methodology determination that covers the project if:

 

·          the methodology determination that covers the project ceases to have effect; and

 

·          the conditions specified in the rules are satisfied.

 

375.    It is intended that rules made for the purpose of subclause 52(6) would be used to ensure that the Regulator could change the methodology determination that covers the project in the event that the determination ceases and both:

 

·          the project proponent does not apply (under rules made for the purposes of clause 20) to vary the project’s registration to change the methodology determination covering the project;

 

·          the ceased methodology determination would not continue to cover the project under rules made for the purposes of subclauses 52(1) or (2). 

 

376.    This would ensure that, following the ceasing of the relevant methodology determination, the project would not be left without a methodology determination to cover it.

 

377.    It is appropriate that the requirements for when the Regulator can unilaterally vary the registration of a registered biodiversity project to change the methodology determination that covers the project are set out in rules. This is because the conditions that would need to be satisfied may need to be tailored to specific kinds of projects, in order to ensure they are fit for purpose and to ensure that biodiversity continues to be protected or enhanced to the greatest extent possible. However, the criteria set out at subclause 52(6) would set appropriate parameters in the Bill that the Minister would need to comply with when making such rules. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

Clause 53 - Effect of methodology determination ceasing to have effect - applications for registration

378.    Clause 53 would require the Regulator to refuse to register a biodiversity project if the methodology determination that covers the project (as specified in the application for registration) ceases to have effect before the project is registered (subclauses 53(1) and (2)). This is appropriate, as all registered biodiversity projects would be required to be covered by a methodology determination.

 

379.    The rule would be able to provide for the Regulator to notify the applicant that the Regulator proposes to refuse the application on the basis that the methodology determination specified in the application has ceased to have effect. The rules would also be able to provide for the Regulator to give the applicant an opportunity to either withdraw or vary the application before the Regulator refuses the application. Where an application is withdrawn in such circumstances and a fee has been paid in relation to the application, the Regulator would be required, on behalf of the Commonwealth, to refund the application fee (subclauses 53(3) and (4)).

 

380.    The rules would also, for example, be able to detail the requirements of the Regulator in relation to notification or the timeframe in which an eligible person may nominate withdrawal or variation of an application, or how a fee would be refunded. It is appropriate that these requirements be provided in the rules, as it may be necessary to tailor different requirements to different kinds of methodology determinations or biodiversity projects. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

Subdivision D - Advice about making, varying or revoking methodology determinations

Clause 54 - Advice by the Nature Repair Market Committee

381.    Clause 54 would set out requirements that apply to the Nature Repair Market Committee when the Minister requests the Committee’s advice on whether the Minister should make, vary or revoke a methodology determination (under, respectively, subclauses 47(2), 48(3) or 51(2) of the Bill).

 

382.    The requirements in this clause would need to be read in conjunction with the additional requirements in clause 56 of the Bill (concerning public consultation) - which would also apply to the Committee’s advice to the Minister whether to make or vary a methodology determination. This would be referenced in the note following subclause 54(2).

 

383.     Subclause 54(2) would require the Nature Repair Market Committee to give the requested advice to the Minister. This means that the Committee would not have any discretion in whether to provide advice on making, varying or revoking a methodology determination if requested by the Minister to do so.

 

384.    In providing the requested advice to the Minister, the Committee would be able to obtain advice from other persons with expertise relevant to the functions of the Committee (see clause 196).

 

385.    Subclauses 54(3) to (5) would require Committee to include certain matters in their advice.

 

386.    Under subclauses 54(3) and (4), where the advice concerns whether the Minister should make or vary a methodology determination, the Committee would be required to include the following matters in their advice:

 

·          if the Committee is satisfied that the proposed determination (or the determination as proposed to be varied) complies with each of the biodiversity integrity standards - a statement to that effect, the reasons why the Committee is so satisfied, and any dissenting opinions by Committee members (and the reasons thereof);

 

·          if the Committee is not satisfied that the proposed determination (or the determination as proposed to be varied) complies with each of the biodiversity integrity standards - a statement to that effect and the reasons why the Committee is not satisfied;

 

·          any other information required by the rules.

 

387.    Under subclause 54(5), where the advice concerns whether the Minister should revoke a methodology determination, the Committee would be required to include in their advice a statement setting out the Committee’s opinion about whether the determination should be revoked, the reasons for the opinion and any other matters required by the rules.

 

388.    As noted above, clauses 47 and 48 would have the effect that the Minister would only be able to make or vary a methodology determination if (relevantly) the Committee has included a statement in its advice to the effect that the Committee is satisfied that the proposed determination (or the determination as proposed to be varied) complies with the biodiversity integrity standards. In addition, clauses 47, 48 and 51 would require the Committee’s advice to be published on the Department’s website. The requirement to include these statements and opinions, and the reasons for the statements and opinions, are intended to promote transparency around the Minister’s decision. This is because the public would be able to see the Committee’s views (and reasons for those views) and compare them to the Minister’s ultimate decision.

 

389.    Subclause 54(6) would set out the mandatory considerations for the Committee when giving advice to the Minister concerning whether the Minister should make, vary or revoke a methodology determination. These matters would be:

 

·          the biodiversity integrity standards;

 

·          any relevant matters specified in a direction in force under clause 55;

 

·          any relevant advice given by the Regulator to the Committee;

 

·          any other matters required by the Rules.

 

390.    Subclause 54(7) would clarify that subclause 54(6) would not limit the matters to which the Committee may have regard when giving the requested advice to the Minister. This means the Committee would also be able to consider other matters the Committee considers relevant.

Clause 55 - Additional matters for the Nature Repair Market Committee to take into account

391.    Clause 55 would allow the Minister, by legislative instrument, to direct the Nature Repair Market Committee to have regard to one or more specified matters when giving advice about the making, varying or revoking of a methodology determination.

 

392.    The purpose of enabling such directions is so that the Minister can be assured that the Nature Repair Market Committee are considering all relevant matters when providing their advice, including matters that may only be relevant to a particular methodology determination (or a particular class of methodology determinations). This might include requiring the Committee to have regard to matters such as potential adverse social, environmental, cultural or economic impacts, or the consistency of the proposed methodology determination with broader government policy and programs.

 

393.    As it would be in the form of a legislative instrument, any such directions would be transparent and publicly available.

 

394.    The note following clause 55 would explain that a legislative instrument made for the purposes of clause 55 would not be subject to disallowance or sunsetting under the Legislation Act. This is because legislative instruments that are directions are:

 

·          exempt from disallowance by Parliament under item 12 of the table in section 9 of the Legislation (Exemption and Other Matters) Regulation 2015 (LEOM Regulation); and

 

·          exempt from sunsetting under item 3 of the table in section 11 of the LEOM Regulation.

Subdivision E - Consultation by the Nature Repair Market Committee

Clause 56 - Consultation by the Nature Repair Market Committee

395.    Clause 56 would set out the public consultation requirements for the Nature Repair Market Committee relating to methodology determinations.

 

396.    Subclauses 56(1) and (2) would have the combined effect that the Committee would only be able to advise the Minister whether to make or vary a methodology determination if the Committee has first:

 

·          published on the Department’s website a detailed outline of the proposed determination or variation (as the case may be) and a notice inviting the public to make a submission to the Committee on the detailed outline within a specified period of at least 28 days after the notice is published; and

 

·          considered any relevant submissions that were received in the specified period.

 

397.    However, the Committee would have the power to shorten the time period to no less than 14 days if it considers doing so appropriate in the circumstances (subclause 56(3)).

 

398.    Consultation on proposed methodology determinations or variations to methodology determinations would allow issues to be raised by stakeholders, scientific experts and landholders and incorporated into the Committee’s advice and the final determinations, where appropriate.

 

399.    The Committee would be required to publish, on the Department’s website, any relevant submissions received in response to a notice under subclause 56(1) (subclause 56(4)).

 

400.    However, under subclauses 56(5) and (6), the Committee would be required to not publish a particular submission if satisfied that publication could reasonably be expected to substantially prejudice biodiversity or indigenous cultural heritage. The Committee would be able to exercise this power unilaterally or on the request of the person making the submission. Any such request would be required to be made in writing and in a form approved, in writing, by the Committee (subclause 56(7)).

Division 3 - Biodiversity integrity standards

Clause 57 - Biodiversity integrity standards

401.    Clause 57 would set out the biodiversity integrity standards.

 

402.    The biodiversity integrity standards are intended to ensure that, through its methodology determinations, the scheme under the Bill only rewards genuine and verifiable protection or enhancement of biodiversity in native species (including by requiring additionality) - so that certificates are only issued for biodiversity protection or enhancement that would not normally have occurred and, therefore, provides a genuine environmental benefit.

 

403.    As noted above, the reference to biodiversity in native species is intended to include diversity within and between native species as well as diversity of ecosystems on which native species depend upon and inhabit. The purpose of referring to biodiversity in native species is to clarify that projects are not to be focused on the enhancement or protection of non-native species.

 

404.    The Minister would only be able to make or vary a methodology determination if, among other things, the Committee provides advice that includes a statement that it is satisfied that the proposed determination (or varied determination) complies with the biodiversity integrity standards (see clauses 47 and 48).

 

405.    There would be ten biodiversity integrity standards that a methodology determination would need to comply with, falling into three separate categories: integrity standards relating to project design and delivery, integrity standards relating to biodiversity assessment, and integrity standards relating to biodiversity information on the register and certificates.

Integrity standards relating to project design and delivery

406.    The first group of integrity standards require that methodology determinations will ensure that projects carried out in accordance with the methodology determination are designed to deliver, or prevent, certain outcomes.

 

407.    Delivering biodiversity outcomes : the first biodiversity integrity standard would be that a biodiversity project carried out in accordance with the methodology determination must be designed to result in enhancement or protection of biodiversity in native species (whether the effect on biodiversity occurs within or outside the project area) that would be unlikely to occur if the project is not carried out (paragraph 57(1)(a)).

 

408.    The purpose of this standard is to ensure that methodology determinations require projects to demonstrate that the project is designed to deliver biodiversity outcomes that would not have happened anyway. It is expected that the interpretation of this standard would vary depending on the nature of the methodology. More evidence of outcomes being additional would be expected for some methodologies.

 

409.    Matters that could be considered under this standard include that activities leading to biodiversity outcomes would need to go beyond what would normally be expected, that the project is only being carried out due to the incentive provided by the scheme, or that the project will provide an incentive to undertake activities to maintain or improve existing biodiversity that have not been financially viable before.

 

410.    The market has been designed to enable carbon credits and biodiversity certificates to be generated from the same project area (‘stacked’). Multiple biodiversity projects may also be undertaken on the same area of land, if they are associated with new activities delivering additional biodiversity outcomes. In practice, to meet this standard, methodology determinations would need to demonstrate that projects consistent with that methodology determination would only assess and describe biodiversity outcomes generated by that project, as distinct from other projects on the same area (i.e. avoid ‘double-counting’).

 

411.    Preventing adverse impacts : The second biodiversity integrity standard would be that a biodiversity project carried out in accordance with the methodology determination must be designed to prevent the project from having a significant adverse impact on biodiversity in a native species that is protected under a Commonwealth law or a relevant State or Territory law (paragraph 57(1)(b)).

 

412.    The purpose of this standard is to ensure that methodology determinations do not allow one kind of native species to be protected at the expense of another kind of native species that is protected under Australian law. For example, the methodology determination could not allow activities that focused on the protection of flying foxes if the result would be a significant adverse impact on a local koala population.

 

413.    Appropriate to the project area : The third biodiversity integrity standard would be that a biodiversity project carried out in accordance with the methodology determination must be designed to achieve enhancement or protection of biodiversity in native species that is appropriate to the project area (paragraph 57(1)(c)).

 

414.    The purpose of this standard is to ensure that methodology determinations do not allow projects to be directed at protecting or enhancing biodiversity in inappropriate habitats for the native species involved. For example, a methodology determination would not comply with this standard if it permitted a project directed at enhancing habitat for koalas by planting woodland species where a rainforest previously existed.

 

415.    A methodology determination may not comply with this standard if it did not consider how climate change is likely to impact biodiversity in the project area and require projects to be designed to account for this where appropriate. This may include a requirement in certain areas or for certain ecosystem types to collect genetically diverse material for use in revegetation to enhance a species’ adaptive potential.

Integrity standards relating to biodiversity assessment

416.    Measurable and verifiable : The fourth biodiversity integrity standard would be that a biodiversity project carried out in accordance with the methodology determination must be designed to achieve enhancement or protection that is of biodiversity in native species and that can be measured, assessed or verified (paragraph 57(1)(d)). The purpose of this standard is to ensure that methodology determinations require projects to be able to appropriately measure, assess and verify the progress towards the project’s intended biodiversity outcomes.

 

417.    Informed assessment : The fifth, sixth and seventh biodiversity integrity standards would relate to conditions set out in, or requirements imposed by, the methodology determination in accordance with subclauses 45(5) and (6) of the Bill. These conditions and requirements would relate to the measurement or assessment of the enhancement or protection of biodiversity and:

 

·          for conditions - would need to be met by projects in order for the project to be registered, for an application for a biodiversity certificate to be made for the project, and for a biodiversity certificate to be issued for the project;

 

·          for requirements - would involve notification requirements, reporting requirements and monitoring requirements.  

 

418.    Paragraph 57(1)(e) would require any conditions or requirements included in the methodology determination to:

 

·          be supported by clear and convincing evidence. This may include evidence from a broad range of sources such as (but not limited to) Indigenous knowledge, peer reviewed scientific literature, the most up to date and best-practice guidelines, principles, standards, statutory documents (such as threat abatement plans, recovery strategies and conservation advices), scientific data, expert elicitation processes and documented expertise of practitioners in biodiversity enhancement and protection;

 

·          so far as reasonably practicable, be consistent with relevant Indigenous knowledge and values relating to biodiversity and cultural heritage;

 

·          be consistent with enhancement or protection of biodiversity that is appropriate to the project area;

 

·          enable, as appropriate, adaptive management to achieve the enhancement or protection of biodiversity. An example of adaptive management is including project level monitoring requirements and associated triggers for modifying activities when restoration is not proceeding as planned;

 

·          require a clear indication of the level of certainty and confidence of achievement of the enhancement or protection of biodiversity. Confidence generally relates to the validity of a finding, based on the type, amount, quality, and consistency across multiple sources of evidence (e.g. theory, data, models, expert judgment, practitioner advice, traditional ecological knowledge) and the degree of agreement. Confidence is usually expressed qualitatively. In contrast, certainty generally relates to quantified measures of uncertainty, for example the likelihood of something occurring. This could be based on a range of evidence including statistical analysis of observations or model results, or expert judgment.

 

419.    Transparent assumptions: Paragraphs 57(1)(f) and (g) would have the effect that, to the extent that any condition or requirement imposed by the methodology determination involves an estimate or projection, the methodology determination must require the estimate to be conservative, and must also require the disclosure of the assumptions and methods used to make the estimate or projection and the level of certainty of the estimate or projection.

 

420.    The purpose of the standards in paragraphs 57(1)(e), (f) and (g) is to ensure that conditions and requirements relating to the enhancement or protection of biodiversity that are imposed on projects covered by the methodology determination are evidence based, appropriate, transparent and likely to result the biodiversity outcome for the project being achieved (so that the project provides a genuine environmental benefit).

Integrity standards relating to biodiversity information on the register and certificates

421.    Evidence-based statements: The eighth and ninth biodiversity integrity standards would relate to any statements or information that could be included in an entry in the Register, or in a biodiversity certificate issued, for a project covered by the methodology determination. Paragraph 57(1)(h) would require a methodology determination to ensure that such statements or information would be supported by clear and convincing evidence. As noted above, this may include evidence from a broad range of sources such as (but not limited to) Indigenous knowledge, peer reviewed scientific literature, the most up to date and best-practice guidelines, principles, standards, statutory documents (such as threat abatement plans, recovery strategies and conservation advices), scientific data, expert elicitation processes and documented expertise of practitioners in biodiversity enhancement and protection.

 

422.    Reasonably certain: Paragraph 57(1)(i) would have the effect that, to the extent that any such statements or information would involve an estimate, projection or assumption, the methodology determination would need to ensure that the estimate, projection or assumption would be reasonably certain.

 

423.    The standards at paragraphs 57(1)(h) and (i) are intended to ensure that the Register and biodiversity certificates only contain information about projects that is evidence-based and that is not based on unsupported or unreasonable estimates, projections or assumptions. This is so participants can have confidence in the market and in the protection or enhancement of biodiversity provided by the project.

 

424.    The tenth biodiversity integrity standard would be that the methodology determination meets any other standards that are prescribed by the rules. It is appropriate that the Bill provides for additional biodiversity integrity standards to be set out in the rules (paragraph 57(1)(j)). This is because advances in technology over the length of projects (which could last for many decades) may necessitate further standards be added in the future to ensure integrity is maintained.

