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2008
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
NATIONAL GREENHOUSE AND ENERGY REPORTING AMENDMENT
BILL 2008
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Climate Change and Water,
Senator the Honourable Penny Wong)
NATIONAL GREENHOUSE AND ENERGY REPORTING AMENDMENT
BILL 2008
GENERAL OUTLINE
The National Greenhouse and Energy Reporting Amendment Bill 2008 (the Bill)
makes minor amendments to the National Greenhouse and Energy Reporting Act
2007 (the Act) to better reflect the original policy intent of the Act, and to better
facilitate its administration.
The Bill will also slightly expand the number of matters which may be published by
the Greenhouse and Energy Data Officer, in order to improve public access to
information on corporate use of energy and greenhouse gas emissions.
In particular, the Bill will:
· Make mandatory the separate public disclosure of scope 1 (direct) and scope 2
(indirect) greenhouse gas emissions;
· Confirm the ability of the Minister to specify conditions for the use of
alternative methods to calculate greenhouse gas emissions, and allow
publication of information relating to those methods;
· Simplify the regulatory burden and increase flexibility associated with the
registration of corporations under the Act;
· Confirm that the obligation of a registered corporation to comply with an
external audit extends also to members of the corporation's group;
· Clarify the provisions relating to reporting of greenhouse gas projects and
offsets of emissions; and
· Make other minor administrative amendments.
FINANCIAL IMPACT STATEMENT
The Bill will have no financial impact.
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NOTES ON INDIVIDUAL CLAUSES
Clause 1 - Short Title
1. This clause is a formal provision specifying the title of the Bill.
Clause 2 - Commencement
2. This clause sets out when each provision of the Bill will commence:
· Clauses 1 to 3 and items 2 to 7, item 11, items 13 to 22 and items 24 to 35 in
Schedule 1 will commence on the day after the Bill receives Royal Assent;
and
· Schedule 1, item 1, items 8 to 10, item 12 and item 23 will commence on a
date to be fixed by Proclamation. This will ensure that regulations made under
sections 15 and 16 of the Act remain in force and that definitions established
by the regulations are not impacted. New regulations, appropriate for the
sections as amended sections, will be prepared to come into force with the
same commencement date as these items.
Clause 3 - Schedule(s)
3. This clause is a formal clause providing that each Act specified in the Schedule is
amended or repealed as set out in the applicable items in the Schedule, and other
items in the Schedule have effect according to its terms.
SCHEDULE 1 - AMENDMENTS
National Greenhouse and Energy Reporting Act 2007
Item 1 - Section 7
4. This item inserts a definition of a business unit in section 7 of the National
Greenhouse and Energy Reporting Act 2007 (`the Act'). This definition is
required for the purposes of new subsection 24(1A) (inserted in Item 23 below)
which allows the Greenhouse and Energy Data Officer (GEDO) to publish totals
for each business unit. The term will be defined in the regulations.
Item 2 - Section 7
5. This item inserts a definition of penalty unit in section 7 of the Act as having the
same meaning as that specified in section 4AA of the Crimes Act 1914 (that is,
one penalty unit is equivalent to $110). This is required to clarify that penalty
units have the same meaning in the context of the civil penalties in the Act as they
do for criminal penalties.
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Item 3 - At the end of subsection 10(3)
6. This item inserts new paragraphs at the end of subsection 10(3) of the Act.
Subsection 10(3) enables the Minister to determine, by legislative instrument,
methods or criteria for methods by which the amounts of the emissions, reduction,
removal, or offsets of greenhouse gas emissions, or the production or consumption
of energy, are to be measured. The new paragraphs provide additional clarity
about matters which may be specified by the Minister under this subsection.
7. New paragraph 10(3)(c) confirms that the Minister may specify conditions
relating to the use of methods (or methods which meet criteria) which have been
determined by the Minister. For example, the Minister may specify that a method
(or methods which meet criteria) must be used for a minimum period of time, to
ensure consistency in reporting. Another condition which may be imposed is a
condition that any non-default method used by a corporation be assessed or
certified by an independent third party as meeting the criteria determined the
Minister. This will ensure that a corporation which uses a non-default method will
have greater certainty that it meets criteria specified by the Minister.
8. New paragraph 10(3)(d) confirms that the Minister may specify a rating system
that may be applied to different methods used to calculate greenhouse gas and
energy usage under the Act. A number of approaches for calculating emissions
and energy use will be available under the legislative instrument, for use in
different circumstances (e.g. different industry sector or emission types).
Depending on accuracy of the approach adopted, there will be differences in
emissions totals derived by a corporation for a particular facility. A ratings system
will provide a useful indicator for comparing results from different facilities and
corporate groups.
