EXPLANATORY STATEMENT

Issued by the Authority of the Minister for the Environment

Carbon Credits (Carbon Farming Initiative) Act 2011

Carbon Credits (Carbon Farming Initiative) Amendment Rule 2015 (No. 1)

Purpose

The Carbon Credits (Carbon Farming Initiative) Act 2011 (CFI Act) enables the crediting of greenhouse gas abatement from emissions reduction activities across Australia. Greenhouse gas abatement is achieved either by reducing or avoiding emissions, or by removing carbon from the atmosphere and storing it.

The Carbon Credits (Carbon Farming Initiative) Amendment Rule 2015 (No. 1) (the Amendment Rule) details additional minor administrative procedures under the CFI Act, including the variation of declarations and project areas, revocation of declarations, restructuring offset projects and relinquishment requirements. It does this by amending the Carbon Credits (Carbon Farming Initiative) Rule 2015 (the Principal Rule).  

The content of the Amendment Rule is largely based on previous regulations under the CFI Act, the Carbon Credits (Carbon Farming Initiative) Regulations 2011 (the Regulations). The relevant sections of the Regulations are repealed upon commencement of the Amendment Rule.

Background to the Emissions Reduction Fund

In 2014, the Australian Government amended the CFI Act with the Carbon Farming Initiative Amendment Act 2014 (CFI Amendment Act). The CFI Amendment Act established the Emissions Reduction Fund by expanding the crediting of emissions reductions under the Carbon Farming Initiative to non‑land based sectors of the Australian economy.

The Emissions Reduction Fund is the centrepiece of the Australian Government’s efforts to reduce emissions. Its primary objective is to assist Australia to meet its emissions reduction target of five per cent below 2000 levels by 2020, consistent with its international obligations under the United Nations Framework Convention on Climate Change and the Kyoto Protocol.

The Emissions Reduction Fund will do this by purchasing approved and verified emissions reductions from registered projects. The CFI Act (as now amended by the CFI Amendment Act) empowers the Clean Energy Regulator to conduct processes to purchase emissions reductions, and enter into contracts for this purpose.

The CFI Amendment Act also streamlined the operation of the Carbon Farming Initiative to simplify making methodology determinations and encourage participation in the Emissions Reduction Fund.

Legislative rules and regulations supporting the CFI Act

The CFI Act is supported by subordinate legislation, including the Regulations and Principal Rule. The Regulations provided detailed explanations of the way in which the CFI Act is administered by the Clean Energy Regulator.

Under the CFI Act, the Minister is empowered to make legislative rules (section 308), consistent with the intention that new subordinate legislation under the CFI Act will be in this form. Over time, the Regulations are being transferred to sections of the Principal Rule to create a full new rule set, which will help alleviate the workload of the Federal Executive Council.

As part of this process, those sections of the Regulations that no longer reflect the CFI Act will be repealed and remade by the Minister as sections in the Principal Rule. The remade sections of the Principal Rule will reflect the changes from the Carbon Farming Initiative to the Emissions Reduction Fund. The date of effect of repealed regulations will coincide with the making of the replacement sections in the Principal Rule to ensure there is no overlap between the Regulations and the Principal Rule.

Several sections of the Regulations were repealed and remade as the Principal Rule in February 2015 to support the Clean Energy Regulator in conducting the first auction under the Emissions Reduction Fund, which was held over 15 – 16 April 2015.

The majority of the remaining sections of the Regulations are now being repealed and remade as part of the Amendment Rule, which is intended to commence as part of the Principal Rule in August 2015. These sections include amendments that will streamline administrative processes for applicants, including removing requirements to provide unnecessary information. They also include amendments that are necessary for the Clean Energy Regulator to administer projects properly, and update terminology where required. 

In addition, redundant sections of the Regulations will be repealed where their relevant head of power in the CFI Act has been removed as a result of changes arising from the CFI Amendment Act.

Detailed description of the Amendment Rule

Attachment A outlines and describes the sections in the Amendment Rule. A comparison table of the Amendment Rule and relevant repealed sections of the Regulations is included at Attachment B.

Public consultation

Consultation with businesses was undertaken during a two-week period from 5 June 2015 to 19 June 2015 on amendments to the Principal Rule, which included notification of changes to the Principal Regulations. Key stakeholders were notified of the consultation period and no submissions were received.

Regulatory impact

In accordance with the Australian Government Guide to Regulation, the Department of the Environment certified the Emissions Reduction Fund White Paper as a Regulation Impact Statement for initial decisions on the Emissions Reduction Fund. The decisions included the Emissions Reduction Fund crediting and purchasing arrangements, Carbon Farming Initiative arrangements incorporated into the Emissions Reduction Fund, and coverage of the Emissions Reduction Fund safeguard mechanism. The Regulation Impact Statement will be finalised after consultation with business on the remaining aspects of the safeguard policy.

Statement of compatibility with human rights

A statement of compatibility with human rights for the purposes of Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 is set out at Attachment C.

ATTACHMENT A

Details of the sections in the Carbon Credits (Carbon Farming Initiative) Amendment Rule 2015 (No. 1)

1.  Name

Section 1 provides that the name of the Amendment Rule is the Carbon Credits (Carbon Farming Initiative) Amendment Rule 2015 (No.1).

2.  Commencement

Section 2 provides that the Amendment Rule commences on 1 August 2015.

3.  Authority

Section 3 provides that the Amendment Rule is made under the Carbon Credits (Carbon Farming Initiative) Act 2011. In particular, section 308 of the Act includes the power for the Minister to make legislative rules.

4.  Schedules

Section 4 provides that the Amendment Rule amends the Carbon Credits (Carbon Farming Initiative) Rule 2015 (the Principal Rule) in the manner set out in the schedules.

Schedule 1 Amendments.

[1] Subsection 4(1)

This item adds definitions of Aboriginal land council, audit notice and authorised representative to the Principal Rule. These are based on the definitions in existing regulation 1.3.

Some definitions which are necessary for the application of methodology determinations under the Carbon Farming Initiative transitional provisions, and those which are necessary for the operation of enduring regulations 3.36 and 3.37 will be retained in the Carbon Credits (Carbon Farming Initiative) Regulations 2011. These include ‘conservation land,’  and ‘farm.’

[2] Subsection 4(1) (definition of CFI Mapping Guidelines)

This item moves the existing definition of ‘CFI Mapping Guidelines’ from subsection 13(3) of the Principal Rule to section 4 as the guidelines also need to be defined for section 23 of the Principal Rule.

[3] Subsection 4(1)

This item adds the definition of ‘integrated photovoltaic luminaire unit’.  This concept is used in the amendments to section 21 of the Principal Rule (refer sections 11 and 12 of the Amendment Rule) and is based on the Carbon Credits (Carbon Farming Initiative—Commercial and Public Lighting) Methodology Determination 2015.