 

425.    Subclause 57(2) would clarify that the rule-making power in paragraph 57(1)(j) would not be limited by the other paragraphs in subclause 57(1).

Division 4 - Biodiversity assessment instruments

Subdivision A - Making of biodiversity assessment instruments

Clause 58 - Biodiversity assessment instruments

426.    Clause 58 would allow the Minister, by legislative instrument, to prescribe requirements that methodology determinations must comply with (subclause 58(1)). An instrument made for the purposes of subclause 58(1) would be known as a biodiversity assessment instrument (subclause 58(2)).

 

427.    The purpose of a biodiversity assessment instrument is to achieve appropriate consistency in how methodology determinations measure and assess biodiversity (including both a baseline and changes in biodiversity over time). This reflects the fact that a key policy for the design of the Bill is to provide a nationally consistent approach to measuring and assessing biodiversity - which will, among other things, enable market participants (e.g. potential buyers) to be able to compare projects developed under different methodology determinations in terms of the project’s impact (or likely impact) on biodiversity.

 

428.    Subclause 58(3) would make it clear that a biodiversity assessment instrument may prescribe requirements for methodology determinations relating to:

 

·          the measurement or assessment of biodiversity;

 

·          the measurement or assessment of the enhancement of biodiversity; or

 

·          the measurement or assessment of the protection of biodiversity.

 

429.    These would be non-exhaustive examples of potential requirements. It is intended that a biodiversity assessment instrument may include all or any of the following, as appropriate:

 

·          requirements relating to standard terminologies, measurements or interpretations. This might include standard terms and definitions (including how project attributes, and locations in a project area, are described) but might also include rules concerning the interpretation of broader concepts relating to biodiversity.

 

·          factors that must be considered when determining how biodiversity and changes in biodiversity in projects covered by a methodology determination will be measured and assessed;

 

·          requirements relating to the incorporation of documents (including environmental standards that relate to biodiversity or to specific elements of biodiversity) into a methodology determination. This could include the need to consider existing documents relating to biodiversity at a local or landscape level, such as regional natural resource management plans, Healthy Country Plans, threat abatement plans or bioregional plans;

 

·          requirements relating to how scientific uncertainty is dealt with in the methodology determination, in relation to measuring or assessing biodiversity;

 

·          requirements relating to the imposition of reporting, notification or monitoring requirements concerning biodiversity or changes in biodiversity for projects covered by the methodology determination. This may include standard reporting, notification or monitoring requirements relating to biodiversity or changes in biodiversity;

 

·          any other matter relating to the measurement or assessment of biodiversity, or the protection or enhancement of biodiversity, that the Minister considers appropriate.

 

430.    Subclause 58(4) would have the effect that a biodiversity assessment instrument may prescribe requirements that apply to all methodology determinations, or just to a specified class of methodology determinations.

 

431.    For example, it may be appropriate for a biodiversity assessment instrument to prescribe standard terminologies, interpretation or factors that are required to be used in methodology determinations dealing with water-based projects, but that are not appropriate to apply for land-based projects. Alternatively, other requirements relating to the measurement or assessment of biodiversity may be appropriate to apply to all methodology determinations.

 

432.    Subclause 58(5) would clarify that subclause 58(4) would not, by implication, limit subsection 33(3A) of the AI Act. Subsection 33(3A) of the AI Act relevantly provides that when an Act power to make a legislative instrument with respect to particular matters, the power shall be construed as including a power to make such an instrument with respect to some only of those matters, or with respect to a particular class or particular classes of those matters, and to make different provision with respect to different matters or different classes of matters.

 

433.    It is intended that a biodiversity assessment instrument would guide the development of the information in the methodology determination (or a class of methodology determinations) that defines the attributes of a project relating to biodiversity and, potentially, the information that is included on the Register or in a biodiversity certificate relating to biodiversity. It would provide the emerging market with information they can have confidence in concerning the activities and outcomes of a project.

 

434.    As such, in combination with the biodiversity integrity standards (see clause 57), it would be a key measure for ensuring integrity in the scheme established by the Bill.

Clause 59 - Procedure for making a biodiversity assessment instrument

435.    Clause 59 would set out the procedure that the Minister must follow when making a biodiversity assessment instrument.

 

436.    Before making a biodiversity assessment instrument, the Minister would be required to request advice from the Nature Repair Market Committee about whether the Minister should make the instrument (subclause 59(2)).

 

437.    The note following subclause 59(2) would explain that the Nature Repair Market Committee would be required to have regard to certain matters in giving advice to the Minister and refers the reader to clause 64 of the Bill which deals with these matters.

 

438.    The combined effect of paragraph 59(1)(a) and subclause 59(3) is that the Minister would only be able to make a biodiversity assessment instrument if each of the following criteria are met:

 

·          the Nature Repair Market Committee has given the Minister advice in relation to the proposed instrument that includes a statement to the effect that the Committee is satisfied that the instrument:

 

                                                  i.        is an appropriate means of achieving consistency of methodology determinations (or methodology determinations in a particular class); and

 

                                                ii.       would assist in ensuring that methodology determinations (or methodology determinations in that class) comply with the biodiversity integrity standards; and

 

·          the Minister has had regard to the Committee’s advice.

 

439.    In other words, the critical issue for making a biodiversity assessment instrument would be whether the proposed instrument is an appropriate means of achieving consistency of methodology determinations, and would assist in ensuring that methodology determinations comply with the biodiversity integrity standards. The biodiversity integrity standards would be set out in clause 57 of the Bill.

 

440.    In addition to the mandatory requirements set out above, when deciding whether to make a biodiversity assessment instrument, paragraph 59(1)(b) would have the effect that the Minister would also be able to have regard to any other matters the Minister considers relevant. 

 

441.    This would allow the Minister to take account of advice received from persons other than the Nature Repair Market Committee where relevant and appropriate.

 

442.    Subclause 59(4) would require the Minister to cause a copy of any advice received from the Nature Repair Market Committee to be published on the Department’s website as soon as practicable after the Minister decides to make, or not make, a biodiversity assessment instrument. This requirement would ensure there is appropriate transparency in relation to the Minister’s decision.

 

443.    Subclauses 59(5) and (6) would have the combined effect that if the Minister decides to make a biodiversity assessment instrument, the Minister would be required to prepare a statement of reasons for that decision, and publish the statement of reasons on the Department’s website, as soon as practicable after making the decision. These requirements would ensure greater transparency about the Minister’s decision.

 

444.    Subclause 59(7) would clarify that subsection 33(3) of the AI Act does not apply to a biodiversity assessment instrument. Subsection 33(3) of the AI Act has the effect that where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules and determinations) the power shall be construed as including a power to vary or revoke that instrument, in like manner and subject to like conditions.  This means that the instrument maker would be required to comply with the same pre-conditions as for making the instrument in the first place.

 

445.    The effect of subclause 59(7) would be to turn off this power for varying or revoking a biodiversity assessment instrument. This is because the Bill would contain express powers and requirements to vary and revoke a methodology determination (clauses 60, 61 and 62).

 

446.    The note following subclause 59(7) would refer the reader to subdivisions B and C of Division 4 of Part 4, which deal with varying and revoking a biodiversity assessment instrument.

 

 

 

Subdivision B - Variation of biodiversity assessment instruments

Clause 60 - Variation of biodiversity assessment instruments

447.    Clause 60 would make it clear that the Minister would be able, by legislative instrument, to vary a biodiversity assessment instrument.

 

448.    The purpose of including an express variation power is to ensure that variations are not required to be subject to the ‘in like manner and subject to like conditions’ requirement in subsection 33(3) of the AI Act. Instead, the requirements of which the Minister must satisfied to vary a biodiversity assessment instrument would be set out in clause 61.

Clause 61 - Procedure for varying a biodiversity assessment instrument

449.    Clause 61 would set out the procedure that the Minister must follow when varying a biodiversity assessment instrument.

 

450.    Similar to the procedure for making a biodiversity assessment instrument, before varying a biodiversity assessment instrument the Minister would be required to request advice from the Nature Repair Market Committee about whether the Minister should vary the instrument (subclause 61(2)).

 

451.    The first note following subclause 61(2) would explain that the Nature Repair Market Committee would be required to have regard to certain matters in giving advice to the Minister and refers the reader to clause 64 of the Bill which deals with these matters.

 

452.    The exception to this requirement is minor variations, for which no advice from the Committee is required (see subclause 61(7)). This is explained in the second note following subclause 61(7).

 

453.    The combined effect of paragraph 61(1)(a) and subclause 61(3) is that the Minister would only be able to vary a biodiversity assessment instrument if both of the following criteria are met:

 

·          the Nature Repair Market Committee has given the Minister advice in relation to the proposed variation that includes a statement to the effect that the Committee is satisfied that the instrument (as varied):

 

                                                  i.        is an appropriate means of achieving consistency of methodology determinations (or methodology determinations in a particular class); and

 

                                                ii.       would assist in ensuring that methodology determinations (or methodology determinations in that class) comply with the biodiversity integrity standards; and

 

·          the Minister has had regard to the Committee’s advice.

 

454.    Again, these requirements would not apply to minor variations (see subclause 61(7)).

 

455.    In other words, the critical issue for varying a biodiversity assessment instrument (other than a minor variation) would be whether the proposed instrument is an appropriate means of achieving consistency of methodology determinations, and would assist in ensuring that methodology determinations comply with the biodiversity integrity standards. This aligns with the process for making a biodiversity assessment instrument under clause 59. The biodiversity integrity standards would be set out in clause 57 of the Bill.

 

456.    In addition to the mandatory requirements set out above, when varying a biodiversity assessment instrument, the Minister would also be able to have regard to any other matters the Minister considers relevant (paragraph 61(1)(b)). 

 

457.    This would allow the Minister to take account of advice received from persons other than the Nature Repair Market Committee where relevant and appropriate.

 

458.    Subclause 61(4) would require the Minister to cause a copy of any advice received from the Nature Repair Market Committee to be published on the Department’s website as soon as practicable after the Minister decides to vary, or not to vary, a biodiversity assessment instrument. This requirement would ensure there is appropriate transparency in relation to the Minister’s decision.

 

459.    Again, these requirements would not apply to minor variations (see subclause 61(7)).

 

460.    Subclauses 61(5) and (6) would have the combined effect that if the Minister decides to vary a biodiversity assessment instrument, the Minister would be required to prepare a statement of reasons for that decision, and publish the statement of reasons on the Department’s website, as soon as practicable after making the decision. These requirements would ensure greater transparency about the Minister’s decision.

 

461.    Subclause 61(7) would provide that the requirements in subclauses 61(2) to (5) would not apply to a minor variation of a biodiversity assessment instrument. It is intended that a minor variation would generally be a variation that results in no substantive change to the determination - for example, to correct a typographical error. In such circumstances, the requirements in subclauses 61(2) to (5) are considered unnecessary and inappropriate.

Subdivision C - Revocation of biodiversity assessment instruments

Clause 62 - Revocation of biodiversity assessment instruments

462.    Clause 62 would make it clear that the Minister would be able, by legislative instrument, to revoke a biodiversity assessment instrument.

 

463.    The purpose of including an express revocation power is to ensure that revocations are not required to be subject to the ‘in like manner and subject to like conditions’ requirement in subsection 33(3) of the AI Act. Instead, the requirements of which the Minister must be satisfied to revoke a biodiversity assessment instrument would be set out in clause 63.

Clause 63 - Procedure for revoking a biodiversity assessment instrument

464.    Clause 63 would set out the requirements for the Minister when deciding whether to revoke a biodiversity assessment instrument under clause 62.

 

465.    Before the Minister revokes a biodiversity assessment instrument, the Minister would be required to:

 

·          request and receive advice from the Nature Repair Market Committee about whether the Minister should revoke the instrument (subclause 63(2) and (3)); and

 

·          have regard to certain matters, being the advice given by the Nature Repair Market Committee on whether the Minister should revoke the instrument and any other matters the Minister considers relevant (subclause 63(1)).

 

466.    Subclause 63(4) would have the effect that, regardless of whether the Minister decides to revoke or not revoke the biodiversity instrument, the Minister would be required, as soon as practicable after making the decision, to cause a copy of the Committee’s advice to be published on the Department’s website. This requirement would ensure there is appropriate transparency in relation to the Minister’s decision.

 

467.    Subclauses 63(5) and (6) would have the combined effect that if the Minister decides to revoke a biodiversity assessment instrument, the Minister would be required to prepare a statement of reasons for that decision, and publish the statement of reasons on the Department’s website, as soon as practicable after making the decision. These requirements would ensure greater transparency about the Minister’s decision.

Subdivision D - Advice about making, varying or revoking biodiversity assessment instruments

Clause 64 - Advice by the Nature Repair Market Committee

468.    Clause 64 would set out requirements that apply to the Nature Repair Market Committee when the Minister requests the Committee’s advice on whether the Minister should make, vary or revoke a biodiversity assessment instrument (under, respectively, subclauses 59(2), 61(2) or 63(2) of the Bill).

 

469.    The requirements in this clause would need to be read in conjunction with the additional requirements in clause 65 of the Bill (concerning public consultation) - which would also apply to the Committee’s advice to the Minister whether to make or vary a biodiversity assessment instrument. This would be referenced in the note following subclause 64(2).

 

470.    Subclause 64(2) would require the Nature Repair Market Committee to give the requested advice to the Minister. This means that the Committee would not have any discretion in whether to provide advice on making, varying or revoking a biodiversity assessment instrument if requested by the Minister to do so.

 

471.    In providing the requested advice to the Minister, the Committee would be able to obtain advice from other persons with expertise relevant to the functions of the Committee (see clause 196).

 

472.    Subclauses 64(3) to (5) would require the Committee to include certain matters in their advice.

 

473.    Under subclauses 64(3) and (4), where the advice concerns whether the Minister should make or vary a biodiversity assessment instrument, the Committee would be required to include the following matters in their advice:

 

·          if the proposed instrument (or the instrument as proposed to be varied) applies generally - a statement to the effect that the Committee is satisfied that the proposed instrument (or the instrument as proposed to be varied) is an appropriate means of achieving consistency of methodology determinations, and would assist in ensuring that methodology determinations comply with the biodiversity integrity standards;

 

·          if the instrument (or the instrument as proposed to be varied) applies to a class of methodology determinations - a statement to the effect that the Committee is satisfied that the proposed instrument (or the instrument as proposed to be varied) is an appropriate means of achieving consistency of methodology determinations in that class, and would assist in ensuring that methodology determinations in that class comply with the biodiversity integrity standards;

 

·          any other information required by the rules.   

 

474.    Under subclause 64(5), where the advice concerns whether the Minister should revoke a biodiversity assessment instrument, the Committee would be required to include in their advice a statement setting out the Committee’s opinion about whether the instrument should be revoked, the reasons for the opinion and any other matters required by the rules.

 

475.    As noted above, clauses 59 and 61 would have the effect that the Minister would only be able to make or vary a biodiversity assessment instrument if the Committee has included a statement in its advice to the effect that the Committee satisfied that the proposed instrument (or the instrument as proposed to be varied) is an appropriate means of achieving consistency of methodology determinations (or methodology determinations a particular class) and would assist in ensuring that methodology determinations (or methodology determinations in a particular class) comply with the biodiversity integrity standards. In addition, clauses 59, 61 and 63 would require the Committee’s advice to be published on the Department’s website. The requirement to include these statements and opinions, and the reasons for the statements and opinions, are intended to promote transparency around the Minister’s decision. This is because the public would be able to see the Committee’s views (and reasons for those views) and compare those views to the Minister’s ultimate decision.

 

476.    Subclause 64(6) would set out the mandatory considerations for the Committee when giving advice to the Minister concerning whether the Minister should make, vary or revoke a biodiversity assessment instrument. These matters would be:

 

·          the biodiversity integrity standards;

 

·          any relevant matters specified in a direction in force under clause 65A;

 

·          any relevant advice given by the Regulator to the Committee;

 

·          any other matters required by the rules.

 

477.    Subclause 64(7) would clarify that subclause 64(6) would not limit the matters to which the Committee may have regard when giving the requested advice to the Minister. This means the Minister would also be able to consider other matters the Minister considers relevant.

Clause 65 - Consultation by the Nature Repair Market Committee

478.    Clause 65 would set out the public consultation requirements for the Nature Repair Market Committee relating to biodiversity assessment instruments.

 

479.    Subclauses 65(1) and (2) would have the combined effect that the Committee would only be able to advise the Minister whether to make or vary a biodiversity assessment instrument if the Committee has first:

 

·          published on the Department’s website a detailed outline of the proposed determination or variation (as the case may be) and a notice inviting the public to make a submission to the Committee on the detailed outline within a specified period of at least 28 days after the notice is published; and

 

·          considered any relevant submissions that were received in the specified period.

 

480.    However, the Committee would have the power to shorten the time period to no less than 14 days if it considers doing so appropriate in the circumstances (subclause 65(3)).

