Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment Bill 2021 [and] Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Bill 2021



Download PDFDownload PDF

ISSN 1328-8091

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

BILLS DIGEST NO. 46, 2021-22 10 FEBRUARY 2022

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment Bill 2021 [and] Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Bill 2021 Dr Emily Gibson Science, Technology, Environment and Resources Section

Contents

The Bills Digest at a glance ................................................3

Background .............................................................. 3

Purpose of the Bills ................................................... 3

List of abbreviations ..........................................................4

Purpose of the Bill .............................................................5

Structure of the Bill ...........................................................5

Commencement details ....................................................6

Background .......................................................................6

International commitments ....................................... 7

Australia’s regulatory regime ..................................... 8

Review of the Ozone Protection and Synthetic Greenhouse Gas Management Program .................... 9 Committee consideration ................................................ 11

Selection of Bills Committee .................................... 11

Senate Standing Committee for the Scrutiny of Bills ........................................................................... 11

Policy position of non-government parties/independents ..................................................... 11

Position of major interest groups .................................... 11

Date introduced: 2 December 2021

House: House of Representatives

Portfolio: Environment

Commencement: See details under the subheading ‘Commencement details’ in this Digest. Links: The links to the Main Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website. The links to the Import Levy Amendment Bill and the Manufacture Levy Amendment Bill, their Explanatory Memoranda and second reading speeches can be found on the Bills’ homepages, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at February 2022.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

2

Financial implications ...................................................... 11

Statement of Compatibility with Human Rights ............... 12

Parliamentary Joint Committee on Human Rights ... 12 Key issues and provisions ................................................ 12

Main Bill ................................................................... 12

Updated objectives of the Act ................................ 12

Removal of exemption and new feedstock licence .................................................................... 13

Mandatory and additional licence conditions ........ 13 Fit and proper person test ...................................... 14

Licence suspension ................................................. 14

Consolidation of prohibition provisions ................. 15 Addition of fault-based offences for prohibitions and increased penalties .......................................... 15

Scrutiny concerns ................................................. 17

Compliance and enforcement ................................ 18

Extension of time for reporting requirements and payment of levy ............................................... 19

Information sharing ................................................ 20

Review of decisions ................................................ 21

Scrutiny concerns ................................................. 21

Expanded regulation making power ....................... 22

Scrutiny concerns ................................................. 23

Import Levy Amendment Bill .................................... 23

Levy on import of ODS equipment removed .......... 23 Removal of levy caps .............................................. 23

Additional considerations to exempt import of SGGs from requirement to pay a levy .................... 24

Manufacture Levy Amendment Bill .......................... 25

Removal of levy cap on manufacture of SGGs, HCFCs and methyl bromide .................................... 25

Additional considerations for exemption from levy for manufacture of SGGs ................................. 25

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

3

The Bills Digest at a glance

Background • Australia is a party to the Montreal Protocol on Substances that Deplete the Ozone Layer (the Montreal Protocol), which was signed in 1987 and entered into force in 1989. The ‘ozone layer’ provides important protection for life on earth by absorbing ultraviolet radiation (UV-B) from

the sun. The Montreal Protocol aims to protect the ozone layer by reducing the production and consumption of ozone depleting substances such as chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs).

• In 2014, the Government announced a review of the federal Ozone Protection and Synthetic Greenhouse Gas Management Program (OPSGG Program) which controls the manufacture, import, export and uses of ozone depleting substances in Australia.

• In 2017, amendments to the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 (OPSGG Act) implemented Australia’s international commitment to phase-down the import, export and production of HFCs from 1 January 2018 under the 2016 amendment to the Montreal Protocol (the Kigali Amendment), and added two new synthetic greenhouse gas gases (nitrogen trifluoride and PFC-9-1-18) to the OPSGG Program. The amendments also made changes to licensing and reporting requirements.

Purpose of the Bills • The Main Bill implements the second tranche of proposed measures stemming from the 2014 review of the OPSGG Program.

• The Main Bill amends the OPSGG Act to allow the Minister to suspend a person’s licence, clarify the licence and exemption requirements, increase the time allowed for submitting reports and paying levies, and reform the existing compliance and enforcement provisions by triggering the standard provisions of the Regulatory Powers (Standard Provisions) Act 2014.

• The Import Levy Amendment Bill and Manufacture Levy Amendment Bill (Levy Amendment Bills) make minor amendments to the Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Act 1995 and Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Act 1995 to allow the administration of the OPSGG Program to be cost recovered.

• The Levy Amendment Bills make amendments to the respective Acts to remove the caps on the rate at which levies can be set and allow the rate to be prescribed in the Regulations and remove the existing levy on the import of ozone depleting substance equipment.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

4

List of abbreviations Abbreviation Definition

BCM Bromochloromethane

CFC Chlorofluorocarbon

GWP Global warming potential

HBFC Hydrobromofluorocarbon

HCFC Hydrochlorofluorocarbon

HFC Hydrofluorocarbon

Import Levy Act Ozone Protection and Synthetic Greenhouse Gas

(Import Levy) Act 1995

Import Levy Amendment Bill Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment Bill 2021

Kigali Amendment Amendment to the Montreal Protocol on Substances that Deplete the Ozone Layer

Kyoto Protocol Kyoto Protocol to the United Nations Framework

Convention on Climate Change

Main Bill Ozone Protection and Synthetic Greenhouse Gas

Management Amendment (Miscellaneous Measures) Bill 2021

Manufacture Levy Act Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Act 1995

Manufacture Levy Amendment Bill Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Bill 2021

Montreal Protocol Montreal Protocol on Substances that Deplete the

Ozone Layer

NF3 Nitrogen trifluoride

O3 Ozone

ODS Ozone depleting substance

OPSGG Act Ozone Protection and Synthetic Greenhouse Gas

Management Act 1989

OPSGG Program Ozone Protection and Synthetic Greenhouse Gas

Management Program

PFC Perfluorocarbon

Regulatory Powers Act Regulatory Powers (Standard Provisions) Act 2014

SF6 Sulfur hexafluoride

SGG Synthetic greenhouse gas

UNFCCC United Nations Framework Convention on Climate

Change

UV Ultra-violet

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

5

Purpose of the Bill The purpose of the Ozone Protection and Synthetic Greenhouse Gas Management (Miscellaneous Measures) Amendment Bill 2021 (the Main Bill) is to amend the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 (OPSGG Act) to:

• update the OPSGG Act’s objectives to include a reference to the Paris Agreement1

• introduce a new licence for the import and manufacture of scheduled substances for use as a feedstock

• introduce new mandatory licence conditions for specific licences

• consolidate and expand the existing matters the Minister must consider in determining whether a person (including a body corporate) is a fit and proper person when making a decision to grant, renew, transfer, suspend or cancel a licence

• allow the Minister to suspend a person’s licence in certain circumstances

• increase the time allowed for industry to submit reports to the Minister and to pay levies

• reform the existing compliance and enforcement provisions, including adopting the standard provisions of the Regulatory Powers (Standard Provisions) Act 2014 (the Regulatory Powers Act) with minor modifications and introduce new information-gathering powers

• modernise the existing offence and penalty provisions

• introduce an internal review mechanism for reviewable decisions and

• allow and regulate the use or disclosure of information in certain circumstances.2

The Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment Bill 2021 (the Import Levy Amendment Bill) and Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Bill 2021 (the Manufacture Levy Amendment Bill) make minor amendments to

the Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Act 1995 and Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Act 1995 respectively to allow the administration of the Ozone Protection and Synthetic Greenhouse Gas Program (OPSGG Program) to be cost recovered as appropriate.

The Levy Bills make amendments to the respective Acts to:

• remove the caps on the rate that levies can be set

• remove the existing levy on the import of ozone depleting substance equipment and

• make other minor and machinery changes to improve the operation of the Acts and to modernise and update the drafting style.3

Structure of the Bill The Main Bill is comprised of one Schedule with two Parts:

• Part 1 contains the main amendments to the OPSGG Act:

- Item 1 amends the objectives of the Act to insert a reference to Australia’s obligations under the Paris Agreement

1. Paris Agreement, opened for signature 12 December 2015, ATS [2016] 24, (entered into force for Australia 9 December 2016). 2. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021, 2-3. 3. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment Bill 2021 [and] Ozone

Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Bill 2021, 2.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

6

- Items 2 to 49 insert clarifying provisions relating to the application of the Criminal Code Act 1995 and the Regulatory Powers (Standard Provisions) Act 2014, as well as ‘simplified outline’ and interpretation provisions, and add, repeal or amend definitions used in the Act

- Items 50 to 51 repeal an existing exemption relating to the import and manufacture of feedstocks and update the existing provisions relating to ship stores - Items 52 to 54 and 111 amend the existing prohibitions on dealing with scheduled substances and the discharge of scheduled substances - Items 55 to 83 amend the mandatory licence conditions and make minor clarifying

amendments to the licence application and renewal processes - Items 84 to 95 allow the Minister to suspend a licence, with a number of other items clarifying the application of existing provisions relating to a licence that has been suspended - Items 112 to 119 make minor amendments to reporting requirements - Items 120 to 145 adopt the standard provisions of the Regulatory Powers Act, with some

modifications, and provide for information sharing and internal review of decisions - Items 157 to 163 repeal and replace Parts I to XII of Schedule 1, specifying scheduled substances and their ozone depleting potential, and repeal Schedule 4 • Part 2 (Items 164 to 186) deals with the application of the proposed amendments and

transitional provisions.

