Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2022-2023
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
WATER AMENDMENT (RESTORING OUR RIVERS) BILL 2023
ADDENDUM TO THE REVISED EXPLANATORY MEMORANDUM
(Circulated by the authority of the Minister for the Environment and Water,
the Hon Tanya Plibersek MP)
WATER AMENDMENT (RESTORING OUR RIVERS) BILL 2023
This addendum responds to the request of the Senate Standing Committee for the Scrutiny of
Bills in Scrutiny Digest No. 13 of 2023, dated 8 November 2023, to provide further explanatory
material on the Water Amendment (Restoring Our Rivers) Bill 2023 (the Bill).
Schedule 3 - item 2 - proposed section 100G - regulations may prescribe Water Markets
Intermediaries Code
After paragraph 285 on page 47 of the Revised Explanatory Memorandum, insert:
It is necessary and appropriate to enable the Water Markets Intermediaries Code (the Code) to
be made in delegated legislation as it is intended to largely mirror the existing industry codes
framework, administered by the Australian Competition and Consumer Commission (ACCC)
under Part IVB of the Competition and Consumer Act 2010 (CC Act). Prescribing the Code in
delegated legislation would ensure that water markets intermediaries are subject to the standard
safeguards that apply in similar industries. This approach would allow for greater flexibility to
update the Code in accordance with best industry practices and industry behaviours as they
evolve over time. This approach would allow the Code to respond quickly to changes in the
regulatory landscape and ensure that the Code remains an effective and useful tool in the overall
regulatory framework.
Proposed subsections 100G(3), 100G(4) and paragraph 100G(7)(b) have been included in the
Bill to allow flexibility for the Code to confer functions and powers on other bodies. As the
Code would be made in regulations, this would allow for conferrals to be added or updated
efficiently as the regulatory scheme establishes.
Proposed section 100G is modelled on section 51AE of the CC Act. As an example, in the
context of section 51AE of the CC Act and industry codes made under Part IVB of the CC Act,
the power to confer functions or powers on a person or body under a code has been relied upon
in the Competition and Consumer (Industry Codes--Franchising) Regulation 2014 (the
Franchising Code) to confer dispute resolution assistance functions on the Australian Small
Business and Family Enterprise Ombudsman.
The ACCC would be the appropriate enforcement agency for the Code under the proposed
amendments to section 137 of the Water Act 2007 (the Water Act) in the Bill. It is intended
that proposed section 100G may be used to confer functions and powers that would
complement, not duplicate, the ACCC's proposed role as the appropriate enforcement agency.
For example, similar to the Franchising Code, a dispute resolution assistance function could be
conferred on another body.
Any proposal to confer functions or powers conferred on a body other than the ACCC under
proposed section 100G would be expected to be subject to consultation with the ACCC, the
Australian Water Brokers Association and more generally, water market intermediaries and
their clients.
The Bill would allow for the proposed Code (as contained in the regulations) to provide for
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obligations relating to the keeping and retention of information and records, and powers to
compel information or documents to be given. Such information and records may include
personal information about intermediaries and their clients.
Record-keeping requirements and powers to compel information or documents, including
personal information, are important compliance mechanisms to ensure that those who are
regulated by the proposed Code comply with their obligations and are accountable for their
actions or omissions.
It is intended that information, which may include personal information such as a person's
name, address, water account and financial information, would be collected and stored by
intermediaries and may be disclosed by intermediaries under the Code to the ACCC, as the
regulator.
It is anticipated that most intermediaries would be body corporates, ABN holders, partnerships,
or trusts, which are not covered under the Privacy Act 1998. However, where applicable, the
Privacy Act 1988 would apply to personal information disclosed to the ACCC by
intermediaries.
The Bill would also provide safeguards for where information has been obtained by the ACCC
under the Water Act (for example, under section 100ZD of the Bill) including any personal
information. Such information would be defined as protected information for the purposes of
section 155AAA of the CC Act (see item 5 of Schedule 6 to the Bill) making that information
subject to those protections as outlined in the CC Act.
Schedule 3 - item 2 - proposed section 100ZA - ACCC may issue a public warning notice
After paragraph 350 on page 57 of the Revised Explanatory Memorandum, insert:
Proposed subsection 100ZA(1) is based on section 223 of the Australian Consumer Law
(Schedule 2 to the CC Act).
