Safeguard Mechanism (Crediting) Amendment Act 2023 (14 of 2023)

Schedule 1   Safeguard mechanism

Part 1   Amendment of the National Greenhouse and Energy Reporting Act 2007

National Greenhouse and Energy Reporting Act 2007

34   After Division 4 of Part 3H

Insert:

Division 4A - Safeguard mechanism credit units

Subdivision A - Issuing safeguard mechanism credit units

22XNA Issuing safeguard mechanism credit units

(1) The Regulator may, on behalf of the Commonwealth, issue units (to be known as safeguard mechanism credit units ) to one or more persons in relation to a facility.

Note: Safeguard mechanism credit units may be issued under this section to the Commonwealth in relation to a facility.

(2) The safeguard rules may make provision for, or in relation to, the issuing of safeguard mechanism credit units by the Regulator.

(3) Without limiting subsection (2), the safeguard rules may make provision in relation to one or more of the following:

(a) applying for safeguard mechanism credit units to be issued;

(b) the number of such units that may be issued to a person in relation to a facility;

(c) how the Regulator is to determine the number of such units to be issued to a person in relation to a facility;

(d) any conditions that may be imposed by the Regulator on a person issued with such units;

(e) the review or reconsideration of any decision under the safeguard rules relating to the issuing of such units.

(4) Without limiting paragraph (3)(c), the safeguard rules may provide for the following in relation to a determination by the Regulator mentioned in that paragraph:

(a) the methodology to be used by the Regulator in making a determination;

(b) how a person may apply for a determination;

(c) requiring an application for a determination to be accompanied by an audit report that is:

(i) prescribed by the safeguard rules; and

(ii) prepared by a registered greenhouse and energy auditor who has been appointed as an audit team leader for that purpose.

22XNB Entry in Registry account must be made if safeguard mechanism credit units issued

Units issued to the Commonwealth

(1) If the Regulator decides to issue a safeguard mechanism credit unit to the Commonwealth in relation to a facility, the Regulator must make an entry for the unit in a Commonwealth Registry account.

Units issued to persons other than the Commonwealth

(2) If the Regulator decides to issue a safeguard mechanism credit unit to a person (other than the Commonwealth) in relation to a facility, the Regulator must make an entry for the unit in a Registry account kept by the person.

(3) The Regulator must not issue a safeguard mechanism credit unit to a person (other than the Commonwealth) unless:

(a) the person is a registered person; and

(b) the person has a Registry account.

22XNC Safeguard mechanism credit units issued must be identified with a financial year

Scope

(1) This section applies if the Regulator decides to issue a safeguard mechanism credit unit to a person in relation to a facility.

Requirement

(2) The Regulator must, in accordance with safeguard rules made for the purposes of this subsection, identify the unit with a financial year.

22XND Safeguard mechanism credit units held in Commonwealth Registry accounts

(1) Without limiting subsection 22XNA(2), the safeguard rules may provide for:

(a) the transfer, in specified circumstances, of safeguard mechanism credit units held in a Commonwealth Registry account because of subsection 22XNB(1) to another person's Registry account; or

(b) the cancellation, in specified circumstances, of such units.

(2) If safeguard mechanism credit units held in a Commonwealth Registry account are cancelled in accordance with safeguard rules made for the purposes of paragraph (1)(b), the Regulator must remove the entries for those units from that account.

Subdivision B - Requirement to relinquish safeguard mechanism credit units etc.

22XNE Regulator may require relinquishment of safeguard mechanism credit units etc. issued on false or misleading information

Scope

(1) This section applies if:

(a) a number of safeguard mechanism credit units have been issued to a person (other than the Commonwealth) in relation to a facility; and

(b) the units were issued to the person on the basis of information given to the Regulator (whether or not by the person); and

(c) the information was false or misleading in a material particular; and

(d) the issue of any or all of the units was directly or indirectly attributable to the false or misleading information.

Note: An example of false or misleading information would be a report given under this Act that contained inaccurate information about greenhouse gas emissions.

Relinquishment

(2) The Regulator may, by written notice given to the person, require the person to relinquish a specified number of relinquishable units.

(3) The specified number must not exceed the number of safeguard mechanism credit units the issue of which was directly or indirectly attributable to the false or misleading information.

(4) The person must comply with the requirement within 90 days after the notice was given.

Note: An administrative penalty is payable under section 22XNI for non-compliance with a relinquishment requirement.

22XNF Court may order relinquishment of safeguard mechanism credit units etc. issued as a result of fraudulent conduct

Scope

(1) This section applies if:

(a) one or more safeguard mechanism credit units were issued to a person on a particular occasion; and

(b) the person has been convicted of an offence against:

(i) section 134.1 of the Criminal Code; or

(ii) section 134.2 of the Criminal Code; or

(iii) section 135.1 of the Criminal Code; or

(iv) section 135.2 of the Criminal Code; or

(v) section 135.4 of the Criminal Code; or

(vi) section 136.1 of the Criminal Code; or

(vii) section 137.1 of the Criminal Code; or

(viii) section 137.2 of the Criminal Code; and

(c) an appropriate court is satisfied that the issue of any or all of the units was directly or indirectly attributable to the commission of the offence.

Note: For appropriate court , see subsection (7).

Relinquishment

(2) The court may, on application made by the Director of Public Prosecutions or the Regulator, order the person:

(a) to relinquish a specified number of relinquishable units not exceeding the number of safeguard mechanism credit units issued as mentioned in paragraph (1)(a); and

(b) to do so by a specified time.

Compliance

(3) The person must comply with an order under subsection (2).

Note: An administrative penalty is payable under section 22XNI for non-compliance with a relinquishment requirement.

(4) The person does not comply with an order under subsection (2) unless the notice of relinquishment under section 22XNH specifies the order.

(5) To avoid doubt, the person is required to comply with an order under subsection (2) even if:

(a) the person is not the registered holder of any relinquishable units; or

(b) the person is not the registered holder of the number of relinquishable units required to be relinquished.

Copy of order

(6) A copy of an order under subsection (2) is to be given to the Regulator.

Appropriate court

(7) For the purposes of this section, each of the following is an appropriate court :

(a) the court that convicted the person of the offence;

(b) the Federal Court of Australia;

(c) the Supreme Court of a State or Territory.

Spent convictions

(8) Nothing in this section affects the operation of Part VIIC of the Crimes Act 1914 (which includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them).

22XNG Information on Regulator's website regarding relinquishment requirements

(1) If a person is required under section 22XNE or 22XNF to relinquish a specified number of relinquishable units, the Regulator must publish the following information on the Regulator's website:

(a) the person's name;

(b) details of the requirement;

(c) if an amount payable by the person under section 22XNI in relation to non-compliance with the requirement remains unpaid after the time when the amount became due for payment - details of the unpaid amount;

(d) if the person relinquishes one or more units to comply with the requirement - the total number of units relinquished.

(2) If a decision by the Regulator under section 22XNE is the subject of an application for review made to the Administrative Appeals Tribunal, the Regulator must publish an appropriate annotation on the Regulator's website about:

(a) the application; and

(b) when the review by the Administrative Appeals Tribunal (including any court proceedings arising out of the review) has been finalised.

Subdivision C - Compliance with relinquishment requirement

22XNH Relinquishing safeguard mechanism credit units etc. to comply with requirements

(1) If:

(a) a person is required under section 22XNE or 22XNF to relinquish a specified number of relinquishable units; and

(b) the person is the registered holder of one or