The Import Levy Amendment Bill contains one Schedule which amends the Import Levy Act to remove the cap on levies and allow the prescribed rate of levies to be set, or worked out in accordance with a method prescribed, in the Regulations.

The Manufacture Levy Amendment Bill contains one Schedule which makes minor amendments to the Manufacture Levy Act to remove the cap on levies and allow the prescribed rate of levies to be set, or worked out in accordance with a method prescribed, in the Regulations.

Commencement details Sections 1 to 3 of the Main Bill commence on Royal Assent, while Schedule 1 commences on proclamation or six months after Royal Assent, whichever is earlier.

Sections 1 to 3 of the Import Levy Amendment Bill commence on Royal Assent. Schedule 1 commences at the same time as Schedule 1 of the Main Bill, however the provisions do not commence at all if that Schedule does not commence.

Sections 1 to 3 of the Manufacture Levy Amendment Bill commence on Royal Assent. Schedule 1 commences at the same time as Schedule 1 of the Main Bill, however the provisions do not commence at all if that Schedule does not commence.

Background The ozone layer is a gaseous layer of naturally occurring ozone (O3) molecules in the earth’s upper atmosphere (the stratosphere), 15 to 35 kilometres above the earth’s surface.4 This ‘ozone layer’ absorbs ultraviolet radiation, known as UV-B, from the sun, thereby protecting life on earth. UV-B is linked to skin cancer, genetic damage, and immune system suppression in living organisms, as well as reduced productivity in agricultural crops and the food chain.5

In 1974, it was discovered that some human-produced chemicals could lead to the depletion of the ozone layer.6 These ozone depleting substances (ODSs) include chlorofluorocarbons (CFCs), halons, carbon tetrachloride (CCl4), methyl chloroform (CH3CCl3), hydrobromofluorocarbons

4. ‘What is the ozone layer?’, Ozone Secretariat, United Nations Environment Programme. 5. ‘The ozone layer’, Department of Agriculture, Water and the Environment (DAWE), last updated 9 October 2021. 6. Paul Fraser, Nada Derek, Paul Krummel and Paul Steele, ‘What are ozone depleting substances?’, The Conversation, 13 September 2012.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

7

(HBFCs), hydrochlorofluorocarbons (HCFCs), methyl bromide (CH3Br), and bromochloromethane (CH2BrCl).7 These substances are (or were) used in refrigerators, air conditioners, fire extinguishers, foam, as aerosol propellants, agricultural fumigants, and as solvents for cleaning

electronic equipment.8

The Department of Agriculture, Water and the Environment (the Department) notes that the ozone layer becomes depleted in two ways:

Firstly, the ozone layer in the mid-latitude (e.g. over Australia) is thinned, leading to more UV radiation reaching the earth. Data collected in the upper atmosphere have shown that there has been a general thinning of the ozone layer over most of the globe. This includes a five to nine per cent depletion over Australia since the 1960s, which has increased the risk that Australians already face from over-exposure to UV radiation resulting from our outdoor lifestyle. Secondly, the ozone layer over the Antarctic, and to a lesser extent the Arctic, is dramatically thinned in spring, leading to an 'ozone hole'.9

It was later discovered that synthetic greenhouse gases (SGGs), introduced as replacements for ODSs because they do not damage the ozone layer, had significant global warming potential (GWP). GWP is a measure of how much heat a greenhouse gas traps in the atmosphere over a specific time compared to a similar mass of carbon dioxide (CO2).10 For example, compared to carbon dioxide, which is used as the base figure with a GWP of 1, the most commonly used SGG in Australia, HFC-134a, has a GWP of 1,430.11 The GWP of other SGGs is even higher: the GWP of perfluorocarbons (PFCs) is between 6,500-9,200, while the GWP of sulfur hexafluoride (SF6) is 22,800.12

International commitments The Montreal Protocol on Substances that Deplete the Ozone Layer (the Montreal Protocol) was designed to reduce the production and consumption of ODSs, thereby protecting the Earth’s ozone layer. The Montreal Protocol was signed in 1987 and entered into force in 1989.13

The Montreal Protocol sets binding progressive phase-out obligations for developed and developing countries for all major ODSs, including CFCs, halons and HCFCs. The Montreal Protocol has been amended six times to bring forward phase-out schedules and add new ozone depleting substances to the list of controlled substances.14 The most recent of these, the Kigali Amendment (which entered into force on 1 January 2019),15 seeks to implement a global phase down of 80 per cent of HFCs by 2047.16

The Montreal Protocol is generally regarded as ‘one of the most successful and effective environmental treaties’.17 Scientists predict that if the international community continues to meet its obligations under the Montreal Protocol, the ozone hole would close over the mid-latitudes

7. These substances deplete the ozone layer by releasing chlorine and bromine atoms into the stratosphere, which destroy ozone molecules. See further: ‘Montreal Protocol on Substances that Deplete the Ozone Layer’, DAWE, last updated 3 October 2021. 8. ‘Ozone depleting substances’, DAWE, last updated 3 October 2021. 9. ‘The ozone layer’, DAWE. 10. ‘Synthetic greenhouse gases’, DAWE, last updated 3 October 2021. 11. ‘Synthetic greenhouse gases’, DAWE. 12. ‘Synthetic greenhouse gases’, DAWE. 13. Montreal Protocol on Substances that Deplete the Ozone Layer, opened for signature 16 September 1987, ATS [1989] 18

(entered into force for Australia 17 August 1989). 14. ‘Montreal Protocol on Substances that Deplete the Ozone Layer’, DAWE. 15. Amendment to the Montreal Protocol on Substances that Deplete the Ozone Layer, opened for signature 15 October 2016,

ATNIF [2017] 15 (entered into force for Australia 1 January 2019). 16. Ozone Secretariat, ‘Kigali Amendment implementation begins’, News, UNEP, 3 January 2019. 17. ‘Montreal Protocol on Substances that Deplete the Ozone Layer’, DAWE; Ian Rae, ‘Saving the Ozone Layer: Why the Montreal

Protocol worked’, The Conversation, 10 September 2012.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

8

(which includes Australia) by 2050 and over the Antarctic by 2065.18 In 2016, scientists reported the first signs of healing in the ozone hole over the Antarctic.19

The ozone hole is recovering due to the Montreal Protocol and subsequent amendments banning the release of harmful ozone-depleting chemicals called chlorofluorocarbons or CFCs. If atmospheric chorine levels from CFCs were as high today as they were in the early 2000s, this year’s ozone hole would likely have been larger by about 1.5 million square miles (about 4 million square kilometers) under the same weather conditions.20

Australia’s regulatory regime The OPSGG Act and related Acts21 implement Australia’s obligations under the Montreal Protocol. The Department administers the OPSGG Program which controls the manufacture, import, export and major end-uses of ODSs in Australia.

The specific ODSs currently controlled under the OPSGG Act are CFCs, HBFCs, HCFCs, halons (1211, 1301 and 2402), carbon tetrachloride, methyl chloroform, methyl bromide, and bromochloromethane.22

However, the OPSGG Act also regulates SGGs. The SGGs that are controlled under the OPSGG Act are HFCs, perfluorocarbons (PFCs), sulfur hexafluoride and nitrogen trifluoride (NF3).23 SGGs account for around two per cent of Australia’s greenhouse gas emissions.24 This aspect of the

regime also implements Australia’s obligations under the United Nations Framework Convention on Climate Change (UNFCCC)25 and corresponding Kyoto Protocol.26 The greenhouse gases covered by the Kyoto Protocol are carbon dioxide, methane (CH4), nitrous oxide (N2O), HFCs, PFCs and sulfur hexafluoride.27 The Doha Amendment to the Kyoto Protocol, agreed in 2012, amended this list to add nitrogen trifluoride (NF3).28 Australia ratified the Doha Amendment in 2016.29

Together, ODSs and SGGs are referred to as ‘controlled substances’ under the OPSGG Program. The import, export and manufacture of controlled substances, and the import and manufacture of certain products or equipment containing (or designed to contain) some of these substances, is