A public warning notice would include information about the conduct that the ACCC has
reasonable grounds to suspect may constitute a contravention of proposed Part 5 of the Water
Act (as inserted by the Bill) or the Code.
This provision in and of itself would not seek to limit the fundamental common law right of
procedural fairness. The ACCC's general principles in relation to enforcement and public
warning notices include:
• In exercising its enforcement discretion, the ACCC takes into account procedural
fairness and considers what is required to afford appropriate procedural fairness in the
particular circumstances of each case.
• A public warning notice could only be issued where the ACCC has formed the view
that it has reasonable grounds to suspect that certain conduct may constitute a
contravention of the Code and where the ACCC was affirmatively satisfied of certain
matters prescribed in proposed section 100ZA, including that it was in the public
interest to issue the notice. In the context of a similar power in section 223 of the
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Australian Consumer Law (Schedule 2 to the CC Act), the ACCC has publicly stated
that1:
o a key consideration for the ACCC in evaluating whether it is appropriate to issue
a public warning notice will be whether it considers there is an imminent need
to inform consumers so they can avoid suffering detriment; and
o the likely impact on the businesses involved will also be a key consideration.
While proposed section 100ZA would be interpreted in its own statutory context and the
particular circumstances of each case, the above considerations are likely to also be relevant to
the exercise of the power to issue a notice under proposed section 100ZA.
The ACCC has a range of enforcement tools and remedies that it may seek to use, depending
on the particular facts of each case, with a view to obtaining an appropriate and proportionate
enforcement outcome.
Schedule 3 - item 4 - proposed section 101B - announcement of water market decisions
On paragraph 426 on page 57 of the Revised Explanatory Memorandum:
Proposed section 101B is intended to replace existing section 12.50 of the Basin Plan (not
section 12.51) which currently sets out a similar requirement to make water announcements
generally available.
Schedule 6 - item 10 - proposed section 239AJ - power to require information, documents
and evidence
After paragraph 728 on page 113 of the Revised Explanatory Memorandum, insert:
The proposed maximum penalty in subsection 239AJ(5) would be appropriate because section
239AJ of the Water Act would likely be the ACCC's primary tool for investigating
contraventions of the water market integrity provisions in the Water Act, such as market
manipulation and insider trading, which attract significant penalties. For example, the penalty
for a contravention of the insider trading provision in proposed section 101H is up to 2,000
penalty units for an individual and at least 20,000 penalty units for a corporation (see proposed
section 101K). The penalty for non-compliance with a notice under proposed section 239AJ
must also be significant to avoid a potentially perverse outcome where a person could avoid
detection of significant misconduct (with a significant penalty) by not producing documents,
and be subject to a much smaller penalty.
Section 239AJ may be used in relation to individuals and corporations. It is appropriate that
the penalty for non-compliance be sufficient as a deterrent to require a corporation to comply
with a notice, and not be seen as a cost of doing business.
In addition, the penalty in subsection 239AJ(5) is broadly equivalent not only to those in section
155 of the CC Act but also to certain penalties in the Australian Securities and Investments
Commission Act 2001 (ASIC Act), which is a relevant comparison having regard to the water
market integrity functions that ACCC would perform under the Water Act. For example:
1 https://www.accc.gov.au/public-registers/public-warning-notice-register
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• a person who fails to comply with a requirement to appear to answer questions under
section 19 or produce books on financial products under section 31 of the ASIC Act is
liable to a penalty of 2 years imprisonment (subsection 63(1) of the ASIC Act).
• a person who fails to comply with a requirement to provide certain information in
relation to an acquisition or disposal of financial products under section 41 of the ASIC
Act is liable to a penalty of 120 penalty unit (subsection 63(2) of the ASIC Act).
In summary, the amount of penalty outlined under subsection 239AJ(5) is appropriate because
when considered in its legislative and regulatory context, it provides an effective deterrent to
the commission of the offence, reflects the seriousness of the offence and is consistent with
penalties for comparable offences in Commonwealth legislation. Therefore, the amount of
penalty in subsection 239AJ(5) would be consistent with the principles outlined in the Guide
to Framing Commonwealth Offences
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