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2008 - 2009
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
NATIONAL GREENHOUSE AND ENERGY REPORTING
AMENDMENT BILL 2009
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 2009 (the Bill)
makes minor amendments to the National Greenhouse and Energy Reporting Act
2007 (the Act) to better reflect the original policy intent of the Act, and
to better facilitate its administration.
In particular, the Bill will:
. Clarify the definitions of a number of terms relating to greenhouse and
energy audits to be conducted under the Act;
. Require results of greenhouse and energy audits to be included on the
register established under section 16 of the Act;
. Extend the secrecy requirements to also cover audit information;
. Allow for decisions made by the Greenhouse and Energy Data Officer (GEDO)
not to register an auditor under the Act to be reviewed by the
Administrative Appeals Tribunal;
. Give the GEDO authority to audit entities who report under section 20 of
the Act;
. Expand the scope of the legislative instrument to be determined under
section 75 of the Act to include requirements for the preparation,
conduct and reporting of audits and allow for these requirements to be
determined by the Minister rather than the GEDO;
. Require potential auditors under the Act to apply to the GEDO for
registration and allow for detailed requirements on auditor registration
to be provided in regulations and a legislative instrument determined by
the GEDO;
. Make a number of administrative amendments consequential to the
substantive amendments outlined above; and
. Repeal the requirement for the GEDO to publish corporate level energy
production information.
FINANCIAL IMPACT STATEMENT
The Bill will have no financial impact.
NOTES ON INDIVIDUAL CLAUSES
Clause 1 - Short Title
1. This clause is a formal provision specifying the title of the Bill.
Clause 2 - Commencement
2. This clause sets out that the provisions of the Bill will commence on
the 28th day after the Bill receives Royal Assent.
Clause 3 - Schedule(s)
3. This 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Schedule is amended or repealed as set out in the applicable items in the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
Part 1 - Amendments relating to audits
National Greenhouse and Energy Reporting Act 2007
- Section 7
4. This item provides a definition of 'audit information' to allow for
protection of information collected during audits by the secrecy
provisions outlined in section 23 of the Act.
- Section 7
5. This item defines 'audit team leader' as a person appointed to conduct a
greenhouse and energy audit under sections 73 to 74A of the Act. The
audit team leader will lead the audit team and has responsibility for the
overall conduct and sign-off of greenhouse and energy audits conducted
under the Act.
- Section 7
6. This item defines 'audit team member' as a person who assists the 'audit
team leader' with audits under sections 73 to 74A of the Act. The use of
audit teams is designed to enable cross-disciplinary expertise to be
utilised in the audit.
- Section 7 (definition of external auditor)
7. This item repeals the definition of 'external auditor' to be replaced by
the new terms 'audit team leader' and 'registered greenhouse and energy
auditor'. This is to address stakeholder confusion about the use of the
term 'external auditor'. Requirements for auditors, including
independence, qualifications and expertise, will be developed under the
new section 75A (see Item 39).
- Section 7
8. This item provides a definition for a 'greenhouse and energy audit' as a
replacement for the term 'external audit'. Many stakeholders provided
feedback that the name 'external audit' was confusing. The new term
directly links the name of the audit to the subject matter - greenhouse
and energy information. The term audit is used as a generic indicator of
the type of activity to be undertaken and does not have the same meaning
as that applied under the Corporations Act 2001.
9. The details of the types of audits to be conducted under the Act will be
contained in the legislative instrument determined under section 75 of
the Act. This will most likely include requirements for both assurance
engagements and other audit / verification procedures.
- Section 7
10. This item provides a definition for 'registered greenhouse and energy
auditor' in line with later amendments establishing a registration
requirement for individuals to operate as auditors under the Act. See
item 39 for more detail on registration of auditors.
- At the end of paragraph 16(4)(b)
11. This item allows for regulations to be made for the results of
greenhouse and energy audits to be included on the (corporation) register
established by section 16 of the Act. This will allow for the GEDO to
publish the 'results' of audits. The GEDO currently has no power to
disclose information on the outcomes of audits to the public.