 

481.    Consultation on proposed biodiversity assessment instruments or variations to biodiversity assessment instruments would allow issues to be raised by stakeholders and incorporated into the Committee’s advice, and the final instruments, where appropriate.

 

482.    The Committee would be required to publish, on the Department’s website, any relevant submissions received in response to a notice under subclause 65(1) (subclause 65(4)).

 

483.    However, under subclauses 65(5) and (6), the Committee would be required to not publish a particular submission if satisfied that publication could reasonably be expected to substantially prejudice biodiversity or Indigenous cultural heritage. The Committee would be able to exercise this power unilaterally or on the request of the person making the submission. Any such request would be required to be made in writing and in a form approved, in writing, by the Committee (subclause 65(7)).

Clause 65A - Additional matters for the Nature Repair Market Committee to take into account

484.    Clause 65A would allow the Minister, by legislative instrument, to direct the Nature Repair Market Committee to have regard to one or more specified matters when giving advice about the making, varying or revoking of a biodiversity assessment instrument.

 

485.    The purpose of enabling such directions is so that the Minister can be assured that the Nature Repair Market Committee are considering all relevant matters when providing their advice, including matters that may only be relevant to a particular biodiversity assessment instrument (or a particular class of biodiversity assessment instruments).

 

486.    As it would be in the form of a legislative instrument, any such directions would be transparent and publicly available.

 

487.    The note following clause 65A would explain that a legislative instrument made for the purposes of clause 65A would not be subject to disallowance or sunsetting under the Legislation Act. This is because legislative instruments that are directions are:

 

·          exempt from disallowance by Parliament under item 12 of the table in section 9 of the LEOM Regulation; and

 

·          exempt from sunsetting under item 3 of the table in section 11 of the LEOM Regulation.

PART 5 - BIODIVERSITY CERTIFICATES

GENERAL OUTLINE

488.    Part 5 of the Bill would establish biodiversity certificates, which would be a new form of tradeable personal property. It would set out the process and requirements for applying for and issuing biodiversity certificates for registered biodiversity projects, as well as provisions relating to the ownership and transfer of biodiversity certificates.

 

489.    A biodiversity certificate would only be able to be issued for a registered biodiversity project that is sufficiently progressed to have resulted in, or be likely to result in, the intended biodiversity outcome.

 

490.    The creation of biodiversity certificates would allow unique biodiversity outcomes associated with individual projects to be described according to a consistent set of attributes, with that information being made available to the market in a standardised way to inform purchasing decisions.

 

 

 

NOTES ON INDIVIDUAL CLAUSES

Division 1 - Introduction

Clause 66 - Simplified outline of this Part

491.    Clause 66 would provide a simplified outline of Part 5 of the Bill. The outline is not intended to be comprehensive and has been included to assist readers to understand the substantive provisions of Part 5, rather than to replace these provisions. It is intended that readers will rely on the substantive clauses of Part 5.

Division 2 - Issue of biodiversity certificates

Clause 67 - Application for biodiversity certificate

492.    Clause 67 would allow the project proponent of a registered biodiversity project to apply to the Regulator for the issue of a biodiversity certificate for the project.

 

493.    Subclause 67(2) would have the effect that an application for a biodiversity certificate could only be made if each of the following circumstances is satisfied:

 

·          a biodiversity certificate has not previously been issued in respect of the registered biodiversity project or, if a biodiversity certificate has previously been issued in respect of the registered biodiversity project, the Regulator has agreed that the application may be made;

 

                                                  i.       Generally, there would only be able to be one biodiversity certificate for each registered biodiversity project. However, in limited circumstances where a biodiversity certificate for a project has previously been relinquished and the project proponent can demonstrate that sufficient remediation activities have been taken to restore the biodiversity outcome for the project, the Regulator would be able to agree that an application for a new certificate can be made;

 

·          if the methodology determination that covers the project sets any conditions that must be satisfied before an application for a biodiversity certificate can be made - those conditions have been met;

 

·          if the methodology determination that covers the project sets a time that must pass before an application for a biodiversity certificate can be made - that time has passed;

 

·          if the rules set any additional conditions that must be satisfied before an application for a biodiversity certificate can be made - those conditions have been met.  

 

494.    The purpose of these requirements is to increase the likelihood that applications that are made will meet the criteria for issuing a biodiversity certificate in clause 70.

 

Clause 68 - Form of application

495.    Clause 68 would set out the requirements of an application made under clause 67 for the Regulator to issue a biodiversity certificate in respect of a registered biodiversity project.

 

496.    An application for a biodiversity certificate under clause 67 would be required to be in writing and to be in a form approved, in writing, by the Regulator (paragraphs 68(1)(a) and (b)).

 

497.    An application for a biodiversity certificate would also be required to be accompanied by the following information or documents (see subclauses 68(1)(c) to (i)):

 

·          any information or documents required by the rules or the methodology determination that covers the project;

 

·          a prescribed audit report prepared by a registered greenhouse and energy auditor - but only if required by the rules or the methodology determination that covers the project. The rules would set out the requirements of such a report (including the content). A registered greenhouse and energy auditor is appointed as such under the NGER Act;

 

·          the category A biodiversity project report mentioned in clause 101. This report must meet the requirements of clause 103 and must relate to a reporting period that begins when the project was registered and ends within 6 months before the application for a biodiversity certificate was made (see subclauses 101(2) and (3)). However, the category A biodiversity report would not be required to cover information that the project proponent has already given the Regulator in a category B biodiversity project report under clause 104;

 

·           the fee (if any) specified in the rules.

 

498.    Subclause 68(2) would have the effect that the approved application form would be able to require statements made in an application under clause 67 to be verified by statutory declaration.

 

499.    Subclause 68(3) would clarify that an application fee specified in the rules must not amount to taxation. This means that the amount of any fee specified for an application under clause 67 must be approximately reflect the cost to the Regulator of assessing the application.

 

500.    The requirements in clause 68 would ensure that the Regulator has sufficient information before it to decide whether to issue a biodiversity certificate for the project under clause 70.

 

 

Clause 69 - Further information

501.    Clause 69 would allow the Regulator to, by written notice, require the person who has applied for a biodiversity certificate in respect of a biodiversity project (the applicant) to provide further information in connection with the application within a specified period. The period within which the information is required to be provided must be specified in the notice.

 

502.    Subclause 69(2) would make it clear that if the applicant does not provide the required further information in the time period specified in the notice, the Regulator may refuse to consider, or to take any action or further action in relation to, the application.

 

503.    The purpose of this provision is to ensure that decisions on applications for a biodiversity certificate are made based on all relevant information.

Clause 70 - Issue of biodiversity certificate

504.    Clause 70 would deal with the Regulator’s decision whether to issue a biodiversity certificate in respect of a registered biodiversity project (on application by the project proponent for the project under clause 67).

 

505.    Subclause 70(2) would require the Regulator, if satisfied that the criteria at paragraphs 70(2)(a) to (h) are met, to issue a biodiversity certificate for the project to the applicant by making an entry in a Register account held by the applicant.

 

506.    Paragraph 70(2)(a) to (h) would set out the criteria of which the Regulator must be satisfied to issue a biodiversity certificate in respect of a registered biodiversity project. These criteria are:

 

·          that the applicant is a fit and proper person. The fit and proper person test would be set out in Part 8 of the Bill. This would be reflected in the first note following subclause 70(2), which would direct the reader to clauses 97 to 99A of the Bill;

 

·          that the applicant is the project proponent for the project (or, in the case of a project with multiple project proponents, a project proponent). The second note following subclause 70(2) would direct the reader to Part 3 of the Bill, which would deal with multiple project proponents;

 

·          where the registration is subject to a condition under clause 17 (obtaining regulatory approvals), 18 (obtaining eligible interest holder consents) or 18A (obtaining consent from the registered native title body corporate to the project being carried out in or on a native title area) - that the condition or conditions have been met;

 

·          that the project is sufficiently progressed to have resulted in, or be likely to result in, the biodiversity outcome for the project;

 

                                                  i.       this criterion would be a key integrity measure for projects that require a project plan, as it would ensure that biodiversity certificates are only issued for projects that have, or are likely to, result in an enhancement or protection of biodiversity.

 

                                                ii.       it is possible that this could occur relatively early in the project on the basis that the project is sufficiently progressed where there is high certainty and confidence in the projections underpinning the biodiversity outcome for the project (as defined in the methodology), and the nature of the reporting and adaptive management approaches committed to by the project proponent support a high likelihood of achieving the biodiversity outcome;

 

                                              iii.       the term biodiversity outcome would be defined in clause 7 of the Bill in relation to a biodiversity project to mean the enhancement or protection of biodiversity that the project is designed to achieve. The criterion in paragraph 70(2)(f) would generally require this outcome to have been, or to be likely to, be achieved before a biodiversity certificate could be issued.

 

·          any additional eligibility requirements required by the rules. It is appropriate that the rules be able to prescribe additional eligibility criteria to allow the scheme to tailor the criteria to different kinds of projects (where appropriate) and also to be able to respond to changing circumstances (including technological advances and changes in the environment);

 

·          any additional conditions required by the methodology determination that covers the project.

 

507.    A decision made under subclause 70(2) to issue, or refuse to issue, a biodiversity certificate for a registered biodiversity project would be a reviewable decision. The third note following subclause 70(2) would direct the reader to Part 20 of the Bill, which deals with reviewable decisions.

 

508.    Subclause 70(3) would require a biodiversity certificate to set out the matters (if any) that are specified in the rules. For instance, the rules may require the biodiversity certificate to set out matters such as the methodology determination that covers the project, the project’s location and the project’s permanence period. This, combined with the information on the Register, would ensure that persons seeking to purchase the certificate going forward would have sufficient information about the project and the certificate.

 

509.    Subclause 70(4) would require that the Regulator take all reasonable steps to ensure that a decision is made on an application to register a biodiversity project within 90 days after the application is made, or 90 days after requested further information has been given to the Regulator.

 

510.    Subclause 70(5) would require the Regulator to give written notice of a decision under subclause 70(2) (whether or not to issue a biodiversity certificate for a registered biodiversity project) to the applicant.

Clause 70A - Correction of biodiversity certificate

511.    Clause 70A would allow the Regulator to vary a biodiversity certificate in order to correct a minor or technical error in the certificate.

Clause 71 - Basis on which biodiversity certificates are issued

512.    Clause 71 would clarify that a biodiversity certificate would be issued on the basis of the following:

·          the certificate may be varied in accordance with rules made for the purposes of (respectively) paragraph 22(1)(k), subclause 34(12) or clause 70A;

 

·          the certificate may be required to be relinquished under Part 13;

 

·          the certificate may be cancelled under clauses 77 or 77A;

 

·          the certificate may be cancelled, revoked, terminated or varied, or be required to be relinquished, by or under later legislation; and

 

·          no compensation is payable if the certificate is so cancelled, revoked, terminated or varied, or required to be relinquished.

 

513.    It is appropriate to set out these parameters because a biodiversity certificate would otherwise be the personal property of the holder of the certificate. This provision would remove any doubt that, despite being personal property, a biodiversity certificate is subject to any relevant restrictions in legislation.

Division 3 - Property in biodiversity certificates

Clause 72 - A biodiversity certificate is personal property

514.    Clause 72 would make it clear that a biodiversity certificate issued to a person is personal property. As such, a biodiversity certificate is transmissible by assignment, by will and by devolution by operation of law.

 

515.    Clause 72 would be subject to the requirement in clause 74. Clause 74 would have the effect of preventing the transmission of a biodiversity certificate from taking legal effect until the certificate is transferred from an account in the Register held by the transferor to an account in the Register held by the transferee.

 

516.    This will ensure that the Register is the single source of truth regarding the ownership of biodiversity certificates, providing appropriate transparency to industry and the public.

Clause 73 - Ownership of biodiversity certificate

517.    Clause 73 deals with the ownership of a biodiversity certificate. Subclause 73(1) would make it clear that the holder of a biodiversity certificate would be the legal owner of the certificate and would, subject to this Bill, be able to deal with the certificate as its legal owner and give good discharges for any consideration for any such dealing.

 

518.    However, subclause 73(1) would only apply to a person who deals with the holder of the certificate in good faith for value and without notice of any defect in the title of the holder (subclause 73(2).

 

519.    Clause 73 is intended to provide certainty about the ownership of biodiversity certificates. It is also intended to provide protection for a person who is a bona fide purchaser of the biodiversity certificate and who does not have any notice of any defects in the title of the holder.

 

520.    Defects in title might arise, for example, if a biodiversity certificate was transferred in error and sold on by an unintended recipient before the error is detected, or transferred fraudulently in cases such as where evidence of a transmission by operation of law is false, or there is unauthorised access to a Register account. In such circumstances, clause 73 would ensure that bona fide purchasers who have no knowledge of the defect are not disadvantaged.

 

521.    The note following subclause 73(1) would explain that the holder of a biodiversity certificate is the person recorded in the Register as the holder of the certificate (see clause 7).

Clause 74 - Transmission of biodiversity certificates

522.    Clause 74 would have the effect of preventing the transmission of a biodiversity certificate from taking legal effect until the certificate is transferred from an account in the Register held by the transferor to an account in the Register held by the transferee.

 

523.    This will ensure that the Register is the single source of truth regarding the ownership of biodiversity certificates, providing appropriate transparency to industry and the public.

Clause 75 - Registration of equitable interests in relation to biodiversity certificates

524.    Clause 75 would have the effect that the rules would be able to make provision for or in relation to the registration in the Register of equitable interests in relation to biodiversity certificates. However, the rules would not be able to provide for an equitable interest that is a security interest within the meaning of the Personal Property Securities Act 2009 , and to which that Act applies.

 

525.    This means that the rules may, for example, define the equitable interests in relation to a biodiversity certificate that may be included in the Register and the process for doing so, including any application process. It is appropriate to prescribe such matters in the rules to ensure that the processes for different kinds of equitable interests can be properly tailored to meet the needs of each such kind of interest holder.

Clause 76 - Equitable interests in relation to biodiversity certificates

526.    Clause 76 would make it clear that the Bill does not affect the creation of, any dealings with, or the enforcement of, equitable interests in relation to a biodiversity certificate. This would be an avoidance of doubt provision.

Division 4 - Cancellation of biodiversity certificate at the end of the permanence period for a registered biodiversity project

Clause 77 - Cancellation of biodiversity certificate at the end of the permanence period for a registered biodiversity project

527.    Clause 77 would have the effect that a biodiversity certificates that is in force for a registered biodiversity project would be cancelled when the permanence period for the project ends. This is consistent with the project no longer being registered after the end of the permanence period.

 

528.    After a biodiversity certificate is cancelled, the Regulator would be required to remove it from the person’s Register account in which there is an entry in force or, if the biodiversity certificate is deposited with the Regulator under Part 12 of the Bill, from the Commonwealth Register account in which there is an entry for the certificate. This would ensure, for the purposes of transparency, that the Register reflects up to date information on biodiversity certificates that are in effect.   

 

529.    The note after clause 77 would refer the reader to subclause 162(5), which would allow the rules to make provision in the Register for former registered biodiversity projects.

Division 5 - Cancellation of biodiversity certificate if registration of registered biodiversity project is cancelled

Clause 77A - Cancellation of biodiversity certificate if registration of registered biodiversity project is cancelled

530.    Clause 77A would have the effect that any biodiversity certificates that are in force for a registered biodiversity project would be cancelled when the registration of that registered biodiversity project is cancelled.

 

531.    This provision is intended to cover the situation where a project’s registration is cancelled before the end of the permanence period for the project and there is a certificate in effect for that project. It is consistent with there being no further obligations to maintain the project after its registration is cancelled.

 

532.    After a biodiversity certificate is cancelled, the Regulator would be required to remove it from the person’s Register account in which there is an entry in force or, if the biodiversity certificate is deposited with the Regulator under Part 12 of the Bill, from the Commonwealth Register account in which there is an entry for the certificate. This would ensure, for the purposes of transparency, that the Register only reflects biodiversity certificates that are in effect.  

 

533.    The note after clause 77A would refer the reader to subclause 162(5), which would allow the rules to make provision in the Register for former registered biodiversity projects.

PART 6 - PURCHASE OF BIODIVERSITY CERTIFICATES BY THE COMMONWEALTH

GENERAL OUTLINE

534.    Part 6 of the Bill would provide for the purchase by the Secretary of biodiversity certificates issued under the Bill. It would also provide for the powers of the Secretary to enter into contracts on behalf of the Commonwealth and the treatment of biodiversity certificates once purchased.

 

535.    For the avoidance of doubt, Part 6 is not intended to prohibit the Commonwealth from using other purchasing arrangements, such as the Commonwealth Procurement Rules, to buy biodiversity certificates.

NOTES ON INDIVIDUAL CLAUSES

Division 1 - Introduction

Clause 78 - Simplified outline of this Part

536.    Clause 78 would provide a simplified outline of Part 6 of the Bill. The outline is not intended to be comprehensive and has been included to assist readers to understand the substantive provisions of Part 6, rather than to replace these provisions. It is intended that readers will rely on the substantive clauses of Part 6.