18. ‘Polar ozone holes’, DAWE, last updated 3 October 2021. 19. Susan Soloman, Diane Ivy, Doug Kinnison, Michael Mills, Ryan Neely III and Anja Schmidt, ‘Emergence of healing in the Antarctic ozone layer’, Science 353 no. 6296 (15 July 2016): 269-274. 20. National Oceanic and Atmospheric Administration (NOAA), ‘Antarctic ozone hole is 13th largest on record and expected to

persist into November’, NOAA News & Features, 27 October 2021. 21. That is, the Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Act 1995 and the Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Act 1995. 22. ‘Import and export licences’, DAWE, last updated 8 October 2021. See OPSGG Act, Schedule 1. 23. ‘Import and export licences’, DAWE, last updated 8 October 2021. PFCs are used, for example, as refrigerants or as fire

extinguisher agents, although the aluminium industry is the main source of Australia’s PFCs emissions, which are a by-product of the smelting process. Sulfur hexafluoride is an insulating gas used by the electricity supply industry to prevent arcing in electrical switchgear. Emissions occur due to leakage and during equipment maintenance and decommissioning. Nitrogen trifluoride is used in Australia to manufacture semi-conductors and is mainly converted to a benign substance during the manufacturing process: ‘Synthetic greenhouse gases’, DAWE. 24. ‘Synthetic greenhouse gases’, DAWE; see also: Department of Industry, Science, Energy and Resources (DISER), National

Inventory Report 2019, 197, 2021, (Canberra: DISER, 2021), (Parliamentary Library calculation from data therein). 25. United Nations Framework Convention on Climate Change, opened for signature 9 May 1992, ATS [1994] 2 (entered into force Australia 21 March 1994). 26. Kyoto Protocol to the United Nations Framework Convention on Climate Change, opened for signature 11 December 1997, ATS

[2008] 2 (entered into force for Australia 11 March 2008). For further information, see: ‘What is the Kyoto Protocol?’, United Nations Framework Convention on Climate Change (UNFCCC). 27. Kyoto Protocol, Annex A. 28. Doha Amendment to the Kyoto Protocol, opened for signature 8 December 2012, ATS [2020] 18 (entered into force for Australia 31 December 2020). See further: Kate Loynes, Australia and the Doha Amendment: a quick guide, Research paper series, 2016-17, (Canberra: Parliamentary Library, 2016). 29. Malcolm Turnbull (Prime Minister), Julie Bishop (Minister for Foreign Affairs) and Josh Frydenberg (Minister for the Environment and Energy), ‘Ratification of the Paris Agreement on Climate Change and the Doha Amendment to the Kyoto Protocol’, media release, 10 November 2016.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

9

prohibited in Australia unless the correct licence or exemption is held.30 There are four types of import/export licences under the OPSGG Act:31

1. Equipment licences: allow for the import of equipment that contains SGGs and certain air conditioning and refrigeration equipment that contain a HFC or HCFC.32

2. Controlled substances licences: allow for the import, export and manufacture of bulk SGGs, HCFCs and methyl bromide.33

3. Essential uses licences: allow for the import, export and manufacture of CFCS, halons, methyl chloroform, carbon tetrachloride, and BCMs. These are only available for uses which meet a strictly limited range of essential use criteria approved by the parties to the Montreal Protocol, including laboratory and analytical uses.34

4. Used substances licences: allow for the import and export of used or recycled CFCs, halons, carbon tetrachloride, methyl chloroform, methyl bromide, HCFCs, HBFCs, bromochloromethane, HFCs, PFCs, sulfur hexafluoride and nitrogen trifluoride.35

There are some limited exemptions under the OPSGG Act, including for low volume importers of equipment, import of personal equipment, and medical or veterinary products.36

Licence holders are required to pay levies and to provide a report to the Department every six months detailing the type and amount of ODSs and SGGs manufactured, imported and/or exported, including in equipment.37

An annual report on the operation of the OPSGG Act is required to be prepared by the Minister and is included in the Department’s annual reports.38 As at 30 June 2021, there were 686 import licences.39 The Department’s 2020-21 Annual Report did not report separately on the amount of levies and fees received under the OPSGG Act, as had been done in previous years. The 2019-20 Annual Report indicates that no levies or licence fees were collected by the Department in 2019-20,40 while the 2018-19 Annual Report indicates that $1.314 million in levies and $0.58 million in licence fees were collected in 2018-19.41

Review of the Ozone Protection and Synthetic Greenhouse Gas Management Program On 23 May 2014, the then Minister for the Environment, Greg Hunt, announced ‘a comprehensive review of Ozone Protection and Synthetic Greenhouse Gas legislation’.42

30. ‘Import and export licences’, DAWE, last updated 8 October 2021. 31. OPSGG Act, section 13A. See also: ‘Import and export licences’, DAWE, last updated 8 October 2021. 32. OPSGG Act, subsection 13A(5). See also: ‘Equipment Licences (EQPLs)’, DAWE, last updated 20 October 2021. 33. OPSGG Act, subsections 13A(2) and (2A). A controlled substance licence covers ‘bulk’ gases: that is, gases in containers such as

cylinders. Controlled substance licences do not cover products or equipment such as refrigerators or car air conditioners which already have gas in them. These are covered by SGG equipment licences, which are required under subsection 13A(5) for the import of equipment that contains SGGs: see further: ‘Controlled substances licence to import synthetic greenhouse gases - HFCs, PFCs, SF6 and NF3’, DAWE, last updated 2 November 2021; ‘Controlled substances licence for hydrochlorofluorocarbons (HCFCs)’, DAWE, last updated 20 October 2021; ‘Controlled substances licences and feedstock permits - methyl bromide’, DAWE, last updated 20 October 2021. 34. OPSGG Act, subsections 13A(3) and (3A). See also: ‘Essential Uses Licences’, DAWE, last updated 20 October 2021. 35. OPSGG Act, subsection 13A(4). See also: ‘Used substances licences’, DAWE, last updated 20 October 2021. 36. ‘Exemptions - Do I need a licence?’, DAWE, last updated 3 October 2021. 37. ‘Import and export licences’, DAWE, last updated 8 October 2021. 38. OPSGG Act, section 68. 39. DAWE, Annual Report 2020-21, (Canberra: Australian Government, 2021), 154. 40. DAWE, Annual Report 2019-20, (Canberra: Australian Government, 2020), 186. 41. Department of Environment and Energy (DEE), Annual Report 2018-19, 281, (Canberra: DEE, 2019). 42. Greg Hunt (Minister for the Environment), ‘Ozone Review to Address Environment and Safety Concerns’, media release,

23 May 2014.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

10

The review had two objectives, being to identify opportunities to:

• reduce emissions of ODSs and SGGs in line with international efforts and

• improve and streamline the operation of the program, including reducing regulatory compliance costs.43

On 7 October 2015, Minister Hunt released an Options Paper, following an initial round of public consultation.44 Fifty-seven submissions were received.45 A final review report does not appear to have been publicly released. However, a Government Statement was issued on 5 May 2016, along with a list of Measures to achieve Emissions Reduction and Efficiency and Effectiveness gains in the Ozone Protection and Synthetic Greenhouse Gas Management Programme.46

Some of the key regulatory measures on this list included:

• an 85 per cent phase-down of HFC imports, commencing on 1 January 2018, with the 85 per cent phase-down being reached on 31 December 2036

• provision for bans on the import and manufacture of specified equipment containing specified high global warming potential HFCs and

• compliance powers being strengthened.47

Key ‘streamlining and effectiveness’ measures proposed by the review to ‘reduce the burden on business’ included:

• increase the low volume import exemption for HFC equipment from 10 to 25 kilograms

• extend the maximum duration of end use licences and permits from two to three years

• introduce licence renewals

• reduce reporting requirements from quarterly to twice yearly (while retaining flexibility for more frequent reporting if licence holders prefer to do so) and

• waiver of small levy debts up to $330.48

Several of these measures were implemented in 2017, following amendments to the OPGGS Act, Import Levy Act and Manufacture Levy Act. For more information, see the Parliamentary Library’s Bills Digest which considered those amendments.49

According to the Assistant Minister’s second reading speech for the Main Bill, the ‘bill introduces most of the remaining measures announced following the review of the program’.50

43. ‘Review of the Ozone Protection and Synthetic Greenhouse Gas Management Program’, DAWE, last updated 3 October 2021. 44. Greg Hunt (Minister for the Environment), ‘Australia leads the way in reducing ozone and synthetic greenhouse gas emissions’, media release, 7 October 2015. 45. ‘Consultation on the Ozone Protection and Synthetic Greenhouse Gas Management Programme options paper’, DAWE, last

updated 16 October 2021. 46. Department of the Environment (DoE), Government Statement: Improvements to the Ozone Protection and Synthetic Greenhouse Gas Management Programme to achieve emissions reductions and streamline its operation, (Canberra: DoE,

2016); DoE, Measures to achieve Emissions Reduction and Efficiency and Effectiveness gains in the Ozone Protection and Synthetic Greenhouse Gas Management Programme, (Canberra: DoE, April 2016). 47. ‘Review of the Ozone Protection and Synthetic Greenhouse Gas Management Program’, DAWE, last updated 3 October 2021. 48. ‘Review of the Ozone Protection and Synthetic Greenhouse Gas Management Program’, DAWE, last updated 3 October 2021. 49. Sophie Power, ‘Ozone Protection and Synthetic Greenhouse Gas Management Legislation Amendment Bill 2017’, Bills Digest, 106, 2016-17, (Canberra: Parliamentary Library, 2017). 50. Trevor Evans, Second Reading Speech: Ozone Protection and Synthetic Greenhouse Gas Management (Miscellaneous Measures) Bill 2021, House of Representatives, Debates, 2 December 2021, 6.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

11

Committee consideration

Selection of Bills Committee At its meeting on 1 December 2021, the Selection of Bills Committee deferred consideration of the Bills until its next meeting.51

Senate Standing Committee for the Scrutiny of Bills The Senate Standing Committee for the Scrutiny of Bills made comments in relation to several provisions in the Main Bill and requested further advice from the Minister on a number of issues.52 The Committee had no comment in relation to the Levy Amendment Bills.53 At the time of writing this Digest, the Minister was yet to respond. The Committee’s comments are discussed further in relation to the relevant provisions in the ‘Key issues and provisions’ section of the Digest.