[4] Subsection 4(1) (definition of Registry Account)

This item removes the definition of ‘registry account’ from the Principal Rule as this term is already defined in the CFI Act.

[5] Subsection 4(1)

This item inserts definitions of ‘relevant area’, ‘transferee offsets project’, and ‘transferor offsets project’ into section 4 of the Principal Rule. These concepts are defined in section 57 of the Act and are used in the new Division 4 of Part 3 of the Principal Rule (refer section 15 of the Amendment Rule).

[6] After section 4

This item inserts a new section 4A and 4B into the Principal Rule.

4A – Crown lands Minister

The Crown lands Minister has an eligible interest in Crown land (subsections 44(4), 44(7), 45(2) and 45(7)), and must provide consent to sequestration projects conducted on Crown land. The Crown lands Minister is also entitled to be notified of certain matters (sections 47 and 52).

This section for the most part replicates former regulation 1.4, which identified the Minister of State for each State and Territory who is taken to be the Crown lands Minister for the purposes of section 5 of the CFI Act. 

Except in the case of New South Wales and territories other than the Australian Capital Territory and the Northern Territory, the Crown lands Minister is identified by reference to the Minister of State who is currently administering the legislation listed in this regulation. For New South Wales, the Crown lands Minister is principally the Minister responsible for Primary Industries; in Jervis Bay and all external territories, it is the Commonwealth Minister responsible for administering the Jervis Bay Territory Acceptance Act 1915.

4B – Specified statutory authorities

The definition of 'statutory authority' in section 5 of the CFI Act includes an authority or body that is established by or under a law of the Commonwealth, a State or a Territory or one that is specified in the regulations or legislative rules. Former regulation 1.8A specified various indigenous organisations established under state legislation for the purposes of paragraph (d)(ii) of the definition.

This section has the effect that the process for applying for a sequestration offsets project to be declared to be an eligible offsets project will be the same for the specified authorities or bodies as it is for most other owners of freehold land.

Indigenous organisations established under state legislation and specified in this section will also not come within the definition of 'statutory authority' and consequently, freehold land held by such organisations is not Crown land merely because the organisation was established under state legislation.

[7] After section 5

This item inserts a new section 5A into the Principal Rule.

5A – Electronic notices transmitted to Regulator

Carbon Farming Initiative project proponents are required to have an account with the Australian National Registry of Emissions Units (the Registry) into which Australian carbon credit units can be issued. Instructions in relation to the transfer of Australian carbon credit units held in a Registry account and the voluntary cancellation of units must be given to the Clean Energy Regulator by electronic notice.

This section is made in relation to subsection 7(2) of the CFI Act which stated that the regulations or rules may make provision for or in relation to the security and authenticity of notices transmitted to the Clean Energy Regulator through electronic communication. It sets out the requirements that must be met before the Clean Energy Regulator will act on an electronic notice and replicates the content of former regulation 1.10. 

[8] After section 11

This item inserts a new section 11A and 11B into the Principal Rule.

11A – Processes for dealing with Commonwealth purchased units

This is a new rule made under section 20H of the CFI Act. It is necessary to provide the Clean Energy Regulator with further instructions for transferring Australian carbon credit units into a Registry account, prohibiting or restricting the transfer of units from an account, and cancelling units for which there are entries in an account.

Australian carbon credit units received by the Clean Energy Regulator in satisfaction of carbon abatement contract obligations under the Emissions Reduction Fund must be transferred to the Commonwealth Emissions Reduction Fund Delivery Account.

Australian carbon credit units which are delivered to the Commonwealth Emissions Reduction Fund Delivery Account must not have been transferred from an account which is used for the same purpose (i.e. another Commonwealth account used for the purpose of delivering or cancelling Australian carbon credit units).

Australian carbon credit units, once transferred into the Commonwealth Emissions Reduction Fund Delivery Account, will be cancelled as soon as practicable.

11B – Approving forms for the conduct of carbon abatement purchasing process

This section is based on former regulation 1.9 and allows the Clean Energy Regulator to approve forms for the purposes of the conduct of a ‘carbon abatement purchasing process’ under the Emissions Reduction Fund.

This section makes minor structural changes to reflect amendments to the CFI Act to implement the Emissions Reduction Fund, and to ensure consistency with the CFI Act and the Principal Rule. In particular, the power to approve forms for other provisions of the Principal Rule is now contained in the definition of ‘approved form’ at section 4 of the Principal Rule.

[9] Subsection 13(3)

This item repeals the definition of CFI Mapping Guidelines from this subsection as the term is now defined in section 4 of the Principal Rule.

[10] After section 20

This item inserts section 20A into the Principal Rule.

20A – Eligibility requirement—project area not to be used to offset or compensate for adverse impact on vegetation

This section is made in respect of paragraph 27(4)(l) of the CFI Act, which restricts the Clean Energy Regulator from declaring a project to be an eligible offsets project unless it meets the eligibility criteria specified in the Regulations or Rules.

It is based on former regulation 3.5 and specifies that an additional eligibility requirement for participation in the Emissions Reduction Fund is that the project area, or any part of it, is not used to meet an obligation under a law of the Commonwealth or a State or Territory to offset or compensate for the adverse impact of an action on vegetation. 

The clearance of vegetation results in the loss of values such as carbon and biodiversity.  These projects are ineligible because, under Commonwealth, State and Territory law, specified values (most often the biodiversity values) must be replaced.  If credits were issued for such projects and used to offset emissions from other sources, the loss of carbon from the vegetation clearing would not be offset. Projects that commence under the Carbon Farming Initiative or the Emissions Reduction Fund could choose to terminate their project by relinquishing credits and take part in a vegetation or biodiversity offsets scheme instead.

Examples of legislation that may require action to be undertaken to compensate for the impact of an action on vegetation include:

• the Environment Protection and Biodiversity Conservation Act 1999 (Cth)
•  the Environmental Planning and Assessment Act 1979 (NSW)
•  the Threatened Species Conservation Act 1995 (NSW)
•  the Flora and Fauna Guarantee Act 1988 (Vic)
•  the Environment Protection Act 1997 (ACT).

 [11] Paragraph 21(4)(b)

This item inserts the installation of an integrated photovoltaic luminaire unit as an exception to the listed excluded activities relating to the installation of small generation units under the Renewable Energy Target.  The installation of integrated photovoltaic luminaire units is not an excluded activity as this already happens outside of the Renewable Energy Target framework by organisations such as local councils and electricity distribution networks.  These assembled units are not connected to an electricity grid. The effect of this amendment is to allow such activities to continue and be supported by the CFI Act without needing to comply with the requirements of the regulations supporting the Renewable Energy Target (i.e. Clean Energy Council accredited installation and other particular requirements and standards). This is relevant to the Carbon Credits (Carbon Farming Initiative—Commercial and Public Lighting) Methodology Determination 2015 and will facilitate the uptake of this method.