9. New paragraph 10(3)(e) confirms that the Minister may specify that a method (or
method meeting criteria specified by the Minister) may be assigned a rating. The
purpose of such a rating would be to allow transparent comparison of the quality
of information provided by different corporations in accordance with the Act (note
that Item 23 below will insert provisions allowing the GEDO to make such ratings
public).
Item 4 - Subsection 12(1)
10. This item repeals subsection 12(1) of the Act and replaces it with a new
subsection 12(1). New subsection 12(1) reconfirms the requirement that a
controlling corporation must apply to be registered if its group meets one of more
of the thresholds specified in section 13 during a financial year. The note to the
item replaces the title of section 12 for clarity purposes. The deadline for
applications, currently imposed by paragraph 12(1)(b) of the Act, is dealt with by
item 6 below.
Item 5 - Subsection 12(1) (note)
11. This item amends the note to subsection 12(1) of the Act to clarify that the only
subsection of section 12 that imposes a penalty provision is subsection 12(1).
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Item 6 - Subsection 12(2)
12. This item repeals subsection 12(2) of the Act and replaces it with new subsections
12(2), 12(3) and 12(4).
13. New subsection 12(2) provides that a controlling corporation need not apply for
registration under section 12 if it has already made an application under this
section and been registered by the GEDO, and is still currently registered. This
will ensure that a corporation, once registered, does not need to re-apply each year
a threshold is reached.
14. The effect of the new subsection 12(3) is to allow a controlling corporation to
make an application to be registered under Division 3 in advance of meeting
threshold specified in section 13 being met. This means a corporation may choose
to apply for registration based on a reasonable expectation that the threshold will
be met in the future. Allowing early registration allows greater flexibility for
corporations and may provide benefits such as earlier access to public disclosure
aspects of the Act, or access to capacity building activities.
15. New subsection 12(4) reconfirms that applications for registration in accordance
with this section must be made before 31 August after the end of the financial year
in which a threshold specified by section 13 was met.
Item 7 - Section 14
16. This item amends section 14 of the Act as a consequence of the amendments to
section 12 by items 4 and 6 above.
17. Section 14 of the Act is intended to be used by corporations which do not meet a
threshold specified by section 13 of the Act and are therefore not required to apply
to be registered, but which wish to report greenhouse gas projects in accordance
with section 21 of the Act.
Item 8 - Subsection 15(1)
18. This is a consequential amendment required as a result of item 10 below.
Item 9 - Paragraph 15(1)(c)
19. This item amends paragraph 15(1)(c) of the Act, to put a limit on the kind of
information that can be asked for in the regulations specifying the information that
must be included in applications for registration. This item is required as a
consequence of item 10 below.
Item 10 - Subsection 15(2)
20. This item repeals subsection 15(2) of the Act. This change is required as a result
of the amendments to section 12 of the Act (described in items 4 and 6 above) and
section 17 of the Act (described in item 13 below). The limitations currently
provided by subsection 15(2) will be provided by new paragraph 15(c).
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21. The amendments to section 15 provide greater flexibility for corporations to apply
for registration in advance of meeting a threshold, and reduce the amount of
information that will be required to `satisfy' the GEDO to register a corporation
applying in accordance with section 12. Accordingly, greater flexibility is required
for regulations on the content of applications to allow for a wider range of
circumstances to be dealt with.
22. It is intended to keep the requirements of applications for registration to a
minimum. Currently, the combinations of subsections 15(2) and 16(4) allow the
regulations to require a corporation to include details of all members of their
group as part of the application for registration, or none. The amendments to
section 15 and 16 (described in item 9 above and items 11 and 12 below) allow for
regulations to be made which limit the members of a corporation's group to the
members which are directly relevant for reporting purposes.
Item 11 - Paragraph 16(4)(a)
23. This item amends paragraph 16(4)(a) of the Act to allow the GEDO to include on
the National Greenhouse and Energy Register (the Register) the names of
controlling corporations which have been registered under Division 3. The current
words `must register' could have restricted the GEDO's ability to list corporations
registered on a discretionary basis (i.e., those corporations registered in
accordance with subsection 17(2)) on the Register.
Item 12 - Subparagraphs 16(4)(b)(i) and (ii)
24. This item repeals subparagraphs 16(4)(b)(i) and (ii) and replaces them with a new
subparagraph 16(4)(b)(i). This amendment is required as a result of the greater
flexibility provided in the registration of corporations allowed for as a result of
amendments to sections 12 and 17 of the Act. Currently, the effect of
subparagraph 16(4)(b)(i), in combination with other provisions, is to allow
regulations to cover the publication of all members of a corporation's group on the
register (and hence in an application for registration), or none. This increases the
burden on corporations applying for registration, as it requires the corporation to
provide information on corporations which are not directly relevant for reporting
purposes.