Division 2 - Biodiversity conservation contracts

Clause 79 - Biodiversity conservation contracts

537.    Clause 79 would provide that the Secretary may enter into contracts (known as biodiversity conservation contracts ), on behalf of the Commonwealth, for the purchase by the Commonwealth of biodiversity certificates.

 

538.    The Secretary would be able to enter into such contracts regardless of whether the biodiversity certificate in question is in existence at the time the contract is entered into.

 

539.    Where the Secretary enters into a biodiversity conservation contract with a person, the person would be a biodiversity conservation contractor .

 

540.    The use of a market approach to offer biodiversity conservation incentives is endorsed by Article 11 of the Biodiversity Convention.

Clause 80 - When biodiversity conservation contracts may be entered into

541.    Clause 80 would clarify when the Secretary would be able to enter into a biodiversity conservation contract.

 

542.    The Secretary would only be able to enter into a biodiversity conservation contract that is the result of a biodiversity conservation purchasing process (conducted by the Secretary under clause 84). This would ensure that the Secretary’s powers to enter into a biodiversity conservation contract are only exercised following a process that accorded with the principles in subclause 84(3) (including facilitating the Commonwealth receiving value for money when purchasing biodiversity certificates, and maximising the protection or enhancement of biodiversity that results from the process) are adhered to.

543.    In addition, the Secretary would only be permitted to enter into a contract where the biodiversity conservation contractor was a project proponent for a registered biodiversity project, or the holder of a biodiversity certificate.

544.    Subclause 80(3) would allow the rules to prescribe further circumstances in which the Secretary would not be permitted to enter into a biodiversity conservation contract. It is appropriate for the rules to set out additional circumstances as these circumstances could change over time in accordance with statutory and government policy.

Clause 81 - Secretary has powers etc. of the Commonwealth

545.    Clause 81 would have the effect that the Secretary, on behalf of the Commonwealth, would be conferred with the same rights, responsibilities, duties and powers as the Commonwealth, in relation to the Commonwealth’s legal capacity to be a party to a biodiversity conservation contract.

 

546.    These rights, responsibilities, duties and powers would include, but not be limited to, any of the following:

 

·          an amount payable by or to the Commonwealth under a biodiversity conservation contract would be paid by or to the Secretary on behalf of the Commonwealth; and

 

·          the Secretary would be able to institute an action or proceeding on behalf of the Commonwealth in relation to a matter that concerns a biodiversity conservation contract.

 

547.    It is intended that any amounts paid by the Secretary under a biodiversity conservation contract would come from annual appropriations made through the Federal Budget process.

Clause 82 - Conferral of powers on the Secretary

548.    Clause 82 would be an avoidance of doubt provision. It would confirm that the Secretary may exercise a power conferred on them by a biodiversity conservation contract.

 

549.    Biodiversity conservation contracts would be commercial contracts and include ordinary commercial terms and conditions such as conditions relating to non-performance or under delivery by the contractor. Clause 82 would ensure that such contractual terms can be enforced by the Secretary in the same way as by other persons who enter into commercial contracts.

 

 

 

Division 3 - Biodiversity conservation purchasing processes

Clause 83 - Biodiversity conservation purchasing process

550.    Clause 83 would define the term biodiversity conservation purchasing process, for the purposes of the Bill, as any of: a tender process, a reverse auction or any other process for the purchase of biodiversity certificates by the Commonwealth.

 

551.    Clause 83 would also make it clear that it is immaterial whether the certificates that are the subject of the purchase are in existence when the process is conducted.

Clause 84 - Conduct of biodiversity conservation purchasing process

552.    Clause 84 would have the effect that the Secretary, on behalf of the Commonwealth, would be able to conduct one or more biodiversity conservation purchasing processes. As noted above, a biodiversity conservation process would be defined in clause 83 as covering a tender process, a reverse auction or any other process for the purchase by the Commonwealth of biodiversity certificates.

 

553.    Under subclause 84(3), when conducting a biodiversity conservation purchasing process, the Secretary would be required to have regard to certain principles. These principles are:

 

·          facilitating the Commonwealth receiving value for money when purchasing biodiversity certificates;

 

·          maximising the protection or enhancement of biodiversity that results from the process;

 

·          conducting the process in a way that ensures both the integrity of the process and that administrative costs are reasonable;

 

·          encouraging competition; and

 

·          providing for fair and ethical treatment of all participants.

 

554.    These principles are tailored to the specific circumstances of purchasing biodiversity certificates in the emerging market established by this Bill. The intention is that they would replace the ordinary principles governing Commonwealth procurement under the Commonwealth Procurement Rules 2022 (CPRs). Clause 86 would turn off the CPRs for the purposes of the Secretary’s functions under clauses 79 and 84 of the Bill (concerning entering into a biodiversity conservation contract and conducting a biodiversity conservation purchasing process).

 

555.    For the avoidance of doubt, subclause 84(4) would clarify that a person being a project proponent for a project, or the holder of a biodiversity certificate, will not automatically entitle the person to participate in a biodiversity conservation purchasing process.

 

556.    The purchasing principles are not intended to prevent purchasing aimed at supporting specific biodiversity outcomes relating to such matters as habitat type or species protection.

Division 4 - Miscellaneous

Clause 85 - Rules may provide for certain matters relating to purchased biodiversity certificates

557.    Clause 85 would allow the rules to make provision for and in relation to the following matters in respect of biodiversity certificates purchased by the Commonwealth under biodiversity conservation contracts:

 

·          transferring purchased certificates to a specified Register account kept for the Commonwealth;

 

·          prohibiting or restricting the transfer of biodiversity certificates from such an account;

 

·          cancelling biodiversity certificates for which there are entries in such an account.

 

558.     Rules made for the purpose of this clause would allow for detailed requirements (including appropriate assurance processes) to be imposed to support the transferring and cancelling of certificates purchased by the Commonwealth. Such requirements may need to be tailored for different kinds of biodiversity projects and are likely to need to quickly evolve over time to respond to changing technology or other situations. For this reason, it is appropriate that such requirements be set out in rules, rather than the Bill itself.

Clause 86 - Certain instruments relating to Commonwealth procurement are not applicable

559.    Clause 86 would have the effect that an instrument made under section 105B of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) does not apply in relation to the Secretary’s functions and powers under clause 79 or 84 of the Bill (concerning entering into biodiversity conservation contracts and conducting biodiversity conservation purchasing processes). 

 

560.    The note following clause 86 explains that section 105B of the PGPA Act provides for the making of instruments relating to procurement. The current instrument made under section 105B is the CPRs. It is appropriate that the CPRs do not apply to the Secretary’s power to enter into a biodiversity conservation contract or to conduct a biodiversity conservation purchasing process because the purpose of the Secretary exercising these powers is to assist in growing the nature repair market to be established by this Bill, not to source goods or services for the Commonwealth. Accordingly, it is appropriate that the Secretary be instead required to comply with procurement principles that are tailored to the specific circumstances. These principles are set out in subclause 84(3) of the Bill.

Clause 87 - Biodiversity conservation contracts are not instruments made under this Act

561.    Clause 87 would be an avoidance of doubt provision. It would have the effect of confirming that a biodiversity conservation contract is taken not to be an instrument made under the Bill.

 

562.    This is appropriate as a biodiversity conservation contract would not be of legislative character. Instead, it would be a commercial agreement entered into by the Secretary (on behalf of the Commonwealth) and another person for the purchase of one or more biodiversity certificates.

PART 7 - INTERESTS IN LAND

GENERAL OUTLINE

563.    Part 7 of the Bill would set out the eligible interest holders for the purpose of the Bill. This would be relevant as the registration of a biodiversity project may be subject to a condition requiring the project proponent to obtain the consent of any eligible interest holders for the project area before a biodiversity certificate may be issued. Eligible interests would be in respect of Torrens system land and Crown land that is not Torrens system land and some land rights land.

 

564.    Part 7 would not deal with eligible interests in native title areas, as consent requirements for such areas (land and water) would be separately dealt with under paragraph 15(6)(b) and clause 18A of the Bill.

 

565.    This Part would also require the registration of certain kinds of biodiversity projects to be notified to the Crown lands Minister of the relevant State or Territory and recorded in certain title registers.

NOTES ON INDIVIDUAL CLAUSES

Division 1 - Introduction

Clause 88 - Simplified outline of this Part

566.    Clause 88 would provide a simplified outline of Part 7 of the Bill. The outline is not intended to be comprehensive and has been included to assist readers to understand the substantive provisions of Part 7, rather than to replace these provisions. It is intended that readers will rely on the substantive clauses of Part 7.

Division 2 - Eligible interest in an area of land

Clause 89 - Eligible interest in an area of land - Torrens system land

567.    Clause 89 would set out the persons who hold an eligible interest in relation to an area of land that is Torrens System land.

 

568.    If an eligible person wants to register a biodiversity project that is to be carried out on land for which a person holds an eligible interest, they would be required to obtain the eligible interest holder’s consent. The purpose of this requirement is to ensure that projects are not carried out on land without the consent of persons who have certain interests (including financial interests) in the land.

 

569.    Eligible interest holder consent would generally be obtained prior to registration of the project. For certain eligible interest holders (such as the owner of the land), consent to the project proponent carrying out the project as a registered biodiversity project would be required prior to registration (see paragraph 15(6)(a) of the Bill).

 

570.    However, where paragraph 15(6)(a) does not apply, the Regulator would be able to register the project subject to the condition that the project proponent obtain the required eligible interest holder consent post-registration (clause 18). The project proponent would not be able to apply for a biodiversity certificate for a registered biodiversity project unless all required eligible interest consents have been obtained (clause 67). In addition, if consent from all eligible interest holders has not been obtained within 5 years of the project being conditionally registered, the Regulator may be able to cancel the project’s registration (under rules made for the purpose of clause 26).

 

571.    In relation to an area of Torrens System land, each the following persons would hold an eligible interest for the purposes of the Bill:

 

·          a person who has a registered legal estate or interest in the area of land (subclause 89(2)). This means, for example, if a person holds an estate in fee simple in an area of land on which a biodiversity project is to be carried out, that person’s consent for the project would need to be obtained;

 

·          where there is a mortgage or charge over the area of land - the mortgagee (ie the lender) or the chargee (as the case may be) (subclause 89(3));

 

·          where the land is also Crown land (and is not an exclusive possession native title area or land rights land) - the Crown Lands Minister of the relevant State or Territory where the area of land is located (subclause 89(4));

 

·          where the land is also land rights land (and is not an exclusive possession native title area) and a lease is in force over the land that was granted under a Commonwealth law that makes provision for the grant of such leases only to, or for the benefit of, Aboriginal persons and Torres Strait Islanders - the Minister who administers the Commonwealth law under which the lease was granted (subclause 89(6));

 

·          where the land is also land rights land (and is not an exclusive possession native title area) and the land is held by the Commonwealth - the Minister who administers the Aboriginal Land Rights (Northern Territory) Act 1976 (subclause 89(6));

 

·          where the land is also land rights land (and is not an exclusive possession native title area) and the land is held by a Commonwealth statutory authority - the Minister who administers the Act that establishes the statutory authority (subclause 89(6));

 

·          where the land is also land rights land in a State or Territory that subclause 89(6) does not apply to (and is not an exclusive possession native title area - the Crown lands Minister of the relevant State or Territory (subclause 89(7));

 

·          where the rules provide for a person to hold an eligible interest in the area of land - that person (subclause 89(5)). For example, the rules could prescribe additional Indigenous-related interests to be eligible interests for the purposes of the Bill.

Clause 90 - Eligible interest in an area of land - Crown land that is not Torrens system land

572.    Clause 90 would set out the persons who hold an eligible interest in relation to an area of land that is Crown land, but not Torrens System land .

 

573.    The following persons would hold an eligible interest in relation to an area of land that is Crown land, but not Torrens System land:

 

·          where the Crown land is neither an exclusive possession native title area or land rights land - the Crown lands Minister of the relevant State or Territory where the land is located (subclause 90(2));

 

·          where a person (other than a State or Territory) holds a legal estate or interest in the whole or part of the area of Crown land, and the relevant estate or interest came into existence as a result of a grant by the Crown - the person who holds the legal estate or interest (subclause 90(3));

 

·          where a person (other than a State or Territory) holds a legal estate or interest in the whole or part of the area of Crown land, and the relevant estate or interest was derived from an estate or interest that came into existence as a result of a grant by the Crown - the person who holds the legal estate or interest (subclause 90(3));

 

·          where a person (other than a State or Territory) holds a legal estate or interest in the whole or part of the area of Crown land, and the relevant estate or interest was created by or under a Commonwealth, State or Territory law - the person who holds the legal estate or interest (subclause 90(3));

 

·          where a person (other than a State or Territory) holds a legal estate or interest in the whole or part of the area of Crown land, and the relevant estate or interest was derived from an estate or interest that was created by or under a Commonwealth, State or Territory law - the person who holds the legal estate or interest (subclause 90(3));

 

·          where there is a mortgage or charge over the area of Crown land - the mortgagee (ie the lender) or the chargee (as the case may be) (subclause 90(4));

 

·          where the Crown land is also land rights land (and is not an exclusive possession native title area) and a lease is in force over the land that was granted under a Commonwealth law that makes provision for the grant of such leases only to, or for the benefit of, Aboriginal persons and Torres Strait Islanders - the Minister who administers the Commonwealth law under which the lease was granted (subclause 90(6));

 

·          where the Crown land is also land rights land (and is not an exclusive possession native title area) and the land is held by the Commonwealth - the Minister who administers the Aboriginal Land Rights (Northern Territory) Act 1976 (subclause 90(6));

 

·          where the Crown land is also land rights land (and is not an exclusive possession native title area) and the land is held by a Commonwealth statutory authority - the Minister who administers the Act that establishes the statutory authority (subclause 90(6));

 

·          where the Crown land is also land rights land in a State or Territory that subclause 90(6) does not apply to (and is not an exclusive possession native title area or freehold land rights land)- the Crown lands Minister of the relevant State or Territory (subclause 90(7));

 

·          where the rules provide for a person to hold an eligible interest in the area of Crown land - that person (subclause 90(5)). For example, the rules could prescribe additional indigenous-related interests to be eligible interests for the purposes of the Bill.

Clause 92 - Eligible interest on an area of land - Aboriginal land council

574.    Clause 92 would have the effect that an Aboriginal land council holds an eligible interest in an area of land if it successfully makes a claim under Commonwealth, State or Territory law for the area of land to become land rights land (within the meaning of the relevant Commonwealth, State or Territory law). The term Aboriginal land council would be defined in clause 7 of the Bill.

 

575.    The purpose of clause 92 is to ensure that biodiversity projects are not carried out on land rights land without the full and informed consent of the relevant Aboriginal land council. It would also ensure that the relevant Aboriginal land council is an eligible interest holder from the time they successfully make a claim for the land to become land rights land, even where there is a delay between the claim succeeding and being registered on the relevant land title.

 

576.    This is consistent with the objects of the Bill, which relevantly provide that the Bill aims to promote the engagement and cooperation of Aboriginal persons and Torres Strait Islanders in the enhancement or protection of biodiversity in native species in Australia.

 

 

Division 3 - Freehold land rights land

Clause 93 - Regulator to notify Crown lands Minister of approval of registration of biodiversity project

577.    Where the Regulator approves the registration of a biodiversity project that has a project area that is both wholly or partly freehold land rights land in a particular State or Territory and is wholly or partly Crown land, clause 93 would require the Regulator to notify the Crown lands Minister of the relevant State or Territory of the approval. The notification would need to be made as soon as practicable after giving the approval.

 

578.    The notification requirement in clause 93 would not apply if the project area is partly Torrens system land. This is because the Regulator would already be required to notify the relevant land registration official of the State or Territory of the approval (see clause 15).

Division 4 - Entries in title registers

Clause 94 - Entries in title registers - general

579.    Clause 94 would clarify that a relevant land registration official would be able to make such entries or notations in or on registers or other documents kept by the official as the official thinks appropriate for the purpose of drawing the attention of persons to the existence of a registered biodiversity project, the fact that requirements may arise under the Bill in respect of such a project and any other matters relating to the Bill as the official considers appropriate.

 

580.    The relevant land registration official would be a land registration official in the State or Territory in which the project area (or part of the project area) is located (see clause 7).

 

581.    The purpose of making such entries or notations is to ensure that persons in the future who have an interest in the land are aware of the project and any consequences for the land holder thereof.

Clause 95 - Entries in title registers - biodiversity maintenance areas

582.    Clause 95 would clarify that a relevant land registration official would be able to make such entries or notations in or on registers or other documents kept by the official as the official thinks appropriate for the purpose of drawing the attention of persons to the existence of a biodiversity maintenance declaration that applies to the land under the Bill.