12. Stakeholders have indicated a significant interest in audit outcomes to
assist them understand the reliability of a corporation's published
greenhouse and energy information. Any decision by the GEDO to publish
such data would have to take a variety of issues into account including
the possibility of publishing inaccurate information and the potential
impacts on audited companies.
- Paragraph 23(1)(a)
13. This item will ensure that the secrecy provisions apply to audit
information by establishing an offence for release of 'audit information'
other than for the purposes of the Act or other Commonwealth, State or
Territory laws.
- Paragraph 23(2)(d)
14. This item replaces the term 'external auditor' with 'audit team
leader'. This is an administrative amendment consequential to the change
in terminology outlined in Items 2 and 4.
- Paragraph 23(2)(d)
15. This item will ensure that the requirement to keep certain information
secret will also apply to any audit team members appointed by the audit
team leader. The audit team leader will also be responsible for ensuring
audit team members are aware of their obligations under the Act.
- Subsection 30(2)
16. This item is an administrative amendment consequential to the addition
of the new section 73A outlined in Item 23.
- Paragraph 30(2) (paragraph (b) of the civil penalty)
17. This item is an administrative amendment consequential to the addition
of the new section 73A outlined in Item 23.
- Section 56
18. This item in conjunction with Item 14 clarifies that the list of
decisions reviewable by the Administrative Appeals Tribunal is a list of
options rather than a list of activities to be undertaken together.
- Paragraphs 56(a) to (h)
19. This item in conjunction with Item 13 clarifies that the list of
decisions reviewable by the Administrative Appeals Tribunal is a list of
options rather than a list of activities to be undertaken together.
- At the end of section 56
20. This item allows decisions by the GEDO not to register an individual as
an auditor under section 75A to be reviewed by the Administrative Appeals
Tribunal. It is intended that other decisions relating to the
registration of auditors will also be reviewable but will be included in
regulations to be developed under this section.
- Subdivision G of Division 4 of Part 6 (heading)
21. This item is an administrative amendment consequential to the change of
terminology from 'external audits' to 'greenhouse and energy audits' as
outlined in Item 5.
- Paragraph 73(2)(a)
22. This item allows for the GEDO to provide a list of possible auditors to
a corporation in a written notice requiring an audit to be undertaken
rather than only being able to specify a single auditor. This item also
makes a number of administrative amendments consequential to the change
of terminology from 'external auditor' to 'registered greenhouse and
energy auditor' as outlined in Items 4 and 6.
- Paragraph 73(2)(b)
23. This item replaces the term 'external auditor' with 'audit team
leader'. This is an administrative amendment consequential to the change
in terminology outlined in Items 2 and 4.
- Paragraph 73(2)(b)
24. This item removes the term 'external' from a reference to audits
conducted under the Act. This item is an administrative amendment
consequential to the change in terminology from 'external audits' to
'greenhouse and energy audits' outlined in Item 5.
- Paragraph 73(2)(c)
25. This item replaces the term 'external auditor' with 'audit team
leader'. This is an administrative amendment consequential to the change
in terminology outlined in Items 2 and 4.
- Before paragraph 73(3)(a)
26. This item requires that any notice provided by the GEDO under this
section specify the type of audit to be undertaken in addition to the
matters to be covered by the audit. The types of audits will be covered
in the legislative instrument to be determined under section 75 of the
Act.
- Subsection 73(4)
27. This item replaces 'external auditor' with 'audit team leader and any
audit team members' to clarify that corporate group members being audited
must provide 'all reasonable facilities and assistance necessary for the
effective exercise' of the duties of the auditor to all members of the
audit team rather than just the audit team leader.
- Subsection 73(4)
28. This item replaces the term 'external auditor' with 'audit team
leader'. This is an administrative amendment consequential to the change
in terminology outlined in Items 2 and 4.