Item 13 - Subsection 17(1)
25. This item repeals subsection 17(1) of the Act and replaces it with a new
subsection 17(1). Currently, subsection 17(1) requires the GEDO to be `satisfied'
that a controlling corporation is required to apply under section 12 of the Act
before registration can take place. This creates a requirement for an application to
provide evidence that a corporation meets the thresholds specified by section 13 as
part of the application, significantly increasing the complexity of an application.
The new subsection 17(1) will require the GEDO to automatically register any
corporation which makes an application under section 12, provided the
requirements of section 15 have been met.
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Item 14 - Paragraph 19(2)(a)
26. This item amends paragraph 19(2)(a) of the Act as a consequence of items 4 and 6
above.
Item 15 - Paragraph 19(6)(b)
27. This item inserts additional words at the end of paragraph 19(6)(b) of the Act. The
effect of this amendment is to ensure that a report must be based on methods (or
methods which meet criteria) specified by the Minister under subsection 10(3) of
the Act, and any conditions which may be imposed by new paragraph 10(3)(c)
inserted by item 3 above.
Item 16 - Subparagraph 20(3)(a)(ii)
28. This item amends subparagraph 20(3)(a)(ii) of the Act to clarify that the GEDO
may make a declaration that a person is to provide information under section 19 if
the person is in a contractual relationship with the registered corporation or with a
member of the registered corporation's group, and the other conditions set out in
subsection 20(3) have been met.
29. The purpose of section 20 of the Act is to allow either a registered corporation or
another person to make an application to the GEDO that the other person should
provide information required under section 19 of the Act if the other person did
not wish to provide that information via the registered corporation.
30. The amendment clarifies that this provision extends to cases where the contractual
relationship is with a member of the corporation's group, rather than with the
registered corporation itself.
Item 17 - Paragraph 21(1)(b), Item 18 - Paragraph 21(1)(c), Item 19 -
Paragraph 21(2)(b), Item 20 - Paragraph 21(2)(c)
31. These items remove references to offsets of greenhouse gas emissions from
section 21 of the Act, which concerns voluntary reports made regarding reporting
of greenhouse gas projects. Offsets will instead be dealt with in the new section
21A inserted by item 22 below.
Item 21 - Paragraph 21(4)(a)
32. This item inserts additional words at the end of paragraph 21(4)(a) of the Act. The
effect of this provision is to ensure that a report must be based on methods (or
methods which meet criteria) specified by the Minister under subsection 10(3),
and any conditions which may be imposed by paragraph 10(3)(c) inserted by
item 3 above.
Item 22 - After section 21
33. This item inserts new section 21A into the Act. This section will allow a
registered corporation to provide reports relating to the offsets of greenhouse gas
emissions by the corporation, or one of the members of the corporation's group.
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The term `offsets' is to be defined in regulations (as provided by section 10 of the
Act).
34. Currently, the reporting of offsets of greenhouse gas emissions is provided for
under section 21 of the Act, which specifies that reports of offsets must arise from
greenhouse gas projects undertaken by the corporation or one of the members of
the corporation's group.
35. By separating the concept of `offsets' from projects undertaken by the registered
corporation or a member of its group, the new section 21A will allow a
corporation to report on offsets which may be created by the purchase of duly
recognised credits purchased from outside the corporation's group.
36. New subsection 21A(2) provides that reports submitted under this section must
include any information required by the regulations made for the purposes of this
subsection. Failure to include in the report the information specified in the
regulations will attract a civil penalty of up to 1,000 penalty units. This penalty is
considered appropriate as it is consistent with the existing penalty provided by the
civil penalty provision provided by section 21 of the Act.
37. The maximum penalty of 1,000 penalty units under new section 21A ensures
consistency with subsection 21(4) of the Act, which provides a civil penalty of
1,000 penalty units for reports on greenhouse gas projects not meeting the
requirements of that subsection. The penalty for inadequate reports under
section 21 and section 21A is half that allowed for contraventions of section 19
(which deals with mandatory reports under the Act).
38. New subsection 21A(3) specifies conditions that must be met in order for a report
to be considered to be a report for the purposes of this section.
Item 23 - Subsection 24(1)
39. This item repeals subsection 24(1) of the Act, and replaces it with new subsections
24(1), 24(1A), 24(1B), and 24(1C).