 

583.    The purpose of making such entries or notations is to ensure that persons in the future who have an interest in the land are aware of the declaration and any consequences for the land holder thereof.

PART 8 - FIT AND PROPER PERSON TEST

GENERAL OUTLINE

584.    Part 8 of the Bill would set out the fit and proper person test that would apply to individuals, corporations, trusts and non-corporate government bodies. If an applicant is not a fit and proper person, the person would not satisfy the criteria for approval of registration of a biodiversity project or for a biodiversity certificate to be issued in respect of a registered biodiversity project. The Regulator would also be able to cancel the registration of an existing biodiversity project if a person ceases to be a fit and proper person.

NOTES ON INDIVIDUAL CLAUSES

Clause 96 - Simplified outline of this Part

585.    Clause 96 would provide a simplified outline of Part 8 of the Bill. The outline is not intended to be comprehensive and has been included to assist readers to understand the substantive provisions of Part 8, rather than to replace these provisions. It is intended that readers will rely on the substantive clauses of Part 8.

Clause 97 - Fit and proper person - individuals

586.    Clause 97 would set out the relevant considerations for determining whether a person who is an individual is a fit and proper person for the purposes of the Bill.

 

587.    The fit and proper person test would be relevant to a number of decisions in the Bill, including the decision whether to register a biodiversity project (clause 15), the decision whether to issue a biodiversity certificate for a registered biodiversity project (clause 70) and the decision whether to cancel a project’s registration (clause 29). Generally, a person who is a project proponent for a registered biodiversity project would be required to be a fit and proper person. This would be a key integrity measure in the Bill.

 

588.    This means the Regulator would be required to refuse to register a project, or to refuse to issue a biodiversity certificate if the Regulator is not satisfied that a project proponent for the project (or, in the case of a biodiversity certificate, the project proponent who is applying for the certificate) is a fit and proper person. Similarly, rules made for the purposes of clause 29 may require the Regulator to unilaterally cancel the registration of a biodiversity project in certain circumstances where the Regulator is no longer satisfied the project proponent for the project is a fit and proper person.

 

589.    Subclause 97(1) would set out the matters to which the Regulator is required to have regard when deciding whether it is satisfied that an individual is a fit and proper person. These matters are:

 

·          whether the individual has been convicted of an offence against, or ordered to pay a pecuniary penalty for contravening a provision of, a Commonwealth, State or Territory law that relates to dishonesty or fraudulent conduct, the environment, climate change or work, health or safety ;

 

·          whether the individual has been convicted of an offence under the Criminal Code concerning making false or misleading statements in applications, providing false or misleading information or producing false or misleading documents.

 

·          whether an order has been made against the individual under section 76 of the Competition and Consumer Act 2010 (CC Act) or under section 224 of the Australian Consumer Law (concerning pecuniary penalties);

 

·          whether the individual has contravened the Bill or any of the following Acts: the Carbon Credits (Carbon Farming Initiative) Act 2011 (CFI Act), the NGER Act or the Australian National Registry of Emissions Units Act 2011 (ANREU Act) (or rules or regulations (as the case may be) made under any of the above);

 

·          whether the individual has previously made an application under clause 11 (application to register a biodiversity project), clause 67 (application for a biodiversity certificate), rules made for the purposes of clause 221 (voluntary accreditation of advisers) or another provision of the Bill prescribed by the rules, that was refused on the basis that the Regulator was not satisfied the individual was a fit and proper person;

 

·          whether the individual is an insolvent under administration;

 

·          any other matters prescribed by the rules;

 

·          any other matters the Regulator considers relevant.

 

590.    Subclause 97(2) would have the effect that the Regulator would be permitted, but not required, to have regard to the following additional matters when deciding whether an individual is a fit and proper person:

 

·          whether the individual has been convicted of an offence against, or ordered to pay a pecuniary penalty for contravening a provision of, a law of a foreign country that relates to dishonesty or fraudulent conduct, the environment, climate change or work, health or safety;

 

·          whether the individual has, in the previous 3 years, engaged in conduct that resulted in the individual giving or breaching an enforceable undertaking under a Commonwealth, State or Territory law that relates to the environment, climate change or work, health or safety;

 

·          any other matters prescribed by the rules;

 

·          any other matters the Regulator considers relevant.

 

591.    It is intended that these factors will enable the Regulator to gain a broader understanding of the compliance history of the person without being restricted to only considering those matters that resulted in a conviction or pecuniary penalty order. This will enable the Regulator to make an informed decision as to whether the person is a fit and proper person.

 

592.    While criminal record information is sensitive information under the Privacy Act 1988 (Privacy Act) it is considered appropriate that the Regulator have regard to relevant convictions of the individual when determining whether the individual is a fit and proper person for the purposes of the Bill. This is because knowledge of a person’s history of compliance with relevant Australian laws (and, in some cases, foreign laws) will assist in the Regulator’s assessment of whether the person is likely to comply, or be able to comply, with the requirements of the Bill, the rules or the methodology determination that covers the project. This is particularly the case where the convictions stem from offences against Australian legislation that covers similar subject matter (such as environmental or climate-related legislation) or deals with dishonest or fraudulent conduct. The criminal record information obtained by the Regulator for the purposes of undertaking the fit and proper person test will be protected information under the CER Act and will be subject to the prohibition on unauthorised use and disclosure in section 43 of that Act.

 

593.    Subclause 97(3) would clarify that nothing in clause 97 would affect the operation of Part VIIC of the Crimes Act 1914 (Crimes Act) (dealing with spent convictions).

 

594.    Similarly, subclause 97(4) would clarify that rules made for the purposes of paragraphs 97(1)(k) or 97(2)(c) (prescribing additional matters to which the Regulator must, or may, have regard) would not be able to affect Part VIIC of the Crimes Act.

 

595.    The note following subclause 97(4) would explain that Part VIIC of the Crimes Act includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them.

Clause 98 - Fit and proper person - corporations

596.    Clause 98 would set out the relevant considerations for determining whether a corporation is a fit and proper person for the purposes of the Bill. A corporation would be defined in clause 7 of the Bill to cover both a body corporate and a corporation sole.

 

597.    The fit and proper person test would be relevant to a number of decisions in the Bill, including the decision whether to register a biodiversity project (clause 15), the decision whether to issue a biodiversity certificate for a registered biodiversity project (clause 70) and the decision whether to cancel a project’s registration (clause 29). Generally, a person who is a project proponent for a registered biodiversity project would be required to be a fit and proper person.

 

598.    This means the Regulator would be required to refuse to register a project, or refuse to issue a biodiversity certificate if the Regulator is not satisfied that a project proponent for the project (or, in the case of a biodiversity certificate, the project proponent who is applying for the certificate) is a fit and proper person. Similarly, rules made for the purposes of clause 29 may require the Regulator to unilaterally cancel the registration of a biodiversity project in certain circumstances where the Regulator is no longer satisfied the project proponent for the project is a fit and proper person.

 

599.    Subclause 98(1) would set out the matters to which the Regulator is required to have regard when deciding whether it is satisfied that a corporation is a fit and proper person. These matters are:

 

·          whether the corporation (or any of its executive officers) has been convicted of an offence against, or ordered to pay a pecuniary penalty for contravening a provision of, a Commonwealth, State or Territory law that relates to dishonesty or fraudulent conduct, the environment, climate change or work, health or safety;

 

·          whether the corporation (or any of its executive officers) has been convicted of an offence under the Criminal Code concerning making false or misleading statements in applications, providing false or misleading information or producing false or misleading documents.

 

·          whether an order has been made against the corporation (or any of its executive officers) under section 76 of the CC Act or under section 224 of the Australian Consumer Law (concerning pecuniary penalties);

 

·          whether the corporation (or any of its executive officers) has contravened the Bill, the CFI Act, the NGER Act or the ANREU Act (or rules or regulations made under any of the above);

 

·          whether the corporation (or any of its executive officers) has previously made an application under clause 11 (application to register a biodiversity project), clause 67 (application for a biodiversity certificate), rules made for the purposes of clause 221 (voluntary accreditation of advisers) or another provision of the Bill prescribed by the rules, that was refused on the basis that the Regulator was not satisfied the corporation was a fit and proper person;

 

·          whether the corporation is a corporation under external administration;

 

·          any other matters required by the rules;

 

·          any other matters the Regulator considers relevant.

 

600.    Subclause 98(2) would have the effect that the Regulator would be permitted, but not required, to have regard to the following additional matters when deciding whether a corporation is a fit and proper person:

 

·          whether the corporation (or any of its executive officers) has been convicted of an offence against, or ordered to pay a pecuniary penalty for contravening a provision of, a law of a foreign country that relates to dishonesty or fraudulent conduct, the environment, climate change or work, health or safety;

 

·          whether the corporation (or any of its executive officers) has, in the previous 3 years, engaged in conduct that resulted in giving or breaching an enforceable undertaking under a Commonwealth, State or Territory law that relates to the environment, climate change or work, health or safety;

 

·          any other matters prescribed by the rules;

 

·          any other matters the Regulator considers relevant.

 

601.    It is intended that these factors will enable the Regulator to gain a broader understanding of the compliance history of the corporation without being restricted to only considering those matters that resulted in a conviction or pecuniary penalty order. This will enable the Regulator to make an informed decision as to whether the corporation is a fit and proper person.

 

602.    Subclause 98(3) would clarify that nothing in clause 98 would affect the operation of Part VIIC of the Crimes Act (dealing with spent convictions).

 

603.    Similarly, subclause 98(4) would clarify that rules made for the purposes of paragraphs 98(1)(l) or 98(2)(d) (prescribing additional matters to which the Regulator must, or may, have regard) would not be able to affect Part VIIC of the Crimes Act.

 

604.    The note following subclause 98(4) would explain that Part VIIC of the Crimes Act includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them.

Clause 99 - Fit and proper person - trusts

605.    Clause 99 would set out the relevant considerations for determining whether a trust is a fit and proper person for the purposes of the Bill.

 

606.    The fit and proper person test would be relevant to a number of decisions in the Bill, including the decision whether to register a biodiversity project (clause 15), the decision whether to issue a biodiversity certificate for a registered biodiversity project (clause 70) and the decision whether to cancel a project’s registration (clause 29). Generally, a person who is a project proponent for a registered biodiversity project would be required to be a fit and proper person.

 

607.    This means the Regulator would be required to refuse to register a project, or refuse to issue a biodiversity certificate, if the Regulator is not satisfied that a project proponent for the project (or, in the case of a biodiversity certificate, the project proponent who is applying for the certificate) is a fit and proper person. Similarly, rules made for the purposes of clause 29 may require the Regulator to unilaterally cancel the registration of a biodiversity project in certain circumstances where the Regulator is no longer satisfied the project proponent for the project is a fit and proper person.

 

608.    Subclause 99(1) would set out the matters to which the Regulator is required to have regard when deciding whether it is satisfied that a trust is a fit and proper person. These matters are:

 

·          whether the trust or a trustee of the trust has been convicted of an offence against, or ordered to pay a pecuniary penalty for contravening a provision of, a Commonwealth, State or Territory law that relates to dishonesty or fraudulent conduct, the environment, climate change or work, health or safety;

 

·          whether a trustee of the trust has been convicted of an offence under the Criminal Code concerning making false or misleading statements in applications, providing false or misleading information or producing false or misleading documents;

 

·          whether an order has been made against a trustee of the trust under section 76 of the CC Act or under section 224 of the Australian Consumer Law (concerning pecuniary penalties);

 

·          whether the trust or a trustee of the trust has contravened the Bill, the CFI Act, the NGER Act or the ANREU Act (or rules or regulations made under any of the above);

 

·          whether the trust or a trustee of the trust has previously made an application under clause 11 (application to register a biodiversity project), clause 67 (application for a biodiversity certificate), rules made for the purposes of clause 221 (voluntary accreditation of advisers) or another provision of the Bill prescribed by the rules, that was refused on the basis that the Regulator was not satisfied the trust (or trustee) was a fit and proper person;

 

·          whether a trustee of the trust is a body corporate under external administration or an insolvent under administration;

 

·          any other matters required by the rules;

 

·          any other matters the Regulator considers relevant.

 

609.    Subclause 99(2) would have the effect that the Regulator would be permitted, but not required, to have regard to the following additional matters when deciding whether a trust is a fit and proper person:

 

·          whether a trustee of the trust has been convicted of an offence against, or ordered to pay a pecuniary penalty for contravening a provision of, a law of a foreign country that relates to dishonesty or fraudulent conduct, the environment, climate change or work, health or safety;

 

·          whether a trustee of the trust has, in the previous 3 years, engaged in conduct that resulted in giving or breaching an enforceable undertaking under a Commonwealth, State or Territory law that relates to the environment, climate change or work, health or safety;

 

·          any other matters prescribed by the rules;

 

·          any other matters the Regulator considers relevant.

 

610.    It is intended that these factors will enable the Regulator to gain a broader understanding of the compliance history of the trust without being restricted to only considering those matters that resulted in a conviction or pecuniary penalty order. This will enable the Regulator to make an informed decision as to whether the trust is a fit and proper person.

 

611.    Noting that a trustee of a trust may be an individual, while criminal record information is sensitive information under the Privacy Act, it is considered appropriate that the Regulator have regard to relevant convictions of the individual who is a trustee of a trust when determining whether the trust is a fit and proper person for the purposes of the Bill. This is because knowledge of the person’s history of compliance with relevant Australian laws (and, in some cases, foreign laws) will assist in the Regulator’s assessment of whether the person is likely to comply, or be able to comply, with the requirements of the Bill, the rules or the methodology determination that covers the project. This is particularly the case where the convictions stem from offences against Australian legislation that covers similar subject matter (such as environmental or climate-related legislation) or that deal with dishonest or fraudulent conduct. The criminal record information obtained by the Regulator for the purposes of undertaking the fit and proper person test would be protected information under the CER Act and would be subject to the prohibition on unauthorised use and disclosure in section 43 of that Act.

 

612.    Subclause 99(3) would clarify that nothing in clause 99 would affect the operation of Part VIIC of the Crimes Act (dealing with spent convictions).

 

613.    Similarly, subclause 99(4) would clarify that rules made for the purposes of paragraphs 99(1)(l) or 99(2)(c) (prescribing additional matters to which the Regulator must, or may, have regard) would not be able to affect Part VIIC of the Crimes Act.

 

614.    The note following subclause 99(4) would explain that Part VIIC of the Crimes Act includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them.

Clause 99A - Fit and proper person—non-corporate government bodies

615.    Clause 99A would set out the relevant considerations for determining whether a person who is a non-corporate government body is a fit and proper person for the purposes of the Bill. A non-corporate government body would cover a body politic or a local governing body that is not a corporation (see clause 7).

 

616.    The fit and proper person test would be relevant to a number of decisions in the Bill, including the decision whether to register a biodiversity project (clause 15), the decision whether to issue a biodiversity certificate for a registered biodiversity project (clause 70) and the decision whether to cancel a project’s registration (clause 29). Generally, a person who is a project proponent for a registered biodiversity project would be required to be a fit and proper person. This would be a key integrity measure in the Bill.

 

617.    This means the Regulator would be required to refuse to register a project, or to refuse to issue a biodiversity certificate if the Regulator is not satisfied that a project proponent for the project (or, in the case of a biodiversity certificate, the project proponent who is applying for the certificate) is a fit and proper person. Similarly, rules made for the purposes of clause 29 may require the Regulator to unilaterally cancel the registration of a biodiversity project in certain circumstances where the Regulator is no longer satisfied the project proponent for the project is a fit and proper person.

 

618.    Subclause 99A(1) would set out the matters to which the Regulator is required to have regard when deciding whether it is satisfied that a non-corporate government body is a fit and proper person. These matters are:

 

·          whether the non-corporate government body has been convicted of an offence against, or ordered to pay a pecuniary penalty for contravening a provision of, a Commonwealth, State or Territory law that relates to dishonesty or fraudulent conduct, the environment, climate change or work, health or safety;

 

·          whether the non-corporate government body has been convicted of an offence under the Criminal Code concerning making false or misleading statements in applications, providing false or misleading information or producing false or misleading documents.

 

·          whether an order has been made against the non-corporate government body under section 76 of the CC Act or under section 224 of the Australian Consumer Law (concerning pecuniary penalties);

 

·          whether the non-corporate government body has contravened the Bill or the CFI Act, the NGER Act or the ANREU Act (or rules or regulations made under any of the above);

 

·          whether the non-corporate government body has previously made an application under clause 11 (application to register a biodiversity project), clause 67 (application for a biodiversity certificate), rules made for the purposes of clause 221 (voluntary accreditation of advisers) or another provision of the Bill prescribed by the rules, that was refused on the basis that the Regulator was not satisfied the non-corporate government body was a fit and proper person;

 

·          any other matters required by the rules;

 

·          any other matters the Regulator considers relevant.

