EXPLANATORY STATEMENT
Made by the Minister for Climate Change, Industry and Innovation
Australian National Registry of Emissions Units Act 2011
Australian National Registry of Emissions Units (Commonwealth foreign account in the Union Registry) Direction 2013
Subsection 86A(4) of the Australian National Registry of Emissions Units Act 2011 (ANREU Act) authorises the Minister to give directions, by legislative instrument, to the Clean Energy Regulator (the Regulator), acting on behalf of the Commonwealth, to open and operate an account within a foreign registry and do anything incidental, or ancillary to the opening or operation of such an account.
The Australian National Registry of Emissions Units (Commonwealth foreign account in the Union Registry) Direction 2013 (the ANREU Direction) will facilitate the implementation of an indirect link between the European Union Registry (Union Registry) and the Australian National Registry of Emissions Units (Australian Registry). An indirect registry link would not involve the direct transfer of units between registries, but would provide for an Australian‑issued international unit (AIIU) to be issued to an Australian Registry account upon the transfer of a European allowance unit into an Australian Government account in the European Union Registry (Union Registry).
The indirect link is implemented by the Clean Energy Legislation (International Linking) Amendment Regulation 2013 (International Linking Amendment Regulation). The Government announced in 2012 that the indirect link would be established by 1 July 2015.
The ANREU Direction will direct the Regulator, on behalf of the Commonwealth, to open and operate a Commonwealth foreign registry account in the Union Registry (Commonwealth Union Registry account) by:
- requiring the Regulator to open the account and in doing so comply with European Commission requirements;
- setting out the framework within which the Regulator must operate the account; and
- requiring that the Regulator must close the account if prescribed conditions are met.
A Statement of Compatibility with Human Rights has been completed for the ANREU Direction, in accordance with the Human Rights (Parliamentary Scrutiny) Act 2011. The Statement’s assessment is that the ANREU Direction is compatible with human rights because it either does not engage those rights or, to the extent that it may limit human rights, those limits are reasonable, necessary and proportionate. A copy of the Statement is at Attachment A.
Details of the ANREU Direction are set out in Attachment B.
The ANREU Direction is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The ANREU Direction commences on the day after it is registered.
Consultation
On 28 August 2012, the Minister for Climate Change, Industry and Innovation, the Hon Greg Combet AM MP, and the European Union Commissioner for Climate Action, Ms Connie Hedegaard, announced that an interim one-way link between Australia’s emissions trading scheme and the European Union Emissions Trading System would commence on 1 July 2015, with a direct link to be established no later than 1 July 2018.
The ANREU Direction was not released for public consultation as it provides ministerial directions to the Clean Energy Regulator concerning administrative matters and does not regulate any other party.
No concerns about the opening and operation of a Commonwealth Union Registry account were raised during public consultations on the joint consultation paper Registry options to facilitate linking of emissions trading systems and the exposure draft of the International Linking Amendment Regulation that was publicly released by the then Department of Climate Change and Energy Efficiency (DCCEE) and the European Commission in March 2013. The then DCCEE held consultation meetings with business and legal stakeholders on the International Linking Amendment Regulation and received 21 written submissions.
Authority: Section 86A of the Australian National Registry of Emissions Units Act 2011
ATTACHMENT A
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Australian National Registry of Emissions Units (Commonwealth foreign registry account in the Union Registry) Direction 2013
The legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Australian National Registry of Emissions Units (Commonwealth foreign registry account in the Union Registry) Direction 2013
The Australian National Registry of Emissions Units (Commonwealth foreign account in the Union Registry) Direction 2013 (the ANREU Direction) will facilitate the implementation of an indirect link between the European Union Registry (Union Registry) and the Australian National Registry of Emissions Units (Australian Registry). An indirect registry link would not involve the direct transfer of units between registries, but would provide for an Australian‑issued international unit (AIIU) to be issued to an Australian Registry account upon the transfer of a European allowance unit into an Australian Government account in the European Union Registry (Union Registry).
The indirect link is implemented by the Clean Energy Legislation (International Linking) Amendment Regulation 2013 (International Linking Amendment Regulation). The Government announced that the indirect link would be established by 1 July 2015.
The ANREU Direction will facilitate the implementation of the indirect link by directing the Clean Energy Regulator (the Regulator), on behalf of the Commonwealth, to open and operate a Commonwealth foreign registry account in the Union Registry (Commonwealth Union Registry account) by:
- requiring the Regulator to open the account and in doing so comply with European Commission (EC) requirements;
- setting out the framework within which the Regulator must operate the account; and
- requiring that the regulator must close the account if prescribed conditions are met.
Human rights implications
The amendments engage the right to privacy under Article 17 of the International Convention of Civil and Political Rights.