40. New subsection 24(1) expands slightly the nature of information which must be
published by the GEDO by 28 February following each financial year. This
subsection now requires the publication of `emissions' as separate `scope 1
emissions' and `scope 2 emissions'. The terms `scope 1 emissions' and `scope 2
emissions' will be defined in the regulations, but are generally understood in lay
terms to refer to `direct' and `indirect' emissions respectively. The provision of
separate scope 1 and scope 2 greenhouse gas emissions data to the public is seen
as necessary to provide appropriate levels of clarity on the emissions footprint of
Australian corporations.
41. New subsection 24(1A) provides the GEDO with the discretion to publish other
matters. This is subject to subsection 25(3) which provides that the GEDO may
not publish information that the GEDO is satisfied would reveal, or would be
capable of revealing, trade secrets or any other matter having a commercial value
that would be, or could reasonably be expected to be, destroyed or diminished if
disclosed.
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42. Paragraph 24(1A)(a) allows the publication of totals of scope 1 and scope 2
greenhouse gas emissions, energy production and energy consumption in relation
to members of a corporation's group or business units. This carries over the
existing ability for the GEDO to publish totals for members of a registered
corporation's group. A new concept introduced by this provision is to allow
information to be published according to a registered corporation's `business
units,' as defined in the regulations (see item 1 above).
43. Paragraphs 24(1A)(b) and 24(1A)(c) will allow the publication of information
relating to the methods used by corporations to calculate their emissions, and also
any rating assigned to those methods. The rating system to be used is that
established by new paragraph 10(3)(e), which will be inserted by item 3 above.
Publication of this information will provide greater transparency about the basis
on which a corporation has reported their greenhouse gas emissions, and allow for
more meaningful comparison of emissions reported by like corporations.
44. New subsection 24(1B) limits the ability of the GEDO to publish the information
referred to in subsection 24(1) unless a corporation's group meets a threshold
mentioned in paragraph 13(1)(a) of the Act or an application has been made to the
GEDO under section 25 for the information not to be published, or if an
application has been made, it was refused. The new subsection applies the
principles behind subsection 24(4) of the Act (which is to be repealed by item 26
below), but modifies those principles to ensure that information may be published
as falling between a specified range of values under new subsection 24(1C).
45. New subsection 24(1C) allows the GEDO to publish information mentioned in
subsection 24(1) as falling within a specified range of values if the GEDO accepts
an application made under section 25 of the Act requesting that certain types of
information not be published. This replaces the existing paragraph 24(3)(b) of the
Act, which is to be repealed by item 26 below.
46. The Explanatory Memorandum to the National Greenhouse and Energy Reporting
Bill 2007 explained that the intent was to allow `the GEDO to publish information
within a particular range of greenhouse gas emission or energy values where the
corporation's application under clause 25 has been assessed as being valid.' This
amendment will ensure the original policy intent of the Act in regard to
publication of information subject to a successful application made under
section 25 of the Act is achieved.
Item 24 - Subsection 24(2)
47. This item amends subsection 24(2) of the Act to clarify that information relating
to greenhouse gas projects may be published if the project is undertaken by a
member of a registered corporation's group, in addition to being undertaken by
the registered corporation itself.
48. This resolves a potential anomaly in the Act whereby a greenhouse project
undertaken by a registered corporation or member of its group could be reported
in accordance with section 21 of the Act, but information could only published if
the project were undertaken by the registered corporation itself.
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49. A note to this item creates a new subheading to ensure clarity of reading of
provisions created by section 24 of the Act dealing with publishing of
information.
Item 25 - At the end of subsection 24(2)
50. This item amends subsection 24(2) of the Act to clarify that the reporting of
information by the GEDO under subsection 24(2) is subject to subsection 25(3) of
the Act.
51. Section 25 allows a registered corporation or other person to make an application
to the GEDO requesting that information not be published in circumstances where
the information reveals, or is capable of revealing, trade secrets or other
information having a commercial value that would be, or could reasonably be
expected to be, destroyed or diminished if disclosed. Subsection 25(3) allows the
GEDO to accept such requests and not publish the information if he or she is
satisfied that such circumstances exist.
52. The amendment clarifies that information relating to greenhouse gas projects is
information covered by section 25 of the Act, and may be withheld by the GEDO
in accordance with subsection 25(3).
Item 26 - Subsections 24(3) and (4)
53. This item repeals subsections 24(3) and 24(4) of the Act and replaces them with a
new subsection 24(3).
54. Currently, subsection 24(3) specifies how the totals mentioned in subsection 24(1)
may be published, and subsection 24(4) of the Act specifies conditions under
which totals referred to in subsection 24(1) may not be published. As these
matters will be dealt with by new subsections 24(1B) and 24(1C) (inserted by
item 23 above), these provisions are no longer required.