Policy position of non-government parties/independents At the time of writing, non-government parties and independents do not appear to have commented directly on these Bills.

Position of major interest groups Major interest groups do not appear to have commented directly on these Bills.

Numerous stakeholders, including peak industry bodies such as the Air-Conditioning & Refrigeration Equipment Manufacturers Association of Australia (AREMA), Australian Refrigeration Mechanics Association, Fire Protection Association of Australia and the National Fire Industry Association, commented on the Options Paper released in October 2015 during the review of the OPSGG Program.54 Many of their concerns and comments related to the then-proposed phase down of HFCs and end use licences, and were addressed by the Government in the 2017 amendments to the OPGGS Act.

For more information on the 2017 amendments, see the Bills Digest.

Financial implications According to the Explanatory Memorandum to the Main Bill, the Main Bill ‘will have no financial impact on the Australian Government Budget’.55

According to the Explanatory Memorandum to the Levy Amendment Bills, there will ‘be no immediate financial impact from the proposed amendments’, although the Department intends to review the OPGGS Program cost recovery model following amendment of the legislation.56

The Assistant Minister noted in his second reading speech for the Levy Amendment Bills that the capped levy rate had been in place since 2003 and no longer reflected the current cost of

51. Senate Selection of Bills Committee, Report, (Canberra: The Senate, 2021), 4. 52. Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest, 1, 2022, 4 February 2022, 16-22. 53. Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest, v. 54. For all published submissions made to the consultation on the Options Paper, see: ‘Consultation on the Ozone Protection and

Synthetic Greenhouse Gas Management Programme options paper’, DAWE. 55. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021, 3. 56. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment Bill 2021 [and] Ozone

Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Bill 2021, 3.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

12

administering the OPSGG Program.57 The Government has stated that ‘any change to the levy rate made through Regulations would take place after the review of cost recovery arrangements and would be consistent with the Australian Government Charging Framework’.58

Statement of Compatibility with Human Rights As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bills’ compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act.

The Statement of Compatibility prepared for the Main Bill states that the Bill engages the following human rights:

• the right to health in Article 12(1) of the International Covenant on Economic, Social and Cultural Rights (the ICESCR)59

• the right to a fair trial and fair hearing in Article 14(1) of the International Covenant on Civil and Political Rights (the ICCPR)60

• the right to the presumption of innocence in Article 14(2) of the ICCPR

• the right to privacy in Article 17 of the ICCPR and

• the right to freedom of expression in Article 19(2) of the ICCPR.

The Government considers that the Main Bill is compatible because it promotes the right to health and to the extent to which it may limit the other human rights set out above, those limitations are reasonable, necessary and proportionate to achieving the legitimate aims of the Bill.61

The Government considers that the Import Levy Amendment Bill and the Manufacture Levy Amendment Bill are compatible because they do not raise any human rights issues.62

Parliamentary Joint Committee on Human Rights The Parliamentary Joint Committee on Human Rights considered the Bills and had no comment.63

Key issues and provisions

Main Bill

Updated objectives of the Act Section 3 of the OPSGG Act sets out the objectives of the Act. Paragraph 3(d) states that the OPSGG Act provides controls on the manufacture, import, export and use of SGGs for the purpose of giving effect to Australia’s obligations under the UNFCCC and the Kyoto Protocol. Item 1 of the

57. Trevor Evans, Second Reading Speech: Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment Bill 2021, House of Representatives, Debates, 2 December 2021, 7; Trevor Evans, Second Reading Speech: Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Bill 2021, House of Representatives, Debates, 2 December 2021, 8.

58. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment Bill 2021 [and] Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Bill 2021, 3. For more information see: ‘Australian Government Charging Framework’, Department of Finance, last updated 27 July 2020.

59. International Covenant on Economic, Social and Cultural Rights, opened for signature 16 December 1966, ATS [1976] 5 (entered into force for Australia on 10 March 1976). 60. International Covenant on Civil and Political Rights, opened for signature 16 December 1966, ATS [1980] 23 (entered into force for Australia (except Art. 41) on 13 November 1980; Art. 41 came into force for Australia on 28 January 1993). 61. The Statement of Compatibility with Human Rights can be found at pages 141-153 of the Explanatory Memorandum to the

Main Bill.

62. The Statement of Compatibility with Human Rights can be found at pages 26-29 of the Explanatory Memorandum to the Import Levy Amendment and Manufacture Levy Amendment Bills. 63. Parliamentary Joint Committee on Human Rights, Human Rights Scrutiny Report, 15, 2021, 8 December 2021, 35.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

13

Main Bill proposes to amend paragraph 3(d) to recognise that Australia also has obligations to reduce greenhouse gas emissions under the Paris Agreement.64

The Paris Agreement is a legal instrument adopted by the Conference of Parties to the UNFCCC and aims to ‘strengthen the global response to the threat of climate change’.65 Its stated goal, in Article 2 of the Agreement, is to limit the increase in the global average temperature to ‘well below 2 °C’ above pre-industrial levels.66

Removal of exemption and new feedstock licence Section 12A of the OPSGG Act has the effect that the import or manufacture of a scheduled substance used exclusively for feedstock is not regulated by the OPSGG Act, other than for reporting and record-keeping purposes.67 A feedstock is an intermediate substance used to manufacture other chemicals;68 it is generally entirely consumed or transformed in the manufacturing of the new substance and is not emitted to the atmosphere.69

The Explanatory Memorandum notes that there is ‘sometimes a factual issue as to whether the intended use of the scheduled substances is indeed feedstock use … and there is a need for assurance that the new chemical being manufactured is not itself a scheduled substance’.70

The Explanatory Memorandum states that ‘it is now considered appropriate that this exemption be removed’, and that this ‘would assist Australia to accurately meet the reporting requirements in Article 7 of the Montreal Protocol, and in responsibly managing scheduled substances so as to minimise emissions and impact on the atmosphere’.71

Item 50 repeals existing section 12A. Item 53 inserts proposed subsection 13A(5) which introduces a new licence for the import and manufacture of scheduled substances for use as a feedstock.

The Explanatory Memorandum notes that it is not anticipated that there would be an application fee for a feedstock licence, quota requirements would not apply (for HFCs and HCFCs), and the import and manufacture of feedstock would not be subject to a levy.72

Mandatory and additional licence conditions Section 18 of the OPSGG Act deals with the conditions imposed on licences granted under section 16 of the Act by the Minister. A table in subsection 18(1) contains mandatory licence conditions that apply to different types of licences, while subsection 18(4) allows the Minister to impose additional licence conditions on a case-by-case basis. Subsection 18(6) sets out examples of the kinds of conditions that the Minister may impose under subsection 18(4).

64. Paris Agreement, opened for signature 12 December 2015, ATS [2016] 24, (entered into force for Australia 9 December 2016). Item 33 of the Main Bill amends section 7 of the OPSGG Act to insert a definition of the Paris Agreement. 65. ‘Climate Change’, United Nations Sustainable Development Goals. 66. See further: Sophie Power, Paris Climate Agreement: a Quick Guide, Research paper series, 2017-18, (Canberra; Parliamentary

Library, 2017), 1. 67. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021, 21. 68. See definition of feedstock in section 7 of the OPSGG Act. 69. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous

Measures) Bill 2021, 21. 70. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021, 21. 71. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous

Measures) Bill 2021, 21-22. 72. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021, 21-22.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

14

Items 64 and 67 amend the table in subsection 18(1), adding new mandatory licence conditions for:

(i) a controlled substances licence that allows a licensee to manufacture, export or import methyl bromide (Item 1A of the table)

(ii) a licence (other than an equipment licence) that allows the licensee to import a scheduled substance (Item 7 of the table) and

(iii) a licensee whose licence has been suspended (Item 8 of the table).