The Regulator must open and operate an account in the Union Registry to facilitate an indirect link between the Australian Registry and the Union Registry. Subsection 5(2)(b) of the ANREU Direction provides that the Regulator may be required to nominate staff of the Regulator to be authorised representatives of the Regulator for the purposes of accessing the account and initiating or approving transactions in relation to the account. Subsection 5(2)(c) provides that the Regulator may need to provide evidence of the identity of the authorised representatives. Staff of the Regulator may then be required to provide the Regulator with relevant personal information such as their name, date of birth, address of permanent residence or certified copies of photographic identification such as a passport. The information would be submitted by the Regulator to the EC, The collection of information would be limited to what is necessary to identify the staff of the Regulator and to satisfy the EC of the person’s identity to the extent required by:
- EC Registry Regulation (defined in section 4 of the ANREU Direction); and
- any terms agreed between the European Commission, the central administrator of the Union Registry and a national administrator of a European member state registry located within the Union Registry.
The treatment is neither arbitrary nor unlawful.
The Regulator will not publicly disclose the personal information of staff of the Regulator provided for the purpose of accessing the Commonwealth Union Registry account and initiating or approving transactions in relation to the account. The information will be regulated and treated in accordance with the secrecy provisions set out in the Clean Energy Regulator Act 2011 and the Privacy Act 1988.
Conclusion
The ANREU Direction is compatible with human rights because it does not engage those rights or, to the extent that it may limit human rights, those limits are reasonable, necessary and proportionate.
Greg Combet
Minister for Climate Change, Industry and Innovation
ATTACHMENT B
Australian National Registry of Emissions Units (Commonwealth foreign registry account in the Union Registry) Direction 2013
Section 1 – Name of direction
Section 1 provides that the name of the direction is the Australian National Registry of Emissions Units (Commonwealth foreign registry account in the Union Registry) Direction 2013 (the ANREU Direction).
Section 2 – Commencement
Section 2 provides that the ANREU Direction commences on the day after it is registered.
Section 3 – Authority
Section 3 provides that the ANREU Direction is made under subsection 86A(4) of the Australian National Registry of Emissions Units Act 2011 (ANREU Act).
Section 4 – Definitions
Section 4 provides definitions of the terms ‘Act’, ‘EC Registry Regulation’, ‘European Economic Area’, ‘Regulations’ and ‘Union Registry’, which are terms used in the ANREU Direction. Section 4 also notes that other words and expressions used in the Direction such as Commonwealth foreign registry account, European allowance unit and Registry, are defined in section 4 of the ANREU Act.
Section 5 – Complying with European Commission requirements
Section 5 provides that the Clean Energy Regulator (the Regulator) must open a Commonwealth foreign registry account in the Union Registry (Commonwealth Union Registry account) in accordance with:
- the EC Registry Regulations; or
- any terms agreed between the Australian Government or the Regulator and the European Commission, the central administrator or the national administrator.
In opening a Commonwealth Union Registry account, the Regulator may be required to comply with requirements for making an application, nominating staff of the Regulator to operate the account and providing evidence of their identities, and ensuring any information or document provided with the application is complete, up-to-date and accurate. The Regulator may also be required to do other things related to opening the account such as paying account fees or opening a bank account in the European Economic Area.
Section 6 – Continuity of operation
Section 6 provides that the Regulator must ensure the Commonwealth Union Registry account, as far as it is within the Regulator’s control, operates without interruption. In particular the Regulator must ensure continuity of the Commonwealth Union Registry account’s operation by complying with any requirements or restrictions that are set out in:
- the ANREU Act;
- the Australian National Registry of Emissions Units Regulations 2011 (the ANREU Regulations);
- the EC Registry Regulation;
- the laws of the European country in which the central administrator of the Union Registry or the national administrator of a European member state registry within the Union Registry is located; or
- any terms agreed between the Australian Government or the Regulator and the European Commission, the central administrator or the national administrator.
Section 7 – Conditions for closure
Section 7 provides that the Regulator must close the Commonwealth Union Registry account when the specified conditions are met.
The first condition is that an international agreement is in force between Australia and the European Union that allows the direct transfer of a European allowance unit from the Union Registry into an Australian Registry account. At this stage, a direct link would be in place and the Commonwealth Union Registry account, which is designed to support an indirect link to the Union Registry, would no longer be required.
The second condition is that the Commonwealth Union Registry account contains no European allowance units.
The third condition is that the Australian Registry contains no Australian-issued international units (AIIUs) that were issued for European allowance units.
The final condition is that the Regulator has completed an processes relating to the closure of accounts in the Union Registry set out in:
- the ANREU Act;
- the ANREU Regulations;
- the EC Registry Regulation;
- the laws of the European country in which the central administrator of the Union Registry or the national administrator of a European member state registry within the Union Registry is located; or
- any terms agreed between the Australian Government or the Regulator and the European Commission, the central administrator or the national administrator.