[12]  At the end of subsection 21(4)

This item inserts a note referring to the definition of photovoltaic luminaire unit, as used in Paragraph 21(4)(b).

[13] After Division 2 of Part 3

This item inserts new Divisions 2A, 2B and 2C into the Principal Rule.

Division 2A—Variation of declaration of eligible offsets project

22 – Operation of this Division

This section is based on former regulation 3.6.  A project proponent can apply to vary the project area or the proponent identified in the declaration made under section 27 of the CFI Act. The provisions in this Division are made for subsections 29(1), 30(1) and 31(2) of the CFI Act.

This section also makes minor terminology changes to reflect amendments to the CFI Act to implement the Emissions Reduction Fund, and to ensure consistency with the CFI Act and the Principal Rule.

23 – Project area (or project areas)

Former regulation 3.9 allowed the Clean Energy Regulator to vary a declaration made under section 27 of the CFI Act so long as a variation application is made and the Clean Energy Regulator is satisfied of those matters outlined under what was regulation 3.16. Regulations 3.9, 3.14 and 3.16 have been repealed and remade as part of the Amendment Rule under this section to streamline the requirements for voluntary variation of a project area.

This section empowers the Clean Energy Regulator to vary a declaration in relation to an offsets project so far as the declaration identifies the project area or areas. The Clean Energy Regulator must not exercise its discretion to vary a declaration unless it is satisfied of all of the following:

• The whole project, as varied, would meet the eligibility criteria set out in section 27 of the CFI Act listed in paragraph (1)(a).
• All additionality requirements in subsection 27(4A) of the Act are met in relation to new project areas, including that the project has not begun to be implemented in relation to that new project area.
• The consent of all eligible interest holders has been obtained in respect of the varied project area (if the project is a sequestration project).
• The application would not result in the removal from the scheme of any area of land for which the sequestration of carbon has been credited. If an applicant wishes to remove such an area from the scheme the land would need to be moved to another sequestration project and that second project would need to apply for revocation of the entire project under section 29 of the Rules.
• The variation of a project area does not have the effect of that variation would be to move a project area from an eligible offsets project with a 100 year permanence obligation to an eligible offsets project with a 25 year permanence obligation.  This ensures that the 20 per cent discount applying to projects with a 25 year permanence period is applied correctly to the project area at all times in the life of the project.
• That an area of land is not becoming part of a project which applies a superseded methodology that only applies because of s 125, 126 or 127 of the Act or section 6 of the revocation instrument. Projects on such methodologies will need to move to an updated methodology under section 130 of the Act and then apply to expand their project area.

The application for the variation must be accompanied by the information and documentation specified in this Rule. This information and documentation is intended to assist the Clean Energy Regulator to decide whether the criteria for making a declaration set out in section 27 of the CFI Act have been met in relation to any project area to be added to the declaration. An application must be in the approved form, contain contact details and information to identify the relevant project and a declaration that all information in the form is accurate.

Redundant references and concepts have been removed, for example reference to ‘the additionality test’ have been updated to reflect the new additionality requirements under subsection 27(4A) of the CFI Act.

Sequestration offsets project proponents are also no longer required to hold the applicable carbon sequestration right in relation to the amended project area (former paragraph (2)(d)).

Former subsection 3.9 (2) of the Regulations has not been re-made in this Rule, as avenues are already open to the Clean Energy Regulator to take action against false and misleading statements. A statutory declaration is not considered necessary and this power is therefore duplicative.

Subsection 23(5) is based on former regulation 3.14 and requires that a copy of a variation be provided to the applicant and any relevant land registration officials. This is to enable a notification to be placed on the relevant land title that would alert anyone taking an interest in the project land that the land may be affected by obligations under the CFI Act.

Under subsection 23(5), the Clean Energy Regulator is required to take all reasonable steps to decide on an application within 90 days after the application was made, unless they require the applicant to give further information, in which case all reasonable steps must be taken to ensure that a decision is made within 90 days after the giving of that information. A decision made after this time will however not be invalid.

Subsection 23(7) provides that the variation to the declaration takes effect on the day on which the next reporting period for the project begins. This avoids the backdating of crediting which is no longer part of the legislative framework.

24 - Project proponent

Former regulation 3.9 allowed the Clean Energy Regulator to vary a declaration made under section 27 of the CFI Act so long as a variation application was made and the Clean Energy Regulator was satisfied of those matters outlined under what was regulation 3.17. Regulations 3.9 and 3.17 have been repealed and remade as part of the Amendment Rule under this section to streamline the requirements for voluntary variation in relation to a project proponent.

Subsections 24(1) and 24(2) empower the Clean Energy Regulator to vary a declaration in relation to an offsets project so far as the declaration identifies the project proponent for the project. The project proponent could change for a variety of reasons, including because the project area is sold, the owner of the project area has contracted another person to conduct an offsets project on their land, the individual project proponent has died, or the carbon sequestration right has been assigned to another person. 

In the situation where a project proponent has died, the Act provides for the legal personal representative of the deceased person to notify the Regulator under section 79 of the Act. It is also intended that the legal personal representative, such as the executor or trustee, would be able to apply under this section as the agent of the project proponent to make another person the project proponent for the offsets project. In particular, section 290 of the Act allows for an agent to make applications under the Act on behalf of another person and in this case it is intended that the legal personal representative would be the agent of the deceased project proponent.

Subsection 24(2) specifies that the application for the variation must be accompanied by the information and documentation specified. An application must be in the approved form, contain contact details and information to identify the relevant project and a declaration that all information in the form is accurate. This will assist the Clean Energy Regulator to verify that the applicant is the project proponent.

Subsections 24(1), 24(2), 24(3), 24(4), 24(5), 24(6) and 24(7) make minor structural and terminology changes to reflect amendments to the CFI Act to implement the Emissions Reduction Fund, and to ensure consistency with the CFI Act and the Principal Rule. For example the concept of a recognised offsets entity has not been re-made in this Rule in favour of the new fit and proper person test which applies under section 60 of the CFI Act.

As noted above, former subsection 3.9(2) of the Regulations has not been re-made in this Rule, as avenues are already open to the Clean Energy Regulator to take action against false and misleading statements. A statutory declaration is not considered necessary and this power is therefore duplicative.

The current ability in regulation 3.17(3) for the Regulator to seek security from an applicant in relation to the fulfilment of any relinquishment requirements has been retained in subsection 24(3), and is restricted to sequestration projects only as only sequestration projects are subject to the permanence requirements in the Act. The security requirement is important to address any potential for sequestration projects to be moved to legal entities which are unable to meet the CFI Act’s permanence obligations.