- After section 73
29. This item creates a new section 73A that replicates section 73 but
allows for audits of entities that have provided information to the GEDO
under section 20 of the Act. The information provided by these entities
relates to the emissions and energy of facilities under the operational
control of registered corporations under the Act. This amendment will
ensure that entities that provide information to the GEDO via section 20
of the Act will also be subject to audit provisions.
- Subsection 74(1)
30. This item replaces 'an external auditor' with 'a registered greenhouse
and energy auditor as an audit team leader'. This amendment is
consequential to separating out the concepts of the 'audit team leader'
and the 'registered greenhouse and energy auditor'. In order to conduct
audits under the Act individuals will need to register with the GEDO
under the new section 75A (see Item 43). Registered greenhouse and energy
auditors will then be appointed as 'audit team leaders' either by the
GEDO or by the entity being audited. Appointed audit team leaders will be
required to conduct greenhouse and energy audits in accordance with the
requirements outlined in the legislative instrument determined under
section 75 of the Act.
- Subsection 74(1)
31. This item removes the term 'external' from a reference to audits
conducted under the Act. This item is an administrative amendment
consequential to the change in terminology from 'external audits' to
'greenhouse and energy audits' outlined in Item 5.
- Subsection 74(2)
32. This item replaces 'auditor' with the term 'audit team leader'. This
amendment is consequential to the change in terminology outlined in
Items 2 and 4.
- Subsection 74(2)(a)
33. This item replaces 'external auditor' with the term 'audit team
leader'. This is an administrative amendment consequential to the change
in terminology outlined in Items 2 and 4.
- After paragraph 74(2)(b)
34. This item requires that any notice provided by the GEDO under this
section specify the type of audit that will be undertaken in addition to
the matters to be covered by the audit. The types of audits will be
covered in the legislative instrument to be determined under section 75
of the Act.
- Subsection 74(2A)
35. This item replaces 'external auditor' with 'audit team leader and any
audit team members' to clarify that corporate group members being audited
must provide 'all reasonable facilities and assistance necessary for the
effective exercise' of the duties of the auditor to all members of the
audit team rather than just the audit team leader.
- Subsection 74(2A)
36. This item replaces 'external auditor's' with the term 'audit team
leader's'. This is an administrative amendment consequential to the
change in terminology outlined in Items 2 and 4.
- Subsection 74(3)
37. This item replaces 'external auditor' with the term 'audit team
leader'. This is an administrative amendment consequential to the change
in terminology outlined in Items 2 and 4.
- Subsection 74(3)
38. This item removes the term 'external' from a reference to audits
conducted under the Act. This item is an administrative amendment
consequential to the change in terminology from 'external audits' to
'greenhouse and energy audits' outlined in Item 5.
- After section 74
39. Similarly to Item 24, this item creates a new section 74A that
replicates section 74 but allows for audits of entities that have
provided information to the GEDO under section 20 of the Act. The
information provided by these entities relates to the emissions and
energy of facilities under the operational control of registered
corporations under the Act. This amendment will ensure that entities that
provide information to the GEDO via section 20 of the Act will also be
subject to audit provisions.
- Section 75
40. This item replaces the existing section 75 with a new section similar
in purpose to the existing section but with a number of amendments to
clarify its application.
41. The item will allow for the Minister to determine the requirements for
the preparation, conduct and reporting of audits by legislative
instrument under the Act rather than the GEDO.
42. The item replaces the term 'guidelines' with 'requirements' in relation
to the power to determine a legislative instrument for the preparation,
conduct and reporting of audits. This will allow for more specific and
detailed requirements to be determined rather than only guidelines.
43. The item replaces the term 'external auditor' with 'audit team leader'.
This is an administrative amendment consequential to the change in
terminology outlined in Items 2 and 4.
44. The item clarifies that the legislative instrument to be determined
under the section can include requirements relating to preparing for
audits in addition to requirements for the conduct and reporting of
audits.