 

619.    Subclause 99A(2) would have the effect that the Regulator would be permitted, but not required, to have regard to the following additional matters when deciding whether a non-corporate government body is a fit and proper person:

 

·          whether the non-corporate government body has been convicted of an offence against, or ordered to pay a pecuniary penalty for contravening a provision of, a law of a foreign country that relates to dishonesty or fraudulent conduct, the environment, climate change or work, health or safety;

 

·          whether the non-corporate government body has, in the previous 3 years, engaged in conduct that resulted in giving or breaching an enforceable undertaking under a Commonwealth, State or Territory law that relates to the environment, climate change or work, health or safety;

 

·          any other matters prescribed by the rules;

 

·          any other matters the Regulator considers relevant.

 

620.    It is intended that these factors will enable the Regulator to gain a broader understanding of the compliance history of the person without being restricted to only considering those matters that resulted in a conviction or pecuniary penalty order. This will enable the Regulator to make an informed decision as to whether the person is a fit and proper person.

 

621.    While criminal record information is sensitive information under the Privacy Act, it is considered appropriate that the Regulator have regard to relevant convictions of the non-corporate government body when determining whether the non-corporate government body is a fit and proper person for the purposes of the Bill. This is because knowledge of a person’s history of compliance with relevant Australian laws (and, in some cases, foreign laws) will assist in the Regulator’s assessment of whether the person is likely to comply, or be able to comply, with the requirements of the Bill, the rules or the methodology determination that covers the project. This is particularly the case where the convictions stem from offences against Australian legislation that covers similar subject matter (such as environmental or climate-related legislation) or deals with dishonest or fraudulent conduct. The criminal record information obtained by the Regulator for the purposes of undertaking the fit and proper person test will be protected information under the CER Act and will be subject to the prohibition on unauthorised use and disclosure in section 43 of that Act.

 

622.    Subclause 99A(3) would clarify that nothing in clause 99 would affect the operation of Part VIIC of the Crimes Act 1914 (Crimes Act) (dealing with spent convictions).

 

623.    Similarly, subclause 99A(4) would clarify that rules made for the purposes of paragraphs 99A(1)(j) or 97(2)(c) (prescribing additional matters to which the Regulator must, or may, have regard) would not be able to affect Part VIIC of the Crimes Act.

 

624.    The note following subclause 99A(4) would explain that Part VIIC of the Crimes Act includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them.

PART 9 - REPORTING AND NOTIFICATION REQUIREMENTS

GENERAL OUTLINE

625.    Part 9 of the Bill would set out the provisions relating to reporting and notification requirements. There would be a requirement for biodiversity project reports to accompany an application for the issue of a biodiversity certificate and to be provided at regular intervals after a biodiversity certificate has been issued by the Regulator (Category A biodiversity project reports). Part 9 would also provide for biodiversity project reports to be given during the period before a biodiversity certificate is issued for a registered biodiversity project (Category B biodiversity project reports).

 

626.    This Part would also provide requirements to notify the Regulator of various matters.

NOTES ON INDIVIDUAL CLAUSES

Division 1 - Introduction

Clause 100 - Simplified outline of this Part

627.    Clause 100 would provide a simplified outline of Part 9 of the Bill. The outline is not intended to be comprehensive and has been included to assist readers to understand the substantive provisions of Part 9, rather than to replace these provisions. It is intended that readers will rely on the substantive clauses of Part 9.

Division 2 - Reporting requirements

Subdivision A - Category A biodiversity project reports

Clause 101 - Category A biodiversity project reports - first report

628.    Clause 101 would require an application for a biodiversity certificate in respect of a registered biodiversity project to be accompanied by a written report about the project.

 

629.    The report would be known as a category A biodiversity project report. It would:

 

·          need to meet the requirements for category A biodiversity project reports in clause 103; and

 

·          relate to the period from when the project was registered until within 6 months before the application for a biodiversity certificate is made.

 

630.    However, the report would not be required to cover any reporting requirement for which the project proponent has previously provided a category B biodiversity project report (under clause 104) for the project (subclause 101(4)). This would reduce duplication and regulatory burden for the project proponent and the Regulator.

 

631.    The purpose of requiring a category A biodiversity project report to accompany an application for a biodiversity certificate is to enable the Regulator to accurately assess the progress of the project in achieving the biodiversity outcome to which the project relates, and whether any other conditions or requirements in the methodology determination have been satisfied. This is relevant to the criteria in clause 70 for issuing biodiversity certificates.

Clause 102 - Category A biodiversity project reports - subsequent reports

632.    Clause 102 would set ongoing reporting requirements in respect of registered biodiversity projects for which a biodiversity certificate has been issued (whether or not the certificate is still in effect).

 

633.    This is an important integrity measure, as it would allow the Regulator to assess whether the biodiversity outcome has been achieved and is maintained, or whether circumstances exist that may make it appropriate for the biodiversity certificate for the project to be relinquished (such as the occurrence of a significant reversal of biodiversity outcome).

 

634.    Reports required under clause 102 would also be known as category A biodiversity project reports and would have to meet the requirements for category A biodiversity project reports in clause 103.

 

635.    Category A biodiversity project reports under clause 102 would be required to cover a reporting period that is a minimum of 6 months (or a lesser minimum period specified in the rules) and a maximum of 5 years from the end of the reporting period for the previous Category A biodiversity project report required (either under clause 101 or 102). The obligation to provide subsequent category A biodiversity project reports would run until the end of the permanence period (unless the project is exempted under subclause 102(3)).

 

636.    This would ensure the Regulator is able to monitor the project until the end of the permanence period. If the permanence period for the project would end less than 5 years following the end of the previous reporting period, the final category A biodiversity project report would be required to cover the period from the end of the previous reporting period until the end of the permanence period (whatever its length).

 

637.    Subclause 102(3) would allow the Regulator, by written notice given to the project proponent, to exempt a particular registered biodiversity project from the reporting requirement in clause 102 for one or more reporting periods. This may be appropriate for projects that have a very long permanence period. The Regulator would only be able to exempt a registered biodiversity project from having to provide category A biodiversity project reports if the project proponent requests the exemption, and the Regulator is satisfied that it is appropriate to exempt the project, having regard to the stage of the project and any other matters the Regulator considers relevant.

 

638.    A decision under subclause 102(3) to exempt, or not to exempt, a project from the requirement in clause 102 to provide category A biodiversity project reports would be a reviewable decision. This is reflected in the note following subclause 102(3), which directs the reader to Part 20 of the Bill (dealing with reviewable decisions).

 

639.    Subclause 102(4) would have the effect that the project proponent would be liable for a civil penalty if they do not comply with a requirement to give the Regulator a category A biodiversity project report required under clause 102 for a reporting period. The maximum penalty for an individual would be 200 penalty units. A body corporate would be liable for five times this amount as a maximum penalty (see subsection 82(5) of the Regulatory Powers Act).

 

640.    There would also be a continuing civil penalty provision for the purposes of section 93 of the Regulatory Powers Act (subclause 102(5)). Under section 93 of the Regulatory Powers Act, if an act or thing is required under a civil penalty provision to be done within a particular period or before a particular time, then the obligation to do that act or thing continues until the act or thing is done (even if the period has expired or the time has passed), and the person commits a separate contravention of that provision in respect of each day during which the contravention occurs. Subclause 102(5) would provide that the maximum civil penalty for each day that a contravention of the requirement in clause 102 continues is 5% of the maximum civil penalty that can be imposed in respect of the contravention. This means that an individual may be liable to a civil penalty of 10 penalty units per day that they are contravening the requirement in clause 102 to give the Regulator a category A biodiversity project report for a reporting period. This is considered appropriate, given the importance of ensuring compliance with reporting requirements in a timely manner.

Clause 103 - Requirements for category A biodiversity project reports

641.    Clause 103 would set out the requirements for a category A biodiversity project report.

 

642.    Under subclause 103(1), a category A biodiversity project report would need to:

 

·          be given in the manner and form prescribed by the rules;

 

·          set out any information required by the rules or the methodology determination that covers the project;

 

·          be accompanied by a prescribed audit report prepared by a registered greenhouse and energy auditor - but only if required by the rules, the methodology determination that covers the project, or by written notice from the Regulator. The rules would set out the requirements of such a report (including the content). A registered greenhouse and energy auditor is appointed as such under the NGER Act;

 

·          be accompanied by any other documents required by the rules or the methodology determination that covers the project;

 

·          be given to the Regulator within 6 months after the end of the relevant reporting period or, if the methodology determination that covers the project provides for a longer period - that time.

 

643.    Subclauses 103(2) would clarify that a category A biodiversity project report would be able to deal with matters that occur before the start of the relevant reporting period.

 

644.    Subclauses 103(3) and (6) would have the combined effect that the rules or the methodology determination that covers the project would be able to require a category A biodiversity report to set out information, or be accompanied by documents, that relate to a matter arising before, during or after the reporting period .

 

645.    Subclause 103(4) would clarify that the rules or a methodology determination would be able to require a category A biodiversity project report be subject to audit under the Bill if either or both of the following apply:

 

·          the report is specified in the rules or determination (as the case may be);

 

·          the report is for a reporting period specified in, or ascertained in accordance with, the rules or determination (as the case may be).

 

646.    This means that the rules or the methodology determination would be able to prescribe either or both of the following:

 

·          that some registered biodiversity projects (or classes of registered biodiversity projects) will have all category A biodiversity project reports subject to audit (ie every reporting period);

 

·          that some registered biodiversity projects (or classes of registered biodiversity projects) will have some category A biodiversity project reports subject to audit while some category A biodiversity project reports are not. For example, the rules or methodology determination might require, for a registered biodiversity project (or class of registered biodiversity projects), a category A biodiversity project report to be subject to audit every third reporting period.

 

647.    Subclause 103(5) would have the effect that a requirement (imposed by the rules, the methodology determination that covers the project or by a notice from the Regulator) that a category A biodiversity project report be subject to audit would not apply for a reporting period if the Regulator and the project proponent for the project have entered into an alternative assurance agreement that applies to the project for the relevant reporting period. The kinds of alternative assurance arrangements that a proponent could agree with the Regulator to undertake in lieu of a subjecting a category A biodiversity project to audit would be prescribed in the rules made for the purposes of clause 104A of the Bill.

 

 

Subdivision B - Category B biodiversity project reports

Clause 104 - Category B biodiversity project reports

648.    Clause 104 would provide for the concept of category B biodiversity project reports. Category B biodiversity project reports would be relevant to the period before a biodiversity certificate has been issued for a registered biodiversity project. The purpose of requiring reports during this period is to allow the Regulator to monitor the ongoing progress of the project, including compliance with the requirements in the methodology determination that covers the project and (where relevant) the implementation of the project plan for the project.

 

649.    Subclause 104(2) would require the project proponent for a registered biodiversity project to give the Regulator a category B biodiversity project report for each reporting period that is prescribed by the rules. It would be appropriate for rules to prescribe the reporting periods for category B biodiversity project reports to allow the timing and length of such reporting periods to be tailored to different kinds of projects and biodiversity, as appropriate. As each biodiversity project would apply to different activities in a different region or ecosystem, reporting requirements may need to reflect their distinctiveness and uniqueness. In addition, not all registered biodiversity projects may have a project plan; as such it may be appropriate for different reporting periods to apply to projects with and without project plans.

 

650.    Subclause 104(3) would require a category B biodiversity project report to:

 

·          be given in the manner and form prescribed by the rules;

 

·          set out any information required by the rules or the methodology determination that covers the project;

 

·          be accompanied by a prescribed audit report prepared by a registered greenhouse and energy auditor - but only if required by the rules, the methodology determination that covers the project, or by written notice from the Regulator. The rules would set out the requirements of such a report (including the content). A registered greenhouse and energy auditor is appointed as such under the NGER Act;

 

·          be accompanied by any other documents required by the rules or the methodology determination that covers the project;

 

·          be given to the Regulator within the period required by the rules.

 

651.    Subclause 104(4) would clarify that the rules or a methodology determination may provide that a category B biodiversity project report is subject to audit under the Bill if either or both of the following apply:

 

·          the report is specified in the rules or determination (as the case may be);

 

·          the report is for a reporting period specified in, or ascertained in accordance with, the rules or determination (as the case may be).

 

652.    This means that the rules or the methodology determination would be able to prescribe either or both of the following:

 

·          that some registered biodiversity projects (or classes of registered biodiversity projects) will have all category B biodiversity project reports subject to audit (ie every reporting period);

 

·          that some registered biodiversity projects (or classes of registered biodiversity projects) will have some category B biodiversity project reports subject to audit while some category B biodiversity project reports are not. For example, the rules or methodology determination might require, for a registered biodiversity project (or class of registered biodiversity projects), a category B biodiversity project report to be subject to audit every third reporting period.

 

653.    Subclause 104(5) would have the effect that a requirement (imposed by the rules, the methodology determination that covers the project or by a notice from the Regulator) that a category B biodiversity project report must be subject to audit does not apply to a reporting period if the Regulator and the project proponent for the project have entered into an alternative assurance agreement that applies to the project for the relevant reporting period. The kinds of alternative assurance arrangements that a proponent could agree with the Regulator to undertake in lieu of subjecting a category B biodiversity project to audit would be prescribed in the rules made for the purposes of clause 104A of the Bill.

 

654.    Subclauses 104(6) would clarify that a category B biodiversity project report would be able to deal with matters that occur before the start of the relevant reporting period.

 

655.    Subclauses 104(7) and (8) would have the combined effect that the rules or the methodology determination that covers the project would be able to require a category B biodiversity report to set out information, or be accompanied by documents, that relate to a matter arising before, during or after the reporting period.

 

656.    Subclause 104(9) would have the effect that the project proponent would be liable to a civil penalty if they do not comply with a requirement to give the Regulator a category B biodiversity project report for a reporting period. The maximum penalty for an individual would be 200 penalty units. A body corporate would be liable for five times this amount as a maximum penalty (see subsection 82(5) of the Regulatory Powers Act).

 

657.    There would also be a continuing civil penalty provision for the purposes of section 93 of the Regulatory Powers Act (subclause 104(10)). Under section 93 of the Regulatory Powers Act, if an act or thing is required under a civil penalty provision to be done within a particular period or before a particular time, then the obligation to do that act or thing continues until the act or thing is done (even if the period has expired or the time has passed), and the person commits a separate contravention of that provision in respect of each day during which the contravention occurs. Subclause 104(10) would provide that the maximum civil penalty for each day that a contravention of the requirement in clause 104 continues is 5% of the maximum civil penalty that can be imposed in respect of the contravention. This means that an individual may be liable to a civil penalty of 10 penalty units per day that they are contravening the requirement in clause 104 to give the Regulator a category B biodiversity project report. This is considered appropriate, given the importance of ensuring compliance with reporting requirements in a timely manner.

Subdivision C - Alternative assurance agreements

Clause 104A - Alternative assurance agreements

658.    Clause 104A would allow the Regulator and the project proponent for a registered biodiversity project to enter into a written agreement (known as an alternative assurance agreement) that applies to a specified reporting period. An alternative assurance agreement must be for the purpose of providing assurance to the Regulator about the project proponent’s compliance with the Bill (including the rules and other legislative instruments under the Bill) and must contain one or more alternative assurance measures.

 

659.    The rules would prescribe the kinds of alternative assurance measures that may be agreed to by the Regulator and the project proponent in an alternative assurance agreement. It is appropriate that such measures are prescribed in the rules, as different measures are likely to be appropriate for different kinds of projects, different biodiversity outcomes or different stages of the project. As such, prescribing alternative assurance measures in the rules will allow such measures to be appropriately tailored to meet the needs of the relevant projects.

 

660.    An alternative assurance agreement would not be mandatory. The purpose of providing for alternative assurance agreements is to allow project proponents the option, in appropriate circumstances, of undertaking particular measures to assure the Regulator of their compliance with the Bill, instead of having to get their category A or B biodiversity project reports audited. A requirement (imposed by the rules, the methodology determination that covers the project or by a notice from the Regulator) that a category A or B biodiversity project report must be subject to audit would not apply to a reporting period if the Regulator and the project proponent for the project have entered into an alternative assurance agreement that applies to the project for the relevant reporting period (see subclauses 103(5) and 104(5)).

 

661.    This would provide appropriate flexibility for proponents, without compromising environmental standards or market confidence.

Division 3 - Notification requirements

Clause 105 - Notification requirement - project proponent ceases to have right to carry out project

662.    The notification requirement in clause 105 would apply if:

 

·           an eligible person who is a project proponent of a registered biodiversity project ceases to have a right that is necessary for the project to be carried out; and

 

·          the result is that there is no longer a project proponent for that project that has the necessary right to carry out the project (subclauses 105(1) and (2)).

 

663.    This will be the case if the sole project proponent for a registered biodiversity project ceases to have the right to carry the project out. It would also be the case for projects with multiple project proponents, in the circumstances that one project proponent ceasing to have a right that is necessary to carry out the project means that no remaining project proponent for the project has the necessary right.