Item 68 amends subsection 18(6) to add proposed paragraph 18(6)(ca) to provide, as an example, that the Minister can impose a condition on licences requiring the licensee to enter into an arrangement for the recovery, recycling or destruction of scheduled substances with a person approved by the Minister.

Fit and proper person test The OPSGG Act contains provisions requiring the Minister to be satisfied that a person (including a body corporate) is a fit and proper person before making certain decisions, such as the grant73 or transfer of a licence.74 The Minister may also cancel a licence if satisfied that a person (including a body corporate) is no longer a fit and proper person.75

Item 54 of the Main Bill inserts proposed section 13B which sets out the matters the Minister must consider in determining whether a person (including a body corporate) is a fit and proper person when making a decision whether to grant, transfer, suspend or cancel a licence. While proposed section 13B largely consolidates the existing matters that must be considered as currently set out in subsections 16(5) and 20(2), it adds ‘a person’s history in relation to environmental matters’76 and extends the considerations to each executive officer of the body corporate.77 Proposed section 13B does not limit the matters the Minister may take into account when choosing to grant, transfer, suspend or cancel a licence.78

Licence suspension Item 84 of the Main Bill inserts proposed section 19D which would allow the Minister to suspend a licence ‘in the event of minor breaches, or where it is felt that the licensee may be able to return to compliance’.79 Proposed subsection 19D(1) sets out the circumstances in which the Minister can suspend a licence:

(i) if the licensee is no longer a fit and proper person

(ii) if the licensee has breached a condition of the licence or

73. OPSGG Act, subsection 16(4) (grant of licence). Subsection 16(5) sets out the matters the Minister must have regard to when determining whether someone is a fit and proper person for the purposes of having a licence granted to them (noting that the Minister may also consider other matters). 74. OPSGG Act, subsection 19B(4) (transfer of licences). 75. OPSGG Act, paragraph 20(1)(a) (cancellation of licence). The Minister may also cancel a licence if satisfied that a person

(including a body corporate) has contravened a condition of the licence (paragraph 20(1)(b)). Subsection 20(2) sets out the matters the Minister must have regard to when determining whether someone is a fit and proper person for the purposes of cancelling a person’s licence (noting that the Minister may also consider other matters). 76. See Item 54, proposed subsection 13B(1) (Item 1 (a) of the table). 77. See Item 54, proposed paragraph 13B(2)(a). 78. Proposed subsection 13B(1). 79. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021, 61.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

15

(iii) if the licensee is uncontactable.

Proposed subsection 19D(4) clarifies that although a licensee is not able to undertake an activity that the licence would allow while the licence is suspended, the licence remains in force, thus ensuring that the licensee is required to comply with other obligations under the OPSGG Act.

The Main Bill proposes to make a number of consequential amendments to the OPSGG Act in relation to the new power of the Minister to suspend a licence. These include amendments to subsections 20(1) and 21(1) (Items 85 and 88) which ensure that references to a licence include a reference to a suspended licence, thereby allowing cancellation or surrender of a suspended licence.80

Proposed amendments to the Import Levy Act and Manufacture Levy Act similarly provide for the continuing liability of a holder of a licence that has been suspended, such that the holder of a suspended licence still has to pay the levy in respect of any imports or manufacturing occurring before or during that suspension.81

Consolidation of prohibition provisions Section 13 of the OPSGG Act currently prohibits the manufacture, import and export of HCFCs, methyl bromide, HBFCs, and other ODSs and SGGs, as well as equipment containing ODSs and SGGs. Item 52 repeals section 13 and replaces it with proposed sections 13, 13AA, 13AB and 13AC to ‘consolidate all prohibitions on unlicensed import, manufacture or export of scheduled substances or equipment in the same Part of the Act to streamline and reduce the complexity of the Act’.82 As is the case with the existing provisions, the proposed sections allow exemptions to the prohibitions to be prescribed in the Regulations.83

Item 155 repeals section 69G, which provides for the Regulations to prohibit or regulate equipment that contains or uses scheduled substances. Item 163 repeals Schedule 4, which contains provisions which prohibit equipment that contains or uses scheduled substances. These matters are incorporated into proposed sections 13, 13AA, 13AB and 13AC.

Addition of fault-based offences for prohibitions and increased penalties The OPSGG Act currently imposes a number of requirements on industry with respect to holding a licence, the import, manufacture and discharge of scheduled substances, and reporting. A contravention of any of these requirements is an offence of strict liability; it is sufficient to prove that the person breached the requirement without needing to prove fault.84

The Main Bill contains numerous proposed amendments, including in Items 52, 69, 132 and 145, which introduce new fault-based offences for the contravention of certain provisions.85 The physical elements of the offence are set out in the relevant proposed sections. Exemptions are provided in the relevant proposed sections or may be provided for in Regulations; these are

80. Item 85 proposes to amend subsection 20(1) of the OPSGG Act, relating to cancellation of licences; Item 88 proposes to amend subsection 21(1) of the OPSGG Act, relating to surrender of licences. 81. Item 4 of Import Levy Amendment Bill inserts proposed subsection 3(3) into the Import Levy Act; Item 3 of the Manufacture Levy Amendment Bill inserts proposed subsection 3(3) into the Manufacture Levy Act. 82. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous

Measures) Bill 2021, 23. 83. See: Ozone Protection and Synthetic Greenhouse Gas Management Regulations 1995. 84. See sections 13, 18, 44, 45, 45B, 45C, 46 and 50 of the OPSGG Act. Attorney-General’s Department (AGD), A Guide to Framing

Commonwealth Offences, Infringement Notices and Enforcement Powers, (Canberra: AGD, 2011), 22. See also section 6.1 of the Criminal Code Act 1995. 85. See for example, proposed subsections 13(1), 13(3), 13(5), 13AA(1), 13AA(3), 13AA(5), 13AB(1), 13AB(3) and 13AB(5) (all in Item 52), proposed subsection 18(7) (Item 69), proposed subsections 45B(4) and 45C(2) (Item 111), proposed subsection

60(4) (Item 132), proposed subsections 65U(3) and 65V(2) (Item 145).

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

16

consistent with existing exemptions provided for in the OPSGG Act. A person wishing to rely on a relevant exemption bears an evidential burden in relation to the matter; that is, the person must adduce or point to evidence that suggests a reasonable possibility that the exemption applies in their circumstances.86 If a defendant discharges his or her evidential burden, the prosecution must then discharge its legal burden to disprove the relevant matters beyond reasonable doubt.87 The Explanatory Memorandum states:

The reversal of the burden of proof is appropriate as the matter to be proved is a matter that would be peculiarly in the knowledge of the defendant...

In the event of a prosecution, it would be significantly more difficult and costly for the prosecution to disprove all possible circumstances than it would be for a defendant to establish the existence of one potential circumstance or purpose.88

The maximum penalty for breach of a fault-based provision is generally 500 penalty units ($111,000), with the maximum penalty for unauthorised use or disclosure of protected information (in proposed sections 65U and 65V) two years imprisonment or 180 penalty units ($39,960), or both.89

Separate provisions accompanying each of these fault-based offences provide that the person will also be committing an offence of strict liability, with a maximum penalty of 60 penalty units ($13,320).90 Additional provisions establish mirror civil penalty provisions and provide for a maximum pecuniary (or civil) penalty of between 300 and 600 penalty units for individuals.91 Body corporates are liable for a maximum penalty of five times the stated penalty unit amount.92

The maximum pecuniary (or civil) penalties are generally 100 penalty units ($22,000) higher than those currently provided for in the OPSGG Act.93 However, the maximum pecuniary penalty for the manufacture, import or export of an SGG or the import of SGG equipment are substantially

reduced.94

The Explanatory Memorandum sets out the Government’s justification for these amendments:

The combination of fault-based offence, strict liability offence and civil penalty provision would provide an adequate deterrent from [a (sic)] person [breaching the relevant provision], which has the potential to cause significant harm. It is also appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties… . It is expected criminal proceedings would be brought for conduct that is at the more serious end of the spectrum or that involves a high degree of malfeasance.

86. Section 13.3 of the Criminal Code Act 1995. 87. Subsection 13.1(2) of the Criminal Code Act 1995. 88. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021, 25.