Under subsection 24(4), the Clean Energy Regulator is required to take all reasonable steps to decide on an application within 90 days after the application was made, unless they require the applicant to give further information, in which case all reasonable steps must be taken to ensure that a decision is made within 90 days after the giving of that information. A decision made after this time will however not be invalid.

Subsection 24(5) is based on former regulation 3.14 and requires that a copy of a variation be provided to the applicant and any relevant land registration officials. This is to enable a notification to be placed on the relevant land title that would alert anyone taking an interest in the project land that the land may be affected by obligations under the CFI Act.

Subsection 24(7) allows the variation to the project proponent to be backdated so that this can reflect what has been occurring in practice.

25 – Removal of condition

Former regulation 3.9 allowed the Clean Energy Regulator to vary a declaration made under section 27 of the CFI Act so long as a variation application was made and the Clean Energy Regulator was satisfied of those matters outlined under former regulation 3.18. Regulations 3.9 and 3.18 have been repealed and remade as part of the Amendment Rule under this section to streamline the requirements for removing a condition on a declaration of an eligible offsets project.

If, at the time of making an eligible offsets project declaration, the Clean Energy Regulator is not satisfied that all regulatory approvals have been obtained for the project, the Clean Energy Regulator must make the declaration subject to the condition that all regulatory approvals must be obtained before the end of the first reporting period for the project (section 28 of the CFI Act).

Section 5 of the CFI Act provides that the term 'regulatory approval', in relation to an offsets project, means an approval, licence or permit (however described) that:

a)  relates to, or to an element of, the project; and

b)  is required under a law of the Commonwealth, a State or Territory that relates to:

(i) land use or development; or

(ii) the environment; or

(iii) water.

A certificate of entitlement cannot be issued in relation to an eligible offsets project unless the Clean Energy Regulator is satisfied that any condition relating to regulatory approvals has been met (paragraph 15(2)(e) of the CFI Act). If the condition has been met, the project proponent may apply to the Clean Energy Regulator for the condition to be removed from the declaration.

This section is based on former regulation 3.18 which allows the Clean Energy Regulator to vary a declaration in relation to an offsets project by removing this condition, only if satisfied that the condition has been met. The application for the variation must be accompanied by the information specified in this section. An application must be in the approved form, contain contact details and information to identify the relevant project and a declaration that all information in the form is accurate. This information is designed to assist the Clean Energy Regulator to decide whether the condition has been met.

The section also applies the same process to a condition imposed under section 28A of the CFI Act to have the consent of relevant interest holders.

Under subsection 25(3), the Clean Energy Regulator is required to take all reasonable steps to decide on an application within 90 days after the application was made, unless they require the applicant to give further information, in which case all reasonable steps must be taken to ensure that a decision is made within 90 days after the giving of that information. A decision made after this time will however not be invalid. This subsection is based on former regulation 3.12.

Subsection 25(4) is based on former regulation 3.14 and requires that a copy of a variation be provided to the applicant and any relevant land registration officials. This is to enable a notification to be placed on the relevant land title that would alert anyone taking an interest in the project land that the land may be affected by obligations under the CFI Act.

Subsection 25(6) is based on former regulation 3.13 which stipulates that a variation to a declaration takes effect from the date it is made or, with the agreement of the applicant, an earlier specified date.

Former subsection 3.9 (2) of the Regulations has not been re-made in this Rule, as avenues are already open to the Clean Energy Regulator to take action against false and misleading statements. A statutory declaration is not considered necessary and this power is therefore duplicative.

This section makes minor structural changes to reflect amendments to the CFI Act to implement the Emissions Reduction Fund, and to ensure consistency with the CFI Act and the Principal Rule.

26 – Regulator may request further information

This section is based on former regulation 3.10 and empowers the Clean Energy Regulator to require that further information be provided by an applicant for a voluntary variation of a section 27 declaration and outlines the action which may be taken if this information is not provided. Any further information requested must be relevant to the application, and the power to request that further information must be exercised in a reasonable way (section 288 of the CFI Act).

27 – Applicant may withdraw application

This section is based on former regulation 3.11. It allows an application to be withdrawn at any time before the Clean Energy Regulator makes a decision and states that doing so does not prevent the applicant from making a fresh application.

This section makes minor structural changes to this section to reflect amendments to the CFI Act to implement the Emissions Reduction Fund, and to ensure consistency with the CFI Act and the Principal Rule.

Division 2B - Revocation of declaration of eligible offsets project

28 – Operation of this Division

The provisions in this Division are based on former Division 3.3 of the Regulations.  They deal with the revocation of a declaration of eligible offsets project, and are made for subsections 32(1), 33(1), 34(1), 35(1), 36(1), 37(1), 38(1) and 139(1) of the CFI Act. If a declaration of eligible offsets project is revoked, the project ceases to be an eligible offsets project under the CFI Act. This section makes minor technical changes to reflect amendments to the CFI Act to implement the Emissions Reduction Fund, to ensure consistency with the CFI Act and the Principal Rule, and to make the operation of the Division clearer.

29 – Voluntary revocation of declaration of eligible offsets project –units issued

This section is based on former regulation 3.23 which outlined the prerequisites for revoking a declaration of eligible offsets project under section 27 of the Act where one or more Australian carbon credit units have been issued.

If Australian carbon credit units have been issued, and the project is a sequestration offsets project, the declaration may only be revoked if an appropriate number of units are handed back before the application is made.

This section makes minor terminology changes to reflect amendments to the CFI Act to implement the Emissions Reduction Fund, and to ensure consistency with the CFI Act and the Principal Rule. In particular, the differentiation between Kyoto and non-Kyoto offsets projects is removed under the amended CFI Act. This is updated  in this section to require that any Australian carbon credit units can be used for relinquishment but that the number of non-Kyoto units used cannot exceed the number of non-Kyoto units issued to the project.

This section, and section 30 below, both incorporate former regulation 3.20 which stated that the Clean Energy Regulator must notify the project proponent and, if the project is a sequestration offsets project, the relevant land registration official, of the revocation of the declaration by providing a copy of the revocation. This is to enable the removal of any notification placed on the relevant land title.

Sections 29 and 30 also incorporate the requirements for an application for voluntary revocation of a declaration of eligible offsets project under section 27 of the CFI Act which appeared under former regulations 3.21 and 3.22. An application for a voluntary revocation must be made in an approved form. The project proponent, a nominee of multiple project proponents or an agent of a project proponent or a nominee may make the application. The application must contain contact details and information to identify the relevant project, and a declaration that all information in the form is accurate.