 

664.    A right that is necessary to carry out the project may involve ownership or possession of the land that is the project area. For instance, if a project proponent holds a lease over the project area, and that lease is cancelled, the project proponent would no longer have a right to carry out the project on the project area.

 

665.     In these circumstances, the eligible person would be required to notify the Regulator of the cessation of the right, within 90 days of the cessation occurring (subclause 105(3)).

 

666.    The eligible person would be liable to a civil penalty if they do not comply with the requirement to notify the Regulator of the cessation of the right. The maximum penalty for an individual would be 200 penalty units. A body corporate would be liable for five times this amount as a maximum penalty (see subsection 82(5) of the Regulatory Powers Act).

 

667.    There would also be a continuing civil penalty provision for the purposes of section 93 of the Regulatory Powers Act (subclause 105(4)). Under section 93 of the Regulatory Powers Act, if an act or thing is required under a civil penalty provision to be done within a particular period or before a particular time, then the obligation to do that act or thing continues until the act or thing is done (even if the period has expired or the time has passed), and the person commits a separate contravention of that provision in respect of each day during which the contravention occurs. Subclause 105(4) would provide that the maximum civil penalty for each day that a contravention of the requirement in clause 105 continues is 5% of the maximum civil penalty that can be imposed in respect of the contravention. This means that an individual may be liable to a civil penalty of 10 penalty units per day that they are contravening the requirement in clause 105. This is considered appropriate, given the importance of ensuring the information about the cessation of project proponent’s right to carry out the project is notified to the Regulator in a timely manner.

Clause 106 - Notification requirement - withdrawal or cessation of regulatory approval

668.    The notification requirement in clause 106 would apply if a regulatory approval required for a registered biodiversity project to be carried out is withdrawn or otherwise ceases to have effect, for any reason (subclause 106(1)).

 

669.    A regulatory approval required for a project to be carried out may be under Commonwealth, State or Territory or local government laws (such as water or environmental regulations, or work health and safety laws).

 

670.     In these circumstances, the project proponent for the project would be required to notify the Regulator of the withdrawal or cessation of the regulatory approval, within 90 days of the withdrawal or cessation occurring (subclause 106(2)).

 

671.    The project proponent would be liable to a civil penalty if they do not comply with the requirement to notify the Regulator of the withdrawal or cessation of the regulatory approval. The maximum penalty for an individual would be 200 penalty units. A body corporate would be liable for five times this amount as a maximum penalty (see subsection 82(5) of the Regulatory Powers Act).

 

672.    There would also be a continuing civil penalty provision for the purposes of section 93 of the Regulatory Powers Act (subclause 105(3)). Under section 93 of the Regulatory Powers Act, if an act or thing is required under a civil penalty provision to be done within a particular period or before a particular time, then the obligation to do that act or thing continues until the act or thing is done (even if the period has expired or the time has passed), and the person commits a separate contravention of that provision in respect of each day during which the contravention occurs. Subclause 106(3) would provide that the maximum civil penalty for each day that a contravention of the requirement in clause 106 continues is 5% of the maximum civil penalty that can be imposed in respect of the contravention. This means that an individual may be liable to a civil penalty of 10 penalty units per day that they are contravening the requirement in clause 106. This is considered appropriate, given the importance of ensuring the information about the withdrawal or cessation of a regulatory approval required to carry out the project is notified to the Regulator in a timely manner.

Clause 107 - Notification requirement - death of project proponent

673.    The notification requirement in clause 107 would apply if a person who is the project proponent for a registered biodiversity project dies (subclause 107(1)).

 

674.    In these circumstances, the person’s legal representative would be required to notify the Regulator in writing of the death within 90 days of the death occurring. The notification would be required to be in writing (subclause 107(2)).

 

675.    The person’s legal representative would be liable to a civil penalty if they do not comply with the requirement to notify the Regulator of the project proponent’s death. The maximum penalty for an individual would be 60 penalty units. A body corporate would be liable for five times this amount as a maximum penalty (see subsection 82(5) of the Regulatory Powers Act).

 

676.    There would also be a continuing civil penalty provision for the purposes of section 93 of the Regulatory Powers Act (subclause 107(3)). Under section 93 of the Regulatory Powers Act, if an act or thing is required under a civil penalty provision to be done within a particular period or before a particular time, then the obligation to do that act or thing continues until the act or thing is done (even if the period has expired or the time has passed), and the person commits a separate contravention of that provision in respect of each day during which the contravention occurs. Subclause 107(3) would provide that the maximum civil penalty for each day that a contravention of the requirement in clause 107 continues is 5% of the maximum civil penalty that can be imposed in respect of the contravention. This means that an individual may be liable to a civil penalty of 3 penalty units per day that they are contravening the requirement in clause 107. This is considered appropriate, given the importance of ensuring the information about a project proponent’s death is notified to the Regulator in a timely manner.

Clause 108 - Notification requirement - methodology determinations

677.    The notification requirement in clause 108 would apply where a methodology determination that covers a registered biodiversity project requires the project proponent for that project to notify the Regulator of one or more matters relating to the project (subclause 108(1)). For example, a methodology determination may require the project proponent for a registered biodiversity project covered by that methodology determination to notify the Regulator of a livestock exclusion fence failure and significant grazing and trampling of plants and soil loss impacts to a saltmarsh migratory bird habitat being restored in the project area. Another example would be that a methodology determination may require the project proponent for a registered biodiversity project covered by that methodology determination to notify the Regulator of a recent flood and significant losses of ecological plantings along a river in the project area.

 

678.    Subclause 108(2) would require the project proponent to comply with any such requirement.

 

679.    It is appropriate that some notification requirements may be imposed by the applicable methodology determination rather than the Bill. This is because a methodology determination will deal with matters unique to the kinds of registered biodiversity projects covered by that determination. Methodology determinations would be legislative instruments made by the Minister on the advice of the Nature Repair Market Committee (see clauses 45 and 47) and would be subject to ordinary parliamentary scrutiny processes, including disallowance and sunsetting.

 

680.    The project proponent for a registered biodiversity project would be liable to a civil penalty if they do not comply with a notification requirement in the methodology determination that covers the project. The maximum penalty for an individual would be 60 penalty units. A project proponent that is a body corporate would be liable for five times this amount as a maximum penalty (see subsection 82(5) of the Regulatory Powers Act).

 

681.    Where the methodology determination requires the notification be made within a specified time period, there would also be a continuing civil penalty provision for the purposes of section 93 of the Regulatory Powers Act (subclause 95(3)). Under section 93 of the Regulatory Powers Act, if an act or thing is required under a civil penalty provision to be done within a particular period or before a particular time, then the obligation to do that act or thing continues until the act or thing is done (even if the period has expired or the time has passed), and the person commits a separate contravention of that provision in respect of each day during which the contravention occurs. Subclause 108(3) would provide that the maximum civil penalty for each day that a contravention of the requirement in clause 108 continues is 5% of the maximum civil penalty that can be imposed in respect of the contravention. This means that an individual may be liable to a civil penalty of 3 penalty units per day that they are contravening the requirement in clause 108. This is considered appropriate, given the importance of ensuring a notification requirement imposed by a methodology determination is complied with in a timely manner.

Clause 109 - Notification requirement - reversal of biodiversity outcome

682.    The notification requirement in clause 109 would apply where the project proponent for a registered biodiversity project becomes aware of a significant reversal of the biodiversity outcome to which the project relates (subclause 109(1)).

 

683.    The notification requirement would only apply where the reversal of the biodiversity outcome is taken to be a significant reversal. The note following subclause 109(1) would refer the reader to clause 111 of the Bill, which would allow the rules to prescribe circumstances in which, relevantly, there is taken to be a significant reversal of a biodiversity outcome to which a registered biodiversity project relates. For instance, the rules might provide that a significant reversal in biodiversity outcome is where the applicable methodology determination provides for the restoration of native forest and the project proponent clears trees on the project area. Another example could be inadvertent clearing of some or all of the project area by the proponent, especially in situations where clearing resulted in significant loss of habitat.

 

684.    In these circumstances, the project proponent for the project would be required to notify the Regulator of the reversal within 60 days of the project proponent becoming aware of the reversal (subclause 109(2)).

 

685.    The project proponent would be liable to a civil penalty if they do not comply with the requirement to notify the Regulator of the significant reversal of biodiversity outcome. The maximum penalty for an individual would be 200 penalty units. A body corporate would be liable for five times this amount as a maximum penalty (see subsection 82(5) of the Regulatory Powers Act).

 

686.    There would also be a continuing civil penalty provision for the purposes of section 93 of the Regulatory Powers Act (subclause 109(3) and the note following subclause 109(3)). Under section 93 of the Regulatory Powers Act, if an act or thing is required under a civil penalty provision to be done within a particular period or before a particular time, then the obligation to do that act or thing continues until the act or thing is done (even if the period has expired or the time has passed), and the person commits a separate contravention of that provision in respect of each day during which the contravention occurs. Subclause 109(3) would provide that the maximum civil penalty for each day that a contravention of the requirement in clause 109 continues is 5% of the maximum civil penalty that can be imposed in respect of the contravention. This means that an individual may be liable to a civil penalty of 10 penalty units per day that they are contravening the requirement in clause 109. This is considered appropriate, given the importance of ensuring that information about a significant reversal of a biodiversity outcome that relates to a registered biodiversity project is notified to the Regulator in a timely manner.

Clause 110 - Notification requirement - event or conduct that causes, or is likely to cause, reversal of biodiversity outcome

687.    The notification requirement in clause 110 would apply where the project proponent for a registered biodiversity project becomes aware of any of the following:

 

·          a natural disturbance that causes, or is likely to cause, a significant reversal of the biodiversity outcome to which the project relates;

 

·          conduct engaged in by the project proponent for the project, or any other person, that causes, or is likely to cause, a significant reversal of the biodiversity outcome to which the project relates.

 

688.    The notification requirement would only apply where the reversal of the biodiversity outcome is taken to be a significant reversal.  For example, a major bushfire or cyclone could result in significant loss of habitat and endangered species. The note following subclause 110(1) would refer the reader to clause 111 of the Bill, which would allow the rule to prescribe circumstances in which, relevantly, there is taken to be a significant reversal of a biodiversity outcome to which a registered biodiversity project relates.

 

689.    In these circumstances, the project proponent for the project would be required to notify the Regulator of the relevant matter within 60 days of the project proponent becoming aware of the matter (subclause 110(2)).

 

690.    The project proponent would be liable to a civil penalty if they do not comply with the requirement to notify the Regulator of the natural disturbance or conduct that causes, or is likely to cause, a significant reversal of a biodiversity outcome to which the project relates. The maximum penalty for an individual would be 200 penalty units. A body corporate would be liable for five times this amount as a maximum penalty (see subsection 82(5) of the Regulatory Powers Act).

 

691.    There would also be a continuing civil penalty provision for the purposes of section 93 of the Regulatory Powers Act (subclause 110(3) and the note following subclause 110(3)). Under section 93 of the Regulatory Powers Act, if an act or thing is required under a civil penalty provision to be done within a particular period or before a particular time, then the obligation to do that act or thing continues until the act or thing is done (even if the period has expired or the time has passed), and the person commits a separate contravention of that provision in respect of each day during which the contravention occurs. Subclause 110(3) would provide that the maximum civil penalty for each day that a contravention of the requirement in clause 110 continues is 5% of the maximum civil penalty that can be imposed in respect of the contravention. This means that an individual may be liable to a civil penalty of 10 penalty units per day that they are contravening the requirement in clause 110. This is considered appropriate, given the importance of ensuring that information about a significant reversal of a biodiversity outcome that relates to a registered biodiversity project is notified to the Regulator in a timely manner.

Clause 111 - Significant reversals in biodiversity outcomes - notification requirements

692.    Under clause 111, the rules would be able to prescribe circumstances in which there has been a reversal of biodiversity outcome to which a registered biodiversity project relates and whether or not the reversal of the biodiversity outcome is taken to be significant.

 

693.    Rules made prescribing these circumstances would be relevant to clauses 109 and 110, which would require the project proponent for a registered biodiversity project to notify the Regulator of a significant reversal of a biodiversity outcome to which the project relates or certain events causing or likely to cause such.

 

694.    Subclause 111(2) would clarify that clause 111 would not limit clause 148, which would provide for significant reversals in biodiversity outcomes for the purposes of relinquishment requirements (which may be different).

 

695.    It would be appropriate for rules to prescribe these circumstances to allow the necessary detail to be included and to allow circumstances to be tailored to different kinds of projects and biodiversity, as appropriate. As each biodiversity project would apply to different activities in a different region or ecosystem, notification requirements may need to reflect their distinctiveness and uniqueness. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

Clause 112 - Notification requirement - event relevant to whether a project proponent is a fit and proper person

696.    The notification requirement in clause 112 would apply to a project proponent of a registered biodiversity project in the event that certain events relating to the fit and proper person test (in clauses 97 to 99A) occur.

 

697.    The relevant events would be:

 

·          Where the project proponent is an individual:

 

                                                  i.       the individual is convicted of an offence against, or ordered to pay a pecuniary penalty for contravening a provision of, a Commonwealth, State or Territory law that relates to dishonesty or fraudulent conduct, the environment, climate change or work, health or safety;

 

                                                ii.       the individual is convicted of an offence under the Criminal Code concerning making false or misleading statements in applications, providing false or misleading information or producing false or misleading documents;

 

                                              iii.       an order is made against the individual under section 76 of the CC Act or under section 224 of the Australian Consumer Law (concerning pecuniary penalties);

 

                                              iv.       the individual is an insolvent under administration;

 

                                                v.       the individual is convicted of an offence against, or ordered to pay a pecuniary penalty for contravening a provision of, a law of a foreign country that relates to dishonesty or fraudulent conduct, the environment, climate change or work, health or safety.

 

·          Where the project proponent is a corporation:

 

                                                  i.       the corporation (or an executive officer of the corporation) is convicted of an offence against, or ordered to pay a pecuniary penalty for contravening a provision of, a Commonwealth, State or Territory law that relates to dishonesty or fraudulent conduct, the environment, climate change or work, health or safety;

 

                                                ii.       the corporation (or an executive officer of the corporation) is convicted of an offence under the Criminal Code concerning making false or misleading statements in applications, providing false or misleading information or producing false or misleading documents;

 

                                              iii.       an order is made against the corporation (or an executive officer of the corporation) under section 76 of the CC Act or under section 224 of the Australian Consumer Law (concerning pecuniary penalties);

 

                                              iv.       the corporation is a corporation under external administration;

 

                                                v.       the corporation (or an executive officer of the corporation) is convicted of an offence against, or ordered to pay a pecuniary penalty for contravening a provision of, a law of a foreign country that relates to dishonesty or fraudulent conduct, the environment, climate change or work, health or safety.

 

·          Where the project proponent is a trust:

 

                                                  i.       the trust (or a trustee of the trust) is convicted of an offence against, or ordered to pay a pecuniary penalty for contravening a provision of, a Commonwealth, State or Territory law that relates to dishonesty or fraudulent conduct, the environment, climate change or work, health or safety;

 

                                                ii.       the trust (or a trustee of the trust) is convicted of an offence under the Criminal Code concerning making false or misleading statements in applications, providing false or misleading information or producing false or misleading documents;

 

                                              iii.       an order is made against the trust (or a trustee of the trust) under section 76 of the CC Act or under section 224 of the Australian Consumer Law (concerning pecuniary penalties);

 

                                              iv.       a trustee of the trust is a body corporate under external administration or an insolvent under administration;

 

                                                v.       the trust (or a trustee of the trust) is convicted of an offence against, or ordered to pay a pecuniary penalty for contravening a provision of, a law of a foreign country that relates to dishonesty or fraudulent conduct, the environment, climate change or work, health or safety.

 

·          Where the project proponent is a non-corporate government body:

 

                                                  i.       The non-corporate government body is convicted of an offence against, or ordered to pay a pecuniary penalty for contravening a provision of, a Commonwealth, State or Territory law that relates to dishonesty or fraudulent conduct, the environment, climate change or work, health or safety;

 

                                                ii.       the non-corporate government body is convicted of an offence under the Criminal Code concerning making false or misleading statements in applications, providing false or misleading information or producing false or misleading documents;

 

                                              iii.       an order is made against the non-corporate government body under section 76 of the CC Act or under section 224 of the Australian Consumer Law (concerning pecuniary penalties);

 

                                              iv.       the non-corporate government body is convicted of an offence against, or ordered to pay a pecuniary penalty for contravening a provision of, a law of a foreign country that relates to dishonesty or fraudulent conduct, the environment, climate change or work, health or safety.

 

698.    Clause 112 would have the effect that the project proponent would be required to notify the Regulator of any of the above events relating to the fit and proper person test within 90 days of the event occurring.

 

699.    The exception is where the breach consists of a breach of the Bill (including a legislative instrument made under the Bill) or a climate change law (within the meaning of the CER Act). The purpose of this exception is to reduce unnecessary duplication and regulatory burden, as the Regulator would already have this information.