89. Crimes Act 1914, section 4AA and the Notice of Indexation of the Penalty Unit Amount made under that section set the current value of a penalty unit at $222. 90. See for example, proposed subsection 13AC(2) (Item 52), proposed subsection 18(7A) (Item 69), proposed subsections 45B(5) and 45C(3) (Item 111), proposed subsection 60(5) (Item 132), proposed subsections 65U(4) and 65V(3) (Item 145). 91. See for example, proposed subsection 13AC(3) (Item 52), proposed subsection 18(7B) (Item 69), proposed subsections

45B(6) and 45C(4) (Item 111), proposed subsection 60(6) (Item 132), proposed subsections 65U(5) and 65V(4) (Item 145). 92. Crimes Act 1914, subsection 4B(3); Regulatory Powers Act 2014, subsection 82(5). 93. See OPSGG Act, section 65AC for existing maximum civil penalties. 94. See OPSGG Act, subsection 65AC(4A) which provides the maximum penalties for a breach of existing subparagraph 13(1)(a)(iii)

(manufacture, import or export of an SGG without a licence) and paragraph 13(1)(b) (import of SGG equipment without a licence). The existing maximum penalty for a breach of these provisions is 2,000 penalty units for an individual and 10,000 penalty units for a body corporate. Under the proposed amendments, the equivalent maximum penalty would be 600 penalty units for an individual or 3,000 penalty units for a body corporate. The Explanatory Memorandum does not provide an explanation for the reduction in maximum penalty.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

17

The size of the maximum penalty for both the fault-based offence and the civil penalty provision is appropriate as a deterrent. It reflects the seriousness of [breaching the relevant provision], which could in turn result in harm to human and environmental health. Such conduct may undermine the integrity of the regulatory framework provided for by the Act. This conduct may also result in the breach of Australia’s obligations under the Montreal Protocol and other relevant international treaties which could damage Australia’s international relations.

The maximum civil penalty of 600 penalty units is higher than the maximum penalty available for the criminal offence. This is intended to ensure that it will act as a deterrent, particularly for body corporates, and also recognises that being found liable to pay a civil penalty does not attract imprisonment or a criminal conviction.95

Proposed subsection 63(1) (inserted by Item 138) triggers the standard provisions of Part 5 of the Regulatory Powers Act which deal with the issuing of infringement notices, meaning that all strict liability offences and all civil penalty provisions in the OPSGG Act and the Regulations will be subject to an infringement notice scheme.

Scrutiny concerns The Senate Scrutiny of Bills Committee commented on the proposed reversal of the evidential burden of proof in proposed subsections 13(2), 13(4), 13(6), 13AA(2), 13AA(6), 13AA(7), 13AA(8), 13AA(9), 13AB(2), 13AB(4), 13AB(6), and 65U(2). The Committee observed that the Bill seeks to establish several defences which reverse the evidential burden of proof, with the elements of offence-specific defences prescribed by the regulations in some instances.96 The Committee noted that ‘at common law, it is ordinarily the duty of the prosecution to prove all elements of an offence’,97 and continued:

While in this instance the defendant bears an evidential burden (requiring the defendant to raise evidence about the matter), rather than a legal burden (requiring the defendant to positively prove the matter), the committee expects any such reversal of the evidential burden of proof to be justified.98

As noted above, the Explanatory Memorandum states that ‘the reversal of the burden of proof is appropriate as the matter to be proved is a matter that would be peculiarly in the knowledge of the defendant’.99 However, it was not clear to the Committee how this was the case, and the Committee ‘draws its scrutiny concerns to the attention of senators and leaves to the Senate as a whole the appropriateness of reversing the evidential burden of proof’ in the proposed provisions.100

The Committee raised scrutiny concerns that significant matters, including the key details of offence-specific defences, were proposed to be included in delegated legislation. The Committee stated its view that significant matters should be included in primary legislation unless a sound justification for the use of delegated legislation is provided. The Committee considered a desire for flexibility, as outlined in the Explanatory Memorandum, to be an insufficient justification and also draws this to the attention of senators.101

95. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021, 39. 96. Proposed subsection 13(2), 13(4), 13(6), 13AB(1), 13AA(2), 13AA(6), 13AA(7), 13AA(8), 13AA(9), 13AB(2), 13AB(4), and 13AB(6). 97. Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest, 17. 98. Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest, 17. 99. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous

Measures) Bill 2021, 25. 100. Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest, 18 and 20. 101. Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest, 18.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

18

The Committee raised a similar concern with respect to proposed subsection 45C(3), a strict liability offence provision relating to the use of an HCFC that was manufactured or imported on or after 1 January 2020 and the use of which is not for a purpose prescribed by the regulations. The Committee reiterated its view and observed that ‘the [E]xplanatory [M]emorandum does not provide a justification for leaving this significant matter to delegated legislation’.102 The Committee requested the Minister provide a detailed justification as to:

• why it is considered necessary and appropriate to leave the prescription of permitted uses of HCFCs for the purposes of offence and civil penalty provisions to delegated legislation; and • whether the bill can be amended to include at least high-level guidance regarding this matter on the face of the primary legislation.103

Compliance and enforcement Part VIII of the OPSGG Act concerns compliance and enforcement. Section 49 of the OPSGG Act allows the Minister to appoint inspectors. Item 123 of the Main Bill amends subsection 49(1) to substitute references to the Minister with references to the Secretary. Item 151 inserts proposed section 67AA which would allow the Secretary to delegate their powers under the Act or the Regulations to an SES level employee in the Department.

Items 127, 128 and 138 of the Main Bill replace a number of Divisions within Part VIII of the OPSGG Act with the standard provisions of the Regulatory Powers Act, with some modifications aimed at providing a comprehensive compliance regime given the subject matter of the OPSGG Act.104

The Regulatory Powers Act commenced on 1 October 2014 and ‘provides for a standard suite of provisions in relation to monitoring and investigation powers, as well as enforcement provisions through the use of civil penalties, infringement notices, enforceable undertakings and injunctions’.105

The Regulatory Powers Act only has effect where Commonwealth Acts are drafted or amended to trigger its provisions.

The Attorney-General’s Department advises that:

New or amending Acts that require monitoring, investigation or enforcement powers of the kind available under the Regulator Powers Act should be drafted to trigger the relevant provisions of the Act, unless there are compelling policy reasons to the contrary.106

The Explanatory Memorandum states:

Items 120 to 138 would amend the compliance and enforcement regime of the Act by adopting the standard suite of provisions under the Regulatory Powers Act, inserting new notice to produce powers and aligning the Act with Commonwealth regulatory best practice. The new compliance and enforcement regime would consist of monitoring and investigation powers, as well as enforcement

102. Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest, 19. 103. Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest, 19. 104. Item 127 repeals Divisions B, C, D, E, F and G of Division 1 of Part VIII. Item 128 repeals Division 2 of Part VIII. Item 138 repeals Divisions 4, 5, 6 and 7 of Part VIII.

105. ‘Regulatory powers’, Attorney-General’s Department website. For further information on regulatory powers, see: Christina Raymond, ‘Regulatory Powers (Standardisation Reform) Bill 2016’, Bills Digest, 42, 2016-17, (Canberra: Parliamentary Library, 2016), and Claire Petrie, ‘Regulatory Powers (Standardisation Reform) Bill 2020’, Bills Digest, 49, 2020-21, (Canberra: Parliamentary Library, 2021). 106. ‘Regulatory powers’, Attorney-General’s Department website.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

19

provisions through the use of civil penalties, infringement notices, enforceable undertakings and injunctions.107

The Explanatory Memorandum provides a table setting out the existing powers in the OPSGG Act, indicating how the existing powers would be retained by, or aligned with, the standard provisions in the Regulatory Powers Act, or where modifications would be made to the standard provisions to retain existing powers.108

The Explanatory Memorandum states that these modifications:

Would ensure that the regulatory powers in the Act are appropriately adapted to provide effective regulation in the context of non-compliance in relation to the import, export, manufacture and end use of ozone-depleting substances and synthetic greenhouse gases, and equipment containing those substances, consistent with Australia’s international obligations.109

For example, the following proposed amendments to the OPSGG Act modify how provisions of the Regulatory Powers Act apply to compliance and enforcement activities undertaken under the OPSGG Act:

• proposed subsections 51(2) and 53(2) provide for the following monitoring and investigation powers, which are additional to those set out in Parts 2 and 3 of the Regulatory Powers Act: (a) the power to take samples; (b) the power to remove, test and analyse such samples; (c) the power to secure premises entered under Part 2 or 3 of the Regulatory Powers Act; (d) the power to secure things on those premises for the purpose of sampling, testing or analysing those things; (e) and the power to secure a container on those premises that contains a thing where it is not reasonably practicable to secure a thing without also securing the container

• proposed subsection 53(5) modifies the investigation powers in Part 3 of the Regulatory Powers Act to allow for the operation of electronic equipment on premises entered under Part 3 of the Regulatory Powers Act and the use of a disk, tape or storage device that is on those premises to determine whether that equipment, disk, tape or storage device contains evidential material

• proposed subsections 51(3) and 53(7) allows the use of necessary and reasonable force against things (for example, to open a cabinet) when executing a monitoring warrant under Part 2 of the Regulatory Powers Act or an investigation warrant under Part 3 of the Regulatory Powers Act.