These requirements are retained, but includes minor structural changes to reflect amendments to the CFI Act to implement the Emissions Reduction Fund, and to ensure consistency with the CFI Act and the Principal Rule. In particular, former subsection 3.9 (2) of the Regulations has not been re-made in this Rule, as avenues are already open to the Clean Energy Regulator to take action against false and misleading statements. A statutory declaration is not considered necessary and this power is therefore duplicative.

Where units have been issued, the application must include information about the number and type of Australian carbon credit units issued in respect of the project (if any) and confirmation that the appropriate number and type of units have been relinquished (if necessary).

Under subsection 29(3), the Clean Energy Regulator is required to take all reasonable steps to decide on an application within 90 days after the application was made, unless they require the applicant to give further information, in which case all reasonable steps must be taken to ensure that a decision is made within 90 days after the giving of that information. A decision made after this time will however not be invalid.

30 – Voluntary revocation of declaration of eligible offsets project – no units issued

This section is based on former regulation 3.24 which outlined the prerequisites for revoking a declaration of eligible offsets project under section 27 of the Act where no Australian carbon credit units have been issued. If no Australian carbon credit units have been issued in respect of the project, or the project is an emissions avoidance offsets project, the declaration may be revoked.

Where no units have been issued, the application must include a statement that no Australian carbon credit units have been issued for the project.

Under subsection 30(3), the Clean Energy Regulator is required to take all reasonable steps to decide on an application within 90 days after the application was made, unless they require the applicant to give further information, in which case all reasonable steps must be taken to ensure that a decision is made within 90 days after the giving of that information. A decision made after this time will however not be invalid.

31 – Regulator may request further information

This section is based on former regulation 3.24A and empowers the Clean Energy Regulator to request further information in relation to the application, if necessary. The Clean Energy Regulator may refuse to consider an application, or to take any further action on an application, if that further information is not provided. Any further information requested must be relevant to the application, and the power to request that further information must be exercised in a reasonable way, consistent with section 288 of the CFI Act.

32 – Unilateral revocation of declaration of eligible offsets project

This section is based on former regulations 3.26 and 3.26A which empowers the Clean Energy Regulator to unilaterally revoke a declaration in relation to an offsets project if satisfied that the project does not meet the eligibility requirements set out in this section. The effect of this section is that the Clean Energy Regulator has the discretion to unilaterally revoke a declaration if:

• Regulatory approvals for the project have not been obtained;
• Consent from eligible interest holders has not been obtained;
• The project does not meet a requirement in paragraphs 27(4)(a) to (c) and (l) of the CFI Act;
• The project proponent for the project ceases to pass the fit and proper person test;
• The person responsible for carrying out the project ceases to be the project proponent for the project;
• False or misleading information was provided to the Clean Energy Regulator in relation to the project;
• Multiple project proponents fail to nominate a nominee in relation to the project.

This section makes minor structural and terminology changes to reflect amendments to the CFI Act to implement the Emissions Reduction Fund, and to ensure consistency with the CFI Act and the Principal Rule. In particular, the ability to revoke a declaration if the project starts to use harvested native forest materials is removed as the relevant requirement in the CFI Act has been repealed. The concept of a recognised offsets entity has also been removed in favour of the new fit and proper person test which applies under section 60 of the CFI Act.

33 – Consultation

This section replicates former regulation 3.25 which requires the Clean Energy Regulator to consult the project proponent prior to unilaterally revoking a declaration. The project proponent will have 28 days after the date of the notice to make submissions about the proposed revocation.

Division 2C – Eligible interest in an area of land

34 – Land transferable to an Aboriginal land council

This section is made in relation to subsection 44(5A) and 45(5A) of the CFI Act, and is based on former regulation 3.30. This includes minor changes to reflect amendments to the CFI Act to implement the Emissions Reduction Fund, and to ensure consistency with the CFI Act and the Principal Rule.

The consent of all persons with an 'eligible interest' in a project area must be obtained before the end of the first reporting period for certain offsets projects, consistent with section 28A of the CFI Act. Section 5 of the CFI Act provides that the term 'eligible interest', in relation to an area of land, has the meaning given by section 43, 44, 45 or 45A.

Persons specified in, or ascertained in accordance with, the Amendment Rule also hold an eligible interest in the area of land for the purposes of the CFI Act. This section of the Amendment Rule specifies these people. 

The effect of this section is that an Aboriginal land council will hold an eligible interest in relation to any land it has successfully claimed to be land rights land under a law of the Commonwealth, a State or a Territory, but which has not yet been registered on a Torrens system of land registration. This is to prevent disadvantage to Aboriginal people merely because final registration of land under the Torrens system, which is an administrative formality, can take a very long time and, in some cases, years, in the case of land rights land.

[14] At the end of section 50

This amendment updates existing section 50 of the Principal Rule, for subsection 53A(1) of the CFI Act. Paragraph 27(3)(b) of the CFI Act states that a project declaration must include the project area(s) if the project is an area based project: a sequestration project or a type of area-based emissions avoidance offsets project as identified in regulations or legislative rules.

This amendment adds to the list of area-based emissions avoidance projects at section 50. Specifically, it adds offsets projects for which the Carbon Credits (Carbon Farming Initiative) Methodology (Reducing Greenhouse Gas Emissions from Fertiliser in Irrigated Cotton) Determination 2015 is, or is to be, the applicable methodology determination. This addition ensures that applicants are clear that projects under this method are considered area‑based offsets projects (including as a result of sections 125, 126 and 127 of the CFI Act).

The existing paragraph 50(b) is being removed as listing each determination specifically in the rule is considered to provide greater clarity as to whether or not a project is an area-based offset project than the current general rule in paragraph 50(b).

[15] At the end of Part 3

This item adds a new Division 4 to Part 3 of the Principal Rule.

Division 4 – Restructure of eligible offsets projects

51 – Operation of this Division

This section is made in relation to subsection 57(2) of the Act, and is based on former regulation 3.38. This includes minor changes to the phrasing of this section to reflect amendments to the CFI Act to implement the Emissions Reduction Fund, and to ensure consistency with the CFI Act and the Principal Rule.

The CFI Act provides for a project area to be transferred between eligible offsets projects, for example if a landholder purchases part of their neighbour's reforestation project. It also provides for a project area to be separated from the original project, for example if part of a reforestation project that has been declared to be an eligible offsets project is sold to a new project proponent.

The provisions in this Division provide for the Clean Energy Regulator to adjust the crediting and reporting requirements for sequestration projects where part of the project area is transferred to another project or becomes a new stand-alone project. They also ensure that permanence requirements run with the land.

This section provides that the Division is made for subsection 57(2) of the CFI Act.