 

700.    The project proponent would be liable to a civil penalty if they do not comply with the requirement to notify the Regulator of a relevant event relating to the fit and proper person test. The maximum penalty for an individual would be 200 penalty units. A body corporate would be liable for five times this amount as a maximum penalty (see subsection 82(5) of the Regulatory Powers Act).

 

701.    There would also be a continuing civil penalty provision for the purposes of section 93 of the Regulatory Powers Act (subclause 112(4) and the note following subclause 112(4)). Under section 93 of the Regulatory Powers Act, if an act or thing is required under a civil penalty provision to be done within a particular period or before a particular time, then the obligation to do that act or thing continues until the act or thing is done (even if the period has expired or the time has passed), and the person commits a separate contravention of that provision in respect of each day during which the contravention occurs. Subclause 112(4) would provide that the maximum civil penalty for each day that a contravention of the requirement in clause 112 continues is 5% of the maximum civil penalty that can be imposed in respect of the contravention. This means that an individual may be liable to a civil penalty of 10 penalty units per day that they are contravening the requirement in clause 112. This is considered appropriate, given the importance of ensuring that information relevant to whether the project proponent continues to satisfy the fit and proper person test is notified to the Regulator in a timely manner.

Clause 113 - Notification requirement - variation of project plan

702.    The notification requirement in clause 113 would apply to registered biodiversity projects that have a project plan.

 

703.    A project plan would be defined in clause 7 in relation to a biodiversity project, to set out how the project is intended to be carried out and how the project is intended to achieve the biodiversity outcome for the project. A project plan would also be required to be consistent with the methodology determination that covers the project, and include such information, and comply with such requirements, as are specified in the rules or the methodology determination that covers the project.

 

704.    Subclause 113(1) would have the effect that the project proponent for a registered biodiversity project that has a project plan would have to notify the Regulator of the details of a variation made to the project plan, and the date the variation took effect. The notification would be required to be made within 60 days after the variation has taken effect. The project proponent would also be required to give the Regulator a copy of the project plan as varied.

 

705.    The notification requirement in subclause 113(1) would not apply to a variation of a project plan that is of a minor nature.

 

706.    The purpose of requiring notification of variations in project plans for registered biodiversity projects is so that the Regulator is aware of how the project is being carried out, which will be relevant to whether the biodiversity outcome for the project is likely to be achieved. While a variation to a project plan would not require the Regulator’s approval, it is important that the Regulator is aware of such variations. This is because if the Regulator is satisfied that the project is not being carried out in a way that is likely to achieve a biodiversity outcome or other enhancement or protection of biodiversity, the Regulator may decide not to issue a biodiversity certificate for the project (see clause 70). In these circumstances the Regulator may also decide to cancel the project’s registration under rules made for the purposes of subclause 27(1) of the Bill.

 

707.    The project proponent would be liable to a civil penalty if they do not comply with the requirement to notify the Regulator of a non-minor variation to a project plan for a registered biodiversity project. The maximum penalty for an individual would be 60 penalty units. A body corporate would be liable for five times this amount as a maximum penalty (see subsection 82(5) of the Regulatory Powers Act).

 

708.    There would also be a continuing civil penalty provision for the purposes of section 93 of the Regulatory Powers Act (subclause 113(2) and the note following subclause 113(2)). Under section 93 of the Regulatory Powers Act, if an act or thing is required under a civil penalty provision to be done within a particular period or before a particular time, then the obligation to do that act or thing continues until the act or thing is done (even if the period has expired or the time has passed), and the person commits a separate contravention of that provision in respect of each day during which the contravention occurs. Subclause 113(2) would provide that the maximum civil penalty for each day that a contravention of the requirement in subclause 113(1) continues is 5% of the maximum civil penalty that can be imposed in respect of the contravention. This means that an individual may be liable to a civil penalty of 3 penalty units per day that they are contravening the requirement in subclause 113(1). This is considered appropriate, given the importance of ensuring that information about a variation to a project plan for a registered biodiversity project is notified to the Regulator in a timely manner.

 

709.    Subclause 113(3) would apply in the event of a minor variation to a project plan. It would allow the Regulator to, by written notice, require the project proponent to give the Regulator a copy of the project plan as varied within 60 days after the notice is given. This would ensure the Regulator has a copy of the most updated version of the project plan.

 

710.    The project proponent would be liable to a civil penalty if they do not comply with the requirement to give the Regulator a copy of the project plan as varied. The maximum penalty for an individual would be 60 penalty units. A body corporate would be liable for five times this amount as a maximum penalty (see subsection 82(5) of the Regulatory Powers Act).

 

711.    There would also be a continuing civil penalty provision for the purposes of section 93 of the Regulatory Powers Act (subclause 113(4) and the note following subclause 113(4)). Under section 93 of the Regulatory Powers Act, if an act or thing is required under a civil penalty provision to be done within a particular period or before a particular time, then the obligation to do that act or thing continues until the act or thing is done (even if the period has expired or the time has passed), and the person commits a separate contravention of that provision in respect of each day during which the contravention occurs. Subclause 113(4) would provide that the maximum civil penalty for each day that a contravention of the requirement in clause 113(3) continues is 5% of the maximum civil penalty that can be imposed in respect of the contravention. This means that an individual may be liable to a civil penalty of 3 penalty units per day that they are contravening the requirement in subclause 113(3). This is considered appropriate, given the importance of ensuring that the most up to date version of a project plan for a registered biodiversity project is given to the Regulator in a timely manner.

Clause 114 - The rules may impose notification requirements

712.    Clause 114 would allow the rules to impose additional notification requirements. The rules would be able to make provision requiring the project proponent of a registered biodiversity project to notify the Regulator of a matter within a period specified in the rules (subclause 114(1)).

 

713.    Subclause 114(2) would require rules made for the purpose of subclause 114(1) to only require the notification of matters relevant to the operation of the Bill.

 

714.    It would be appropriate for the rules to be able to make provision for notification requirements for a matter relevant to the operation of this Bill. This would provide the discretion and flexibility that is necessary to allow the market to develop whilst ensuring that all matters relevant to the operation of the Bill can be captured. In addition, it would allow the rules to be tailored to different kinds of projects or biodiversity. However, the criteria set out at subclauses 114(1) and (2) would set appropriate parameters in the Bill that the Minister would need to comply with when making such rules. The rules would be subject to ordinary Parliamentary scrutiny processes, including disallowance and sunsetting.

 

715.    If a person is subject to a requirement under rules made for the purposes of subclause 114(1), the person would be required to notify the Regulator of the relevant matter within the period specified in the rules (subclause 114(3)).

 

716.    The project proponent would be liable to a civil penalty if they do not comply with the requirement to notify the Regulator of the matter required by the rules. The maximum penalty for an individual would be 60 penalty units. A body corporate would be liable for five times this amount as a maximum penalty (see subsection 82(5) of the Regulatory Powers Act).

 

717.    There would also be a continuing civil penalty provision for the purposes of section 93 of the Regulatory Powers Act (subclause 114(4) and the note following subclause 114(4)). Under section 93 of the Regulatory Powers Act, if an act or thing is required under a civil penalty provision to be done within a particular period or before a particular time, then the obligation to do that act or thing continues until the act or thing is done (even if the period has expired or the time has passed), and the person commits a separate contravention of that provision in respect of each day during which the contravention occurs. Subclause 114(4) would provide that the maximum civil penalty for each day that a contravention of the requirement in clause 114 continues is 5% of the maximum civil penalty that can be imposed in respect of the contravention. This means that an individual may be liable to a civil penalty of 3 penalty units per day that they are contravening the requirement in clause 114. This is considered appropriate, given the importance of ensuring that information that is relevant to the operation of the Act is notified to the Regulator in a timely manner.

PART 10 - INFORMATION-GATHERING POWERS

GENERAL OUTLINE

718.    Part 10 of the Bill would set out the information-gathering powers that may be exercised by the Regulator in order to monitor general compliance or to undertake more specific investigations into suspected breaches.

 

719.    The provisions in this Part are not intended to abrogate the privilege against self-incrimination

NOTES ON INDIVIDUAL CLAUSES

Clause 115 - Simplified outline of this Part

720.    Clause 115 would provide a simplified outline of Part 10 of the Bill. The outline is not intended to be comprehensive and has been included to assist readers to understand the substantive provisions of Part 10, rather than to replace these provisions. It is intended that readers will rely on the substantive clauses of Part 10.

Clause 116 - Regulator may obtain information or documents

721.    Clause 116 would allow the Regulator, by written notice, to require a person to give to the Regulator specified documents or information, or to make copies of specified documents and to give those copies to the Regulator.

722.    The Regulator would only be able to exercise the power in clause 116 to give a notice to a person if the Regulator believes, on reasonable grounds, that the person has information or documents that are relevant to the operation of the Bill (including the rules or another legislative instrument made under the Bill, or a relevant offence of the Crimes Act or Criminal Code).

 

723.    A notice given under clause 116 must relate to particular information or documents that are specified in the notice. It would not be able to be used to determine whether a person possessed incriminating documents, or to ensure that the person’s operations were in compliance with the Bill. In such circumstances, it would be appropriate for the Regulator to instead use the audit powers in the Bill (see Part 11) or the monitoring powers under the Regulatory Powers Act, as applied to this Bill (see Part 18 of the Bill).

 

724.    The documents or information must be given in the manner and within the timeframe specified in the notice. Subclause 116(3) would require the period specified in the notice must be no less than 14 days after the notice is given.

 

725.    Subclause 116(4) would have the effect that a person would be liable for a civil penalty if they do not comply with the requirement in clause 116 to provide information or documents (specified in a written notice) to the Regulator. The maximum penalty for an individual would be 60 penalty units. A body corporate would be liable for five times this amount as a maximum penalty (see subsection 82(5) of the Regulatory Powers Act).

 

726.    There would also be a continuing civil penalty provision for the purposes of section 93 of the Regulatory Powers Act (subclause 116(5) and the note following subclause 116(5)). Under section 93 of the Regulatory Powers Act, if an act or thing is required under a civil penalty provision to be done within a particular period or before a particular time, then the obligation to do that act or thing continues until the act or thing is done (even if the period has expired or the time has passed), and the person commits a separate contravention of that provision in respect of each day during which the contravention occurs. Subclause 116(5) would provide that the maximum civil penalty or each day that a contravention of the requirement in clause 116 continues is 5% of the maximum civil penalty that can be imposed in respect of the contravention. This means that an individual may be liable to a civil penalty of 3 penalty units per day that they are contravening the requirement in clause 116. This is considered appropriate, given the importance of ensuring that information or documents that are relevant to the operation of the Bill is provided to the Regulator in a timely manner.

727.    The requirement in clause 116 is not intended to override the common law privilege against self-incrimination or the common law penalty privilege. The privilege against self-incrimination would prevent the use of potentially self-incriminating information, or any other information, document or thing obtained as a direct or indirect consequence of giving the potentially self-incriminating information, in all criminal proceedings. In contrast, penalty privilege is the privilege against self-exposure to a civil or administrative penalty. It is a common law privilege that applies in the context of judicial proceedings and may be claimed by an individual to resist compulsion in the course of such proceedings.

 

728.    This means that an individual would not be required to comply with a notice given under clause 116 if the information or document requested would tend to incriminate that person. However, the common law privileges against self-incrimination or self-exposure do not apply to a body corporate. As such, a body corporate would be required to comply with a notice given under clause 116 to produce information or documents, even if that information or those documents would tend to incriminate the body corporate.

Clause 117 - Copying documents - compensation

729.    Clause 117 would have the effect that where a person is required (under clause 116) to make copies of documents and produce those documents to the Regulator, the person would be entitled to reasonable compensation paid by the Regulator (on behalf of the Commonwealth).

 

 

Clause 118 - Copies of documents

730.    Clause 118 would allow the Regulator to inspect, and make copies of, a document that a person is required to produce under clause 116, and to retain a copy of any documents produced.

Clause 119 - Regulator may retain documents

731.    Under clause 119, the Regulator would be able to take documents produced under clause 116 and retain possession of such documents for as long as is necessary.

 

732.    However, if the Regulator retains possession of a document, the Regulator would be required to provide a certified copy of that document to the person who would otherwise be entitled to possession of that document (subclause 119(2)). The certified copy would be required to be provided as soon as practicable. Until the certified copy is provided, the person who would otherwise be entitled to possession of the document must be allowed to inspect, make copies of, or take extracts from, the document (subclause 119(4)).

 

733.    Subclause 119(3) would have the effect that the certified copy must be received in all courts and tribunals as evidence as if it were the original. This is to ensure the person who otherwise would be entitled to possess the document would not be disadvantaged by the Regulator retaining possession of it.

PART 11 - AUDITS           

GENERAL OUTLINE

734.    Part 11 of the Bill would provide that the Regulator may require audits to be carried out concerning one or more aspects of a person’s compliance with the Bill and associated provisions. A robust audit framework would provide buyers of biodiversity certificates confidence in the value of a certificate and in the biodiversity outcomes that an associated registered biodiversity project has achieved or will achieve.

 

735.    Audits would also be part of the reporting framework in Part 9 of the Bill. However, unlike audits under Part 11, audits under Part 9 would not require a reasonable suspicion of non-compliance with the Bill and would need to satisfy the requirements in that Part.

 

736.    Part 11 would also authorise audit information to be used or disclosed by an audit team leader or a person assisting an audit team leader for a number of purposes, and would impose a secrecy provision to protect the unauthorised use or disclosure of certain harmful audit information (known as protected audit information).

NOTES ON INDIVIDUAL CLAUSES

Division 1 - Introduction

Clause 120 - Simplified outline of this Part

737.    Clause 120 would provide a simplified outline of Part 11 of the Bill. The outline is not intended to be comprehensive and has been included to assist readers to understand the substantive provisions of Part 11, rather than to replace these provisions. It is intended that readers will rely on the substantive clauses of Part 11.

Division 2 - Audits

Clause 121 - Compliance audits

738.    Clause 121 provides for a compliance audit for a person who is, or has been, the project proponent for a registered biodiversity project. A compliance audit would only be available where the Regulator has reasonable grounds to suspect that the person has contravened, is contravening or is proposing to contravene, the Bill (including the rules or another legislative instrument made under the Bill) (subclause 121(1)).

 

739.    The audits in Part 11 would not be the only kinds of audits under the Bill. Audits would also be part of the reporting framework in Part 9 of the Bill (see clauses 101 to 104A). However, unlike audits under Part 11, audits under Part 9 would not require a reasonable suspicion of non-compliance with the Bill and would need to satisfy the requirements in that Part. For instance, a biodiversity project report may be subject to audit under Part 9. In addition, an application to register a biodiversity project, or for a biodiversity certificate, may also be subject to audit under Parts 2 or 5 (respectively) of the Bill.

 

740.    A compliance audit under clause 121 would be an audit of one or more aspects of the person’s compliance with the Bill (including the rules or another legislative instrument made under the Bill). Unlike other audits (under clause 122), subclause 121(2) would make it clear that a compliance audit would involve the Regulator requiring, by written notice, the person being audited to:

 

·          appoint an audit team leader; and

 

·          arrange for the audit team leader to carry out the audit and to give the person a written report setting out the results of the audit; and

 

·          give the Regulator a copy of the audit report on or before a day specified in the notice.

 

741.    In other words, the person being audited would be responsible for arranging a compliance audit under clause 121 and paying any expenses associated with the audit.

 

742.    The audit team leader that is appointed to carry out the audit would be required to be a registered greenhouse and energy auditor (within the meaning of the NGER Act). If the notice from the Regulator specifies that the person must appoint a specific auditor (or must appoint an auditor from a list of auditors provided by the Regulator), the person must comply with this requirement. If the notice does not specify a specific auditor or list of auditors, the person would be able to appoint a registered greenhouse and energy auditor of their choice.

 

743.    The note following subclause 121(2) would refer the reader to section 75 of the NGER Act, which deals with the conduct of an audit by a registered greenhouse and energy auditor.

 

744.    Subclause 121(3) would require the notice to specify the type of audit to be carried out, the matters to be covered by the audit, the form of the audit report and the kinds of details it is to contain.

 

745.    Subclauses 121(4) to (8) would create two civil penalty provisions relating to compliance audits.

 

746.    The first civil penalty provision would be in subclause 121(4). This provision would require a person to provide the audit team leader, and any other persons assisting the audit team leader, with all reasonable facilities and assistance necessary for the effective exercise of the audit team leader’s duties under the Bill. Failure to do so would be a breach of a civil penalty provision. The maximum penalty for an individual would be 60 penalty units. A body corporate would be liable for five times this amount as a maximum penalty (see subsection 82(5) of the Regulatory Powers Act).

 

747.    Subclauses 121(5) and (6) would clarify the scope of the civil penalty provision in subclause 121(4):

 

·          subclause 121(5) would clarify that providing assistance that is reasonably nec