Extension of time for reporting requirements and payment of levy Subsection 46(1) of the OPSGG Act requires a person who engages in certain activity during a reporting period (for example, manufacturing, importing, exporting or destroying a scheduled substance) to give a report to the Minister. Item 114 of the Main Bill repeals and replaces subsection 46(1) ‘to simplify reporting obligations for industry and more closely align with Australia’s Montreal Protocol obligations’.110

Specifically, proposed subsection 46(1) will now only require a person who engages in the following activities to prepare a report to the Minister:

107. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021, 79. 108. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021, 80-87. 109. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous

Measures) Bill 2021, 80. 110. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021, 76.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

20

• manufacturing, importing or exporting a scheduled substance or

• manufacturing, importing or exporting equipment under an equipment licence.

The reporting obligation no longer applies to a person who destroys a substance or imports, exports or manufactures equipment where no licence is required.111

Item 115 amends subsection 46(1A), extending the reporting timeframe by 16 days (from 15 days to 31 days).

Section 69 of the OPSGG Act provides that licence levies are due and payable 60 days after the end of a reporting period (subject to Ministerial extension). Item 152 of the Main Bill amends paragraph 69(1)(a), extending the period in which licence levies are due and payable from 60 days

to 90 days.

Information sharing Item 145 of the Main Bill proposes to add new Part VIIIB to the OPSGG Act concerning information sharing. Proposed Part VIIIB is divided into four Divisions, with Division 2 concerning the use and disclosure of information by the Minister, Division 3 concerning the use and disclosure of information by entrusted persons, and Division 4 containing prohibitions on the use and disclosure of protected information.

Item 15 inserts the following definition of entrusted person in section 7 of the OPSGG Act: ‘the Minister, the Secretary, an APS employee in the Department, or any other person employed in, or engaged by, the Department’.112

Item 36 amends section 7 to provide that protected information means information of any of the following kinds obtained by an entrusted person:

(a) information the disclosure of which by the entrusted person could reasonably be expected to found an action by a person (other than the Commonwealth) for breach of a duty of confidence

(b) information the disclosure of which could reasonably be expected to prejudice the effective working of government

(c) information the disclosure of which could reasonably be expected to prejudice the prevention, detection, investigation, prosecution or punishment of one or more offences

(d) information the disclosure of which could reasonably be expected to endanger a person’s life or physical safety

(e) information the disclosure of which could reasonably be expected to prejudice the protection of public safety or the environment.

Division 2 of proposed Part VIIIB inserts proposed sections 65F to 65K which allow the Minister to disclose relevant information to a Commonwealth entity, State or Territory government body, and law enforcement body in certain circumstances, and also allows the Minister to disclose information if they have a reasonable belief that the disclosure is necessary to reduce serious risk to human health or to the environment.

111. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021, 76. 112. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021, 9.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

21

The Explanatory Memorandum provides that the vesting of this disclosure power in the Minister, rather than an entrusted person,113, is appropriate because the authorisation involves either:

• disclosure for the purpose of another entity’s function or powers; or

• a matter of public interest with a high bar to satisfy and that is only likely to be applicable in exceptional circumstances.114

Division 3 comprises of proposed sections 65L to 65T which allow entrusted persons to use or disclose information, including protected information, for specified purposes.

Division 4 establishes two offence provisions, proposed sections 65U and 65V, which prohibit the unauthorised use or disclosure of protected information by current or past entrusted persons or current or past officials of a Commonwealth entity.

The Explanatory Memorandum states that while ‘it is not expected that relevant information would generally include personal information within the meaning of the Privacy Act’,115 the provisions of Divisions 2 and 3 of proposed Part VIIIB are intended to constitute an authorisation for the purposes of the Australian Privacy Principle 6.2 (see Schedule 1 to the Privacy Act 1988).116

Review of decisions Section 66 of the OPSGG Act allows for applications to be made to the Administrative Appeals Tribunal (AAT) for the review of certain decisions made by the Minister.117 Item 145 of the Main Bill adds proposed Part VIIIC to the OPSGG Act which allows for internal merits review of certain decisions (listed in proposed section 65X) made under the OPSGG Act.

The Explanatory Memorandum states:

Reviewable decisions would need to be reviewed internally before they could be reviewed externally by the Administrative Appeals Tribunal, unless the original decision was made personally by the Minister.118

Where the original decision was made personally by the Minister, the applicant or licensee is barred from seeking internal review of the decision and must instead appeal to the AAT (proposed subsection 65Z(1)).

Following internal review by the Minister or their delegate of a reviewable decision, an applicant or licensee may then apply to have the decision reviewed by the AAT (proposed section 65ZC).

Scrutiny concerns The Senate Scrutiny of Bills Committee commented on proposed subsections 65Y(3) and 65ZB(3) which provide that a failure to provide a written notice of a decision, including the reasons for the decision and the details of person’s right to have the decision reviewed, would not affect the

113. Noting that in accordance with the proposed new definition of entrusted person in section 7 of the OPSGG Act (inserted by Item 15), the Minister is also an entrusted person. 114. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021, 113-114. 115. Privacy Act 1988. 116. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous

Measures) Bill 2021, 113. The Australian Privacy Principles govern standards, rights and obligations around the collection, use and disclosure of personal information, an organisation’s governance and accountability, integrity and correction of personal information, and the rights of individuals to access their personal information. 117. Section 66 of the OPSGG Act lists the various decisions which are subject to review by the AAT, including the decision to refuse to grant or transfer a licence or to cancel a licence. 118. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021, 122.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

22

validity of the original reviewable decision or a reconsideration decision. These are known as ‘no-invalidity’ clauses.

The Committee noted that there ‘are significant scrutiny concerns with no-invalidity clauses, as these clauses may limit the practical efficacy of judicial review to provide a remedy for legal errors’.119 The Committee advised that it ‘expects a sound justification for the use of no-invalidity clause to be provided in the [E]xplanatory [M]emorandum’120 and further indicated that it considered the explanation provided (administrative certainty) insufficient. The Committee requested more detailed advice from the Minister as to why it is considered necessary and appropriate to include the no-invalidity clause in the Bill.121

Expanded regulation making power Section 45A of the OPGGS Act allows regulations to make provision for matters outlined in subsection 45A(1). This includes regulating the sale, purchase or disposal of scheduled substances, regulating the storage, use or handling of scheduled substances, labelling requirements, and the conferral of relevant functions on persons or bodies. Item 107 proposes to insert proposed paragraph 45A(1)(ba) to allow the regulations to make provision for prohibiting or regulating the recovery, recycling or destruction of scheduled substances. The Explanatory Memorandum provides:

This would allow the regulations to include, for example, a mechanism for the Minister to approve arrangements for the recovery, recycling or destruction of scheduled substances and ensure scheduled substances are disposed of in an environmentally sound manner when they reach their end-of-life.122

Item 110 proposes to insert new subsections 45A(3), 45A(4) and 45A(5). Proposed subsection 45A(3) would allow the regulations to make provision for regulating something by providing for it, or anything relating to it, to be determined by the Minister, including by legislative instrument. The Explanatory Memorandum gives as an example a requirement for a person holding certain permits to have specific qualifications and comply with specific standards. These are currently listed in the regulations. The Explanatory Memorandum explains:

The purpose of this amendment is to allow the Minister to decide to list relevant qualifications or standards that must be met by permit applicants or holders in a legislative instrument when it is considered appropriate, rather than regulations.123

Proposed subsection 45A(4), overriding subsection 14(2) of the Legislation Act 2003, would ‘allow regulations made for the purpose of subsection 45A(1) to make provision in relation to a matter by applying, adopting or incorporating any matter contained in an instrument or other writing as in force or existing from time to time’.124

The Explanatory Memorandum explains that the purpose of this amendment is to allow the regulations concerning the end use of scheduled substances to incorporate documents (such as standards and qualifications) as existing from time to time. The Explanatory Memorandum describes the following distinction between the two proposed subsections:

119. Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest, 21-22. 120. Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest, 22. 121. Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest, 22. 122. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous

Measures) Bill 2021, 69. 123. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021, 71. 124. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous

Measures) Bill 2021, 71.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

23

It is anticipated that [proposed subsection 45A(4)] would be used where the relevant standards or qualifications remain in regulations and are updated on a regular basis (rather than in a legislative instrument under new subsection 45A(3), which is expected to be used to add new standards or qualifications quickly as needed).125

Proposed subsection 45A(5) provides that the regulations made for the purpose of section 45A must be consistent with Australia’s international obligations.

Scrutiny concerns The Senate Scrutiny of Bills Committee commented on proposed subsection 45A(4). The Committee outlined general scrutiny concerns where provisions in a Bill allow the incorporation of legislative provisions by references to other documents because of the prospect of changes being made to the law in the absence of Parliamentary scrutiny, and the potential for limited access to the incorporated documents. The Committee described a ‘consistent scrutiny view that where material is incorporated by reference into the law it should be freely and readily available to all those who may be interested in the law’.126 This is of particular relevance in the case of Australian Standards which are often only accessible on payment of a fee.