Several terms used in this Division are defined in subsection 57(1) of the CFI Act and also in section 4 of the Principal Rule:

• The relevant area is an area of land that is moved from one project to a second project through a variation to a section 27 declaration.
• The transferor offsets project is the project of which the relevant area was initially part.
• The transferee offsets project is the project of which the relevant area is a part following the restructure.

52 – Adjusting the net total number of Australian carbon credit units

This section is made in relation to subsection 57(2) of the CFI Act.  It is based on former regulation 3.39 and makes provision for or in relation to the adjustment of the net total number of Australian carbon credit units for a transferee or a transferor offsets project. This includes minor structural changes to reflect amendments to the CFI Act to implement the Emissions Reduction Fund, and to ensure consistency with the CFI Act and the Principal Rule.

In very general terms, Australian carbon credit units do not need to be relinquished if an area of land constituting part of an eligible sequestration offsets project (the transferor offset project) is transferred to another eligible offsets project (the transferee offset project) and remains subject to permanence requirements. Instead, the transferee project proponent will become responsible for the permanence of Australian carbon credit units issued in relation to the transferred area. This allows for the smooth transition of an area or areas of land from one sequestration offsets project to another.

This section of the Amendment Rule allows the Clean Energy Regulator to adjust the 'net total number' of Australian carbon credit units issued in relation to a transferee or transferor offsets project. The net total number of Australian carbon credit units issued in relation to an offsets project is required for working out relinquishment requirements in relation to a sequestration offsets project.

Under subsection 52(4), the Clean Energy Regulator must also take into consideration any Australian carbon credit units that could be issued for the relevant area at the time of the transfer, but which have not yet been issued. The note in subsection 52(4) refers to subsection 4(1) of the Principal Rule. This includes an estimate of credits for any abatement that has been included in an offsets report, but for which no certificate of entitlement has been issued. It also includes any abatement that has happened on the relevant area between the last report for the transferor offsets project and the date the restructure of the project areas occurred.

The determination will be remade once an application for a certificate of entitlement is submitted to the Clean Energy Regulator for the transferor offsets project for the reporting period covering the restructure, and any previous reporting periods for which no such application had been submitted. The effect of the amendment is that the Clean Energy Regulator will incorporate into the determination the actual number of Australian carbon credit units issued in relation to the relevant area, rather than an estimate.

53 – Adjusting crediting period – transferee offsets project

This section is made for subsection 57(2) of the CFI Act. Section 57 relates to situations arising from the transfer of land between projects.  Subsection 57(2) states that regulations or legislative rules may make provision for the adjustment of unit entitlement for projects which have either received (the transferee offsets project) or transferred (the transferor offsets project) an area of land that constitutes the project area.

This section of the Amendment Rule replaces former regulation 3.40, and provides for the duration of the crediting period for the transferee offsets project to be amended.

The crediting period for a transferee offsets project ends on the earlier of either the end of its crediting period or the transferor’s crediting period. For example, if the transferee’s crediting period ended in 2030, but the transferor’s crediting period ended in 2028, the transferee’s crediting period would now end at 2028.  If the transferee’s crediting period was already 2028, and the transferor’s was 2030, the transferee’s crediting period would remain 2028. 

The end date of the crediting period for the transferee offsets project may be aligned with the end date of the crediting period for the transferor offsets project. Whether it is amended will depend on whether the project, as it stands immediately following the restructure, would qualify for a subsequent crediting period.

54 – Adjusting reporting period – transferee offsets project

This section is made in relation to subsection 57(2) of the CFI Act. It is based on former regulation 3.41 and specifies how the reporting period for a transferee offsets project is adjusted. Although no substantial amendments have been made to the content of this section, this section includes minor changes to reflect amendments to the CFI Act to implement the Emissions Reduction Fund, namely the allowance of a delay to the start of a crediting (and reporting) period.

The effect of this section of the Amendment Rule is that the reporting period of the transferee offsets project will end no more than five years after the end of the previous reporting period for either the transferee offsets project or the transferor offsets project, whichever is earlier.

The transferor offsets project and the transferee offsets project will both report on the relevant area for the period of time within the reporting period the relevant area was a part of the project.

It is expected that, generally, the project proponent of a transferor offsets project will end a reporting period immediately before the restructure. This will simplify arrangements for the transfer of project areas, including the transfer of records. It will be important to ensure that relevant records are transferred to enable the project proponent of the transferee offsets project to meet their record-keeping, reporting or auditing obligations under the CFI Act and the Principal Rule.

 [16] After Division 3 of Part 6

This item inserts new Division 3A into the Principal Rule.

Division 3A – Declaration that offsets reporting requirements does not apply

80A – Regulator may declare offsets reporting requirements does not apply to project

This is a new section made in relation to subsection 77(1) of the CFI Act. It allows the Clean Energy Regulator to declare that the project proponent for an eligible sequestration offsets project is not required to provide an offsets report for subsequent reporting periods from the date of the declaration and under certain conditions. 

Paragraph 76(2)(f) of the CFI Act provides an equivalent provision for emissions avoidance offsets projects, specifying that, for emissions avoidance offsets projects, the period for which an offsets report is provided must be within the crediting period for the project, or the extended accounting period (if any) for the project.  

Consistent with paragraph 77(2)(c) of the Act, section 80A provides that a declaration can be made by the Clean Energy Regulator only if they are satisfied the project has reached its maximum carbon sequestration capacity. An application must be in the approved form, contain contact details and information to identify the relevant project and a declaration that all information in the form is accurate. This information and documentation is intended to assist the Clean Energy Regulator to decide whether it is appropriate to make a declaration that subsection 76(2) does not apply to an eligible offsets project. In particular, the application must provide details of how any risk of reversal of sequestration is to be managed for the remainder of the permanence period (see paragraph 80A(2)(d)). If the information leaves the Regulator with concerns about maintaining and monitoring carbon stocks, the Regulator may exercise its discretion not to make a declaration under subsection 80A(1).

80B – Regulator may request further information

This is a new section made in relation to subsection 77(1) of the CFI Act.  It allows the Clean Energy Regulator to require further information in relation to an application made under subsection 80A(2) of the Amendment Rule.  If the requested information is not provided, the Clean Energy Regulator may refuse to consider the application or take any action, or further action, to progress the application.

[17] After Part 6

This items inserts new and new Parts 7, 9 10, 11 and 15 into the Principal Rule.

Part 7 – Requirements to relinquish Australian carbon credit units

88 – Requirement to relinquish – significant reversals relating to an event other than natural disturbance or conduct

This section is made in relation to paragraph 90(1)(d) of the Act, and provides for the meaning of  a ‘significant reversal’ of the removal of carbon dioxide from the atmosphere as a result of an event other than natural disturbance or conduct.  This definition is for the purposes of determining whether Australian carbon credit units need to be relinquished as a result of a significant reversal of sequestration, where the significant reversal is due to an event other than natural disturbance or conduct.