55. New subsection 24(3) provides the GEDO with the ability to publish information
relating to the offsets of greenhouse gas emissions which is reported in accordance
with new section 21A (inserted by item 22 above). `Offsets' and `emissions' will
be defined by regulations made under section 10 of the Act.
56. This provision is consistent with subsection 24(2) of the Act, which deals with
publication of information relating to greenhouse gas projects reported under
section 21 of the Act.
57. As with subsection 24(2) of the Act (amended by items 24 and 25 above), offsets
may be reported if emissions are offset by either the registered corporation or a
member of its group, and a corporation may apply for information not to be
published in accordance with section 25 of the Act.
58. A note to this item creates new subheadings, to ensure clarity of reading of
provisions created by section 24 of the Act dealing with publishing of
information.
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Item 27 - At the end of subsection 28(1)
59. This item inserts additional words at the end of subsection 28(1) of the Act to
clarify that a registered corporation may request the GEDO to disclose greenhouse
and energy information to a member of the corporation's group. Without this
provision, it would not be possible for information relating to be a group member
to be disclosed at the request of the corporation.
Item 28 - Section 53
60. This item amends section 53 of the Act to clarify that the GEDO may delegate any
or all of his or her powers under the regulations as well as those under the Act to
an SES employee or an acting SES employee.
Item 29 - Subsection 73(4)
61. This item amends subsection 73(4) of the Act to clarify that the obligation of a
corporation to provide an external auditor with all reasonable facilities and
assistance necessary for the effective exercise of the auditor's duties extends to
both the registered corporation and all members of the corporation's group.
62. Use of the term `a corporation' in this subsection as currently in force could lead
to uncertainty as to which corporation the obligation extends to.
Item 30 - At the end of subsection 73(4)
63. This item replaces the civil penalty of 1000 penalty units applicable to
section 73(4) of the Act removed by item 31, and instead adds a civil penalty
provision with a maximum penalty of 250 penalty units for a contravention of
subsection 73(4) of the Act. The level of this penalty is consistent with that
established by subsection 74(3) of the Act.
Item 31 - Subsection 73(5)
64. This item amends subsection 73(5). The amendment clarifies that a registered
corporation is subject to the civil penalty provision of 1,000 penalty units in cases
where it does not comply with the requirements of a notice given by the GEDO
under subsection 73(2). The amendment to subsection 73(4) by item 30 above
provides a lower penalty for not providing reasonable assistance to an auditor,
therefore the reference to `and this section' is no longer required.
Item 32 - Subsection 74(2)
65. This item amends subsection 74(2) of the Act to clarify that a notice of a decision
to appoint an auditor may only be given by the GEDO to the registered
corporation referred to in subsection 74(1).
Item 33 - After subsection 74(2)
66. This item inserts a new subsection 74(2A) into the Act. New subsection 74(2A)
provides that all members of a corporation's group, including the registered
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corporation itself, must provide an external auditor appointed in accordance
subsection 74(1) with all reasonable facilities and assistance necessary for the
effective exercise of their duties. A failure to provide reasonable facilities and
assistance by a corporation or a member of a corporation's group will attract a
civil penalty with maximum penalty of 250 penalty units.
67. This provision is similar to subsection 73(4), and will ensure that consistent
requirements will be imposed on registered corporations and members of their
group by both audit provisions (see sections 73 and 74 of the Act).
Item 34 - Subsection 74(3)
68. This item amends subsection 74(3) to delete a requirement for the registered
corporation to provide assistance and facilities to auditors in the conduct of their
duties and is required as a consequence of item 33 above.
Item 35 - Application and saving provision
69. This item is provides saving and application clauses.
70. An application made under subsection 12(1) of the Act prior to item 4 coming into
force will not be affected by this item.
71. Items 8 to 10 and item 12 will apply in relation to any applications for registration
made on or after the commencement of the items. As noted in Clause 3, the
commencement date for these items is to be fixed by proclamation. As it is
intended that regulations made under sections 15 and 16 of the Act will be
amended effective from the same date as these items, no further saving provision
is required.
72. Item 13 will apply in relation to applications for registration made on or after the
commencement of the item. However, the validity of any registrations made under
subsection 17(1) of the Act prior to this item coming into effect will not be
affected.
73. The amendments made by items 15 and 21 require reports made under section 9 or
section 21 of the Act to be made in accordance with conditions imposed by the
Minister in accordance with new paragraph 10(3)(c) (amended by item 3 above).
These conditions will not be retrospective (in other words, they will not apply to
reports made prior to the amendments coming into force).
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