The Committee requested the Minister’s ‘advice as to whether standards and any other documents incorporated into the regulations will be made freely available to all persons interested in the law'.127

Import Levy Amendment Bill

Levy on import of ODS equipment removed Item 19 of the Import Levy Amendment Bill repeals section 4B of the Import Levy Act which imposes a levy on the import of ODS equipment under an equipment licence.

The Explanatory Memorandum states:

Imposing this levy is no longer considered appropriate as licences for the import of ODS equipment are only able to be granted under the OPSGG Act in very limited circumstances (such as where the equipment is essential for medical, veterinary, defence, industrial safety, public safety or scientific purposes, and no practical alternative exists). It is not considered appropriate to impose a levy on the import of ODS equipment in such circumstances.128

Relatedly, the long title of the Import Levy Act is amended by Item 1, removing the reference to ‘ODS equipment’.

Removal of levy caps Under the Import Levy Act, a levy is imposed on holders of certain licences who import specified scheduled substances.129 In each instance, a cap (maximum) on the prescribed rate of the levy is

125. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021, 71. 126. Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest, 21. 127. Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest, 21. 128. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment Bill 2021 [and] Ozone

Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Bill 2021, 15. 129. Import Levy Act, subsection 3A(1) for the import of bulk scheduled substances (SGGs) under a controlled substances licence, subsection 4(1) for the import of substances other than an SGG (including HCFCs and methyl bromide) under a controlled substances licence, subsection 4A(1) for the import of SGG equipment under an equipment licence, and subsection 4B(1) for

the import of ODS equipment under an equipment licence.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

24

provided.130 Items 8, 12, 15 and 17 of the Import Levy Amendment Bill propose to amend the definition of prescribed rate to remove the current caps and allow the prescribed rate to be an amount prescribed in the Regulations.131

For example, items 11 and 18 relating to the levy on the import of bulk scheduled substances and the import of SGG equipment respectively, insert proposed subsections 3A(12) and 4A(8) to prevent the Governor-General making Regulations which determine the prescribed rate unless the Minister is satisfied that the prescribed rate would recover no more than the Commonwealth’s likely costs of administering the OPSGG Program (and would therefore not amount to a tax).132

In each case, the Explanatory Memorandum states that:

The cap has been in place since the levy was instituted in 2003. As such it does not reflect the current cost of administering the OPSGG Program. Removing the cap would allow the levy to be adjusted periodically so that activities under the OPSGG Act and regulations are able to be fully cost recovered.133

Additional considerations to exempt import of SGGs from requirement to pay a levy Existing provisions in the Import Levy Act prescribe matters that the Minister must be satisfied of before making a recommendation to the Governor-General to make Regulations exempting the import of SGGs and SGG equipment from the import levy.134 The matters the Minister must be satisfied of are whether the imposition of the levy is impractical, or the prescribed purpose is a medical, veterinary, health or safety purpose.

For example, subsection 3A(3) allows the Minister to exempt the importer of SGGs from paying the levy where the SGG is to be used for purposes prescribed by the Regulations, while subparagraph 3A(9)(b)(v) allows the Minister to exempt a licensee from paying the levy if satisfied that the SGG is to be used for a purpose prescribed by the Regulations. Item 11 repeals existing subsections 3A(12) and 3A(13) and inserts proposed subsection 3A(12). This proposed subsection sets out in table format the existing matters set out in the Import Levy Act that the Minister must be satisfied of before recommending that the Governor-General make Regulations concerning the import of SGGs.135

130. Import Levy Act, subsection 3A(7) for the import of bulk scheduled substances (SGGs) under a controlled substances licence, subsection 4(5) for the import of substances other than an SGG (including HCFCs and methyl bromide) under a controlled substances licence, subsection 4A(5) for the import of SGG equipment under an equipment licence, and subsection 4B(4) for the import of ODS equipment under an equipment licence. 131. Item 8 concerns the import of SGGs; Items 12 and 15 concern the import of substances other than SGGs; and Item 17

concerns the import of SGG equipment. 132. Import Levy Amendment Bill, proposed subsection 3A(12) (item 2 of the table); proposed subsection 4A(8) (item 1 of the table). 133. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment Bill 2021 [and] Ozone

Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Bill 2021, 7. 134. Import Levy Act, subsections 3A(12) and (13) for the import of scheduled substances (SGGs) under a controlled substances licence and subsection 4A(9) for the import of SGG equipment under an equipment licence. 135. Import Levy Amendment Bill, proposed subsection 3A(12) (items 1 and 3 of the table). Item 18 repeals subsections 4A(8) and

(9) and inserts proposed subsection 4A(8) which makes similar amendments with respect to the Minister’s power to make Regulations exempting an importer of SGG equipment under an equipment licence from paying the levy.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

25

Manufacture Levy Amendment Bill

Removal of levy cap on manufacture of SGGs, HCFCs and methyl bromide Under the Manufacture Levy Act, a levy is imposed on the holders of a controlled substances licence who manufacture SGGs, HCFCs or methyl bromide.136 A cap (maximum) on the prescribed rate of the levy is provided.137

Items 6 and 12 of the Manufacture Levy Amendment Bill amend the definition of prescribed rate to remove the current caps and allow the prescribed rate to be an amount prescribed in the Regulations, or an amount worked out in accordance with a method prescribed in the Regulations.

As per the levies imposed by the Import Levy Act, the Explanatory Memorandum states:

The cap has been in place since the levy was instituted in 2003. As such, it does not reflect the current cost of administering the OPSGG Program. Removing the cap allows the levy to be adjusted periodically so that activities under the OPSGG Act and regulations are able to be fully cost recovered.138

Items 9 and 12 also amend the Manufacture Levy Act to prevent the Governor-General from making Regulations setting the prescribed rate unless the Minister is satisfied that the prescribed rate will recover no more than the Commonwealth’s likely costs of administering the OPSGG Program (and would therefore not amount to a tax).139

Additional considerations for exemption from levy for manufacture of SGGs The Manufacture Levy Act prescribes matters that the Minister must be satisfied of before making a recommendation to the Governor-General to make Regulations exempting the manufacture of SGGs from the manufacture levy.140 Subsection 3A(3) allows the Minister to exempt the manufacture of SGGs for prescribed purposes, while subparagraph 3A(7)(b)(v) allows the Minister to exempt a licensee from paying the levy if satisfied that the SGG is to be used for a purpose prescribed by the Regulations. The matters the Minister be satisfied of are whether the imposition of the levy is impractical, or the prescribed purpose is a medical, veterinary, health or safety purpose.

Item 9 repeals subsections 3A(9) and 3A(10) and inserts proposed subsection 3A(10), setting out in table format the existing requirements that must be satisfied before the Minister can make a recommendation to the Governor-General.

136. Manufacture Levy Act, subsection 3A(1) (SGGs), subsection 4(1) (HCFCs and methyl bromide). 137. Manufacture Levy Act, subsection 3A(5) (SGGs); subsection 4(4) (HCFCs and methyl bromide). 138. Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment Bill 2021 [and] Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Bill 2021, 20 and 24. 139. Manufacture Levy Amendment Bill, proposed subsection 3A(10) (Item 2 in the table) and proposed subsection 4(5). 140. Manufacture Levy Act, subsections 3A(10) and (11).

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

Ozone Protection and Synthetic Greenhouse Gas Management Amendment (Miscellaneous Measures) Bill 2021 [and] Ozone d h h ( ) d ll [ d] d h h

26

© Commonwealth of Australia

Creative Commons

With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia licence.

In essence, you are free to copy and communicate this work in its current form for all non-commercial purposes, as long as you attribute the work to the author and abide by the other licence terms. The work cannot be adapted or modified in any way. Content from this publication should be attributed in the following way: Author(s), Title of publication, Series Name and No, Publisher, Date.

To the extent that copyright subsists in third party quotes it remains with the original owner and permission may be required to reuse the material.

Inquiries regarding the licence and any use of the publication are welcome to webmanager@aph.gov.au.

Disclaimer: Bills Digests are prepared to support the work of the Australian Parliament. They are produced under time and resource constraints and aim to be available in time for debate in the Chambers. The views expressed in Bills Digests do not reflect an official position of the Australian Parliamentary Library, nor do they constitute professional legal opinion. Bills Digests reflect the relevant legislation as introduced and do not canvass subsequent amendments or developments. Other sources should be consulted to determine the official status of the Bill.

Any concerns or complaints should be directed to the Parliamentary Librarian. Parliamentary Library staff are available to discuss the contents of publications with Senators and Members and their staff. To access this service, clients may contact the author or the Library’s Central Enquiry Point for referral.

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.