It is based on former subregulation 7.1A(1), and makes no substantial change to the content of the provision.  However, this section makes minor structural changes to reflect amendments to the CFI Act to implement the Emissions Reduction Fund, and to ensure consistency with the CFI Act and the Principal Rule.

89 - Requirement to relinquish – significant reversals relating to natural disturbances and conduct

This section is made in relation to paragraph 91(1)(d) of the Act, and provides for the meaning of  a ‘significant reversal’ of the removal of carbon dioxide from the atmosphere as a result of natural disturbance or conduct engaged in by a person other than the project proponent for the project.

This definition is for the purposes of determining whether Australian carbon credit units need to be relinquished as a result of either a significant reversal of sequestration where the significant reversal is due to natural disturbance and the project proponent has not taken reasonable steps to mitigate the effect of that event, or as a result of a significant reversal of sequestration where the significant reversal is due to conduct and the project proponent has not taken reasonable steps to mitigate the effect of that event.

It is based on former subregulation 7.1A(2).   It makes no substantial change to the content of the provision relating to conduct.  However, it amends it to ensure consistency with the significant reversal reporting threshold for natural disturbance events in section 81 of the Principal Rule.  Accordingly, the 50 hectare threshold is removed for reversals the result of natural disturbances.

Part 9 – Methodology determinations

90 – Request to approve application of methodology determination to a project with effect from the start of a reporting period

This section is made in relation to paragraph 128(2)(c) of the CFI Act. It is based on former regulation 9.3 and makes no substantial change to the content of the provision. However, this section makes minor structural changes to reflect amendments to the CFI Act to implement the Emissions Reduction Fund, and to ensure consistency with the CFI Act and the Principal Rule.

The section provides for requests to approve the application of a methodology determination to a project. Only one methodology determination can be used to estimate abatement over a reporting period for an eligible offsets project. This is known as the 'applicable methodology determination'. That determination will apply until the end of the project's crediting period unless the Clean Energy Regulator approves otherwise. This is the case even if the determination is varied, expires or is revoked (section 125, 126 and 127 of the CFI Act).

A project proponent can apply for the Clean Energy Regulator to approve the application of a specified methodology determination to the project with effect from the start of a reporting period. This approval might be sought, for instance, if a different or varied methodology determination would result in more accurate and higher abatement estimates.

This section specifies the information and documents that must accompany a request to approve the application of a methodology determination to a project with effect from the start of a reporting period. A request must be in the approved form which is available from the Clean Energy Regulator's website. The request must identify and describe the project, identify the methodology determination that the applicant seeks to apply to the project and,  the date the methodology commenced or was varied. It must also include confirmation that the project meets the requirements of that methodology determination.

The Clean Energy Regulator has power to require further information, and may refuse to consider a request if this information is not provided (section 129 of the CFI Act).

Part 10 – Multiple project proponents

91 – Designation of nominee account

This section is made in relation to paragraph 140(3)(c) of the CFI Act. It is based on former regulation 10.1 and makes no substantial change to the content of the regulation.  However, minor changes to the phrasing are made to reflect amendments to the CFI Act to implement the Emissions Reduction Fund, and to ensure consistency with the CFI Act and the Principal Rule.

This section of the Amendment Rule specifies information that must be provided to the Clean Energy Regulator in order to designate a nominee account. Information is required about the nominee and the project. Multiple project proponents for an eligible offsets project may request the Clean Energy Regulator to open a Registry account under subsection 10(1) of the Australian National Registry of Emissions Units Act 2011 in the name of their nominee, and to designate that account as the nominee account for the eligible offsets project. The Clean Energy Regulator cannot issue units to multiple project proponents for an eligible offsets project unless there is a nominee account (section 140 of the CFI Act).

The purpose of this section of the Amendment Rule is to ensure that the Clean Energy Regulator has sufficient information to properly designate the Registry account as the nominee account for the eligible offsets project.

Part 11 – Australian carbon credit units

92 – Transmission of Australian carbon credit units by operation of law

This section is made in relation to paragraph 153(2)(b) and 153(3) of the CFI Act. It is based on former regulation 11.1 and makes no changes to that regulation. 

The transmission of Australian carbon credit units by operation of law means that there is a legal requirement for the transfer. This may occur, for example, for the purposes of the Bankruptcy Act 1966, Chapter 5 of the Corporations Act 2001 (which relates to external administration of corporations), the Proceeds of Crime Act 2002 or the law relating to wills, intestacy and deceased estates. A transmission of an Australian carbon credit unit by operation of law is of no effect, however, until the Clean Energy Regulator transfers the unit in accordance with section 153 of the CFI Act. Within 90 days of the transmission, the transferee must give the Clean Energy Regulator a written declaration of transmission, together with evidence of the transmission. This section specifies how the declaration of transmission must be made and the evidence of transmission that must accompany it.

The declaration must set out the serial numbers of the Australian carbon credit units transmitted, the name, contact and Registry details of the transferor and transferee and a brief description of the circumstances that resulted in the transmission (for example, the bankruptcy or death of the transferor). If the transferee does not already have a Registry account, the declaration must be accompanied by a request to open an account.

The declaration must also be accompanied by a certified copy of a document showing transmission of the title of the Australian carbon credit units to the transferee. For example, if the transmission occurs on the making of a court order, a certified copy of the court order must be provided; if the transmission occurs by reason of the death of the transferor, a certified copy of the probate of the will or letters of administration of the estate should be provided.

93 – Transmission of Australian carbon credit units to a foreign account

This section is made in relation to section 155 of the CFI Act. It specifies that Australian carbon credit units must not be transferred from a Registry account to a foreign account.  This reflects current policy not to export credits into foreign registries for at least three years, as exported credits would not count towards Australia’s emissions reduction target.   

Part 15 – Relinquishment of Australian carbon credit units

94 – Market value of Kyoto Australian carbon credit units

This section is made in relation to paragraph 179(7) of the CFI Act, and is based on former regulation 15.4. This includes changes to reflect amendments to the CFI Act to implement the Emissions Reduction Fund, including to remove redundant references and to update the manner in which the market value of Kyoto Australian carbon credit units is determined. The provisions in former regulation 15.4 relied on former carbon pricing arrangements which have since been repealed.

Section 179 of the CFI Act provides for the imposition of a penalty for non-compliance with a relinquishment requirement. The penalty is worked out by multiplying the net number of units to be relinquished by the 'prescribed amount'. The 'prescribed amount' is the greater of $20 or 200 per cent of the market value of the Australian carbon credit unit. Subsection 179(7) provides that legislative rule may provide that the 'market value' of an Australian carbon credit unit is to be ascertained in accordance with the legislative rules.