45. The item allows for the legislative instrument prepared under this
section to provide for different types of greenhouse and energy audits to
be conducted under the Act. This amendment relates to Items 21 and 29
that require any notices about audits provided under sections 73 to 74A
to include the type of audit that is to be conducted in addition to the
matters to be covered by the audit.
- At the end of Subdivision G of Division 4 of Part 6
46. This item establishes a new section 75A outlining the requirement for
individuals to register with the GEDO if they wish to undertake audits
under the Act. The item provides for details of the registration process
to be outlined in subordinate legislation.
47. Subsection (1) requires the GEDO to establish a register on which to
keep the information of registered greenhouse and energy auditors.
48. Subsection (2) requires the GEDO to register applicants if they meet
the requirements for qualifications, knowledge, expertise, competence and
independence specified in the regulations and determined by the GEDO in a
legislative instrument created under subsection (4). It is intended that
this will include robust requirements for independence similar to the
requirements for auditors operating under the Corporations Act 2001
49. Subsection (3) requires the GEDO not to register applicants if they do
not meet the requirements in the regulations and determined by the GEDO
in a legislative instrument created under subsection (4).
50. Subsection (4) allows for the GEDO to determine by legislative
instrument specific ways of meeting the requirements for registration as
set out in regulations. This may include lists of appropriate training,
qualifications or international experience.
51. Paragraph (5)(a) allows for regulations to specify the form and content
of the register of auditors.
52. Paragraph (5)(b) allows for regulations to specify details for
publishing auditor information, e.g. name, organisation and expertise. In
some cases audits undertaken under the Act will allow for the auditee to
select their own auditor. A public list of registered auditors will
assist with this process.
53. Paragraph (5)(c) allows for regulations to specify details for the
form, content and method of applications for registration.
54. Paragraph (5)(d) allows for regulations to make provision for cost-
recovery through registration fees. Any decision to charge registration
fees will be made following consultation on draft regulations developed
under this section.
55. Paragraph (5)(e) allows for regulations to be made providing for
requirements around maintaining registration, e.g. notification of a
change in circumstances, ongoing professional development requirements
and reporting to the GEDO.
56. Paragraph (5)(f) allows for regulations to be made specifying
requirements for regular quality review of auditors.
57. Paragraph (5)(g) allows for regulations to be made giving the regulator
discretion to suspend registration in certain circumstances. It is
intended that the regulations will provide for this decision to be
reviewable by the Administrative Appeals Tribunal.
58. Paragraph (5)(h) allows for regulations to be made prescribing
circumstances for deregistration by the GEDO either at his/her discretion
or on application by the auditor. It is intended that the regulations
will also provide for this decision to be reviewable by the
Administrative Appeals Tribunal.
59. Paragraph (5)(i) allows for regulations to be made for inspection of
the performance of auditors on either a targeted or routine basis.
60. Paragraph (5)(j) allows for regulations to be made for other matters
relating to registration of auditors. This may relate to other
administrative or process requirements not covered by the other
paragraphs in this section.
61. Subsection (6) clarifies that any fee to be charged under paragraph
(5)(d) should not amount to a form of taxation.
62. Subsection (7) allows the GEDO to delegate part or all of the
administration of the auditor registration process and decision making to
a third party.
63. Subsection (8) limits the GEDO's power to delegate the making of the
determination under subsection (4) to other SES employees or acting SES
employees only.
- Paragraph 24(1)(c)
64. This item repeals paragraph 24(1)(c) of the Act removing the obligation
of the GEDO to publish corporate level totals of energy production. This
will ensure that publicly available energy production information is not
confusing or misleading. Corporate level energy production totals as
specified under the Act are not useable as they involve double counting
of primary and secondary energy production.
65. This item does not remove requirements under the Act to publicly
disclose greenhouse gas emissions or energy consumption information.
Neither does the amendment change existing requirements for corporations
that trigger thresholds to report all greenhouse gas emissions, energy
consumption and energy production data.
66. Collection of energy production data will remain an important component
of the Act to inform government and will underpin the Australian Energy
Statistics published by the Australian Bureau of Agricultural and
Resource Economics.