This section of the Amendment Rule specifies that the market value of an Australian carbon credit unit is the highest weighted average price published by the Clean Energy Regulator under paragraph 163(b) of the CFI Act. 

[18] After Part 17

This item inserts new Parts 18 and 19 into the Principal Rule.

Part 18 – Monitoring powers

102 – Identity cards

This section is made in relation to paragraph 197(2)(a) of the CFI Act. It is based on former regulation 18.1 and makes no changes to the content of that regulation. 

Inspectors may enter premises in specified circumstances for the purpose of determining whether the CFI Act or the associated provisions (including the Rules) have been complied with, or substantiating information provided under the legislation. The Clean Energy Regulator is required to issue identity cards to inspectors, and the cards must be in the prescribed form (subsection 197(2) of the CFI Act).

This section of the Amendment Rule prescribes the form an identity card issued to an inspector appointed under section 196 of the CFI Act must take. The identity card must identify the person as an inspector for the purposes of Part 18 of the CFI Act. The card must contain an expiry date and a statement that the person is authorised to exercise powers under Part 18 of the CFI Act.

Part 19 - Audits

103 – Compliance audits – requirements for reimbursement

This section is made in relation to paragraphs 214(9)(c) and (d) of the CFI Act, and is based on former regulation 19.1 and makes no change to the content of that regulation. 

If the Clean Energy Regulator has reasonable grounds to suspect that a person has contravened, is contravening, or is proposing to contravene, the CFI Act or the associated provisions (including the Principal Rule), they may require the person to arrange for a registered greenhouse and energy auditor to audit the person's compliance with the relevant legislation (section 214 of the CFI Act). The Clean Energy Regulator may reimburse a person for reasonable costs incurred in complying with this requirement if the audit report does not indicate that there is evidence of non-compliance with the legislation, and the Clean Energy Regulator is satisfied that the person would suffer financial hardship if the person was not reimbursed (subsection 214(8)).

This section of the Amendment Rule specifies the information and documentation that must accompany a request for the reimbursement of certain compliance audit costs.

A request for reimbursement of audit costs must be in writing and contain the information and documentation specified in this regulation, including evidence of the costs incurred in complying with the audit requirement, a statement of the financial hardship caused by compliance with the requirement, a copy of the audit report and a signed declaration that the information and documentation supplied meets the requirements of this regulation and is accurate. The provision of false or misleading information in this respect is an offence.

ATTACHMENT B

Comparison of the Principal Rule (as amended by the Amendment Rule)

to regulations being repealed

ATTACHMENT C

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Carbon Credits (Carbon Farming Initiative) Amendment Rule 2015 (No. 1)

The Carbon Credits (Carbon Farming Initiative) Amendment Rule 2015 (the Amendment Rule) 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 Legislative Instrument

The Carbon Credits (Carbon Farming Initiative) Act 2011 (CFI Act) enables the crediting of greenhouse gas abatement from emissions reduction activities across Australia. Greenhouse gas abatement is achieved either by reducing or avoiding emissions, or by removing carbon from the atmosphere and storing it.

The Amendment Rule details additional minor administrative procedures under the CFI Act, including the variation of declarations and project areas, revocation of declarations, restructuring offset projects, and relinquishment requirements. It does this by amending the Carbon Credits (Carbon Farming Initiative) Rule 2015 (the Principal Rule).  

The content of the Amendment Rule is largely based on regulations under the CFI Act. Those relevant regulations are repealed upon commencement of the Amendment Rule.

Human rights implications

The Amendment Rule engages Article 17(1) of the International Covenant on Civil and Political Rights (ICCPR).

Article 17(1) of the ICCPR provides for the right of every individual to be protected against arbitrary or unlawful interference with the individual’s privacy. The term ‘privacy’ has not been defined by international human rights law but it is generally accepted that it encompasses ‘information privacy’— the right to privacy of information about a particular individual.

An interference with an individual’s privacy will not be considered ‘unlawful’ if it is authorised by a law that complies with the provisions, aims and objective of the ICCPR and specifies in detail the precise circumstances in which such interferences may be permitted. An interference with an individual’s privacy will not be considered ‘arbitrary’ if it is reasonable in the particular circumstances and the law is in accordance with the provisions, aims and objectives of the ICCPR.

The Amendment Rule engages the right to privacy because:

• New Part 3 in the Amendment Rule requires a person to provide a range of specified information when applying for a voluntary variation of declaration of an eligible offsets project, or for voluntary revocation of a declaration of an eligible offsets project. This is primarily to establish the identity of the project proponent or nominee and the details of the variation or revocation.   
• Section 80A requires information in an application from an eligible sequestration offsets project to be excluded from provision of offsets reports for subsequent reporting periods. This focuses on project rather than personal information.
• New Part 9 in the Amendment Rule requires a person to provide a range of specified information when requesting the application of a methodology determination to a project with effect from the start of a reporting period. This focuses on project rather than personal information.  
• New Part 10 in the Amendment Rule requires a person to provide a range of specified information when applying for an account to be designated as the nominee account for an eligible offsets project. This requires only the minimum amount of information required to establish the nominee’s identity and the project for which they are the nominee.

All of the above information requirements are largely based on the former regulations under the CFI Act.

The Amendment Rule is consistent with previous proof of identity requirements under the CFI Act and has been designed to limit identity information to that which is sufficient to enable the Clean Energy Regulator to carry out its statutory functions. In particular, where the Clean Energy Regulator already has access to this information or has registered the proponent under other legislation it administers, the detailed personal information is not collected again.

All these requirements are reasonable and the Amendment Rule is therefore not ‘arbitrary’ within the meaning of Article 17(1) of the ICCPR.

Further, the Amendment Rule does not authorise an unlawful interference with an individual’s privacy because the Amendment Rule adequately specifies the circumstances in which information may be collected.

Moreover, the Clean Energy Regulator is required to handle all personal information in accordance with the Privacy Act 1988 and is bound by the secrecy provisions in the Clean Energy Regulator Act 2011. In particular, Part 3 of the Clean Energy Regulator Act 2011 includes a number of significant restrictions on the use or disclosure of information collected by the Clean Energy Regulator.

The Amendment Rule is therefore compatible with Article 17(1) of the ICCPR because it does not unlawfully or arbitrarily interfere with an individual’s privacy.

A detailed statement of compatibility of the provisions of the Emissions Reduction Fund is provided in the Explanatory Memorandum for the Carbon Farming Initiative Amendment Bill 2014: http://www.environment.gov.au/system/files/pages/7aef9f12-8ba1-4d9a-bf6a-1bc89a0bd6f5/files/cfi-amendment-bill-explanatory-memorandum.pdf .

Conclusion

The Amendment Rule is compatible with human rights because it does not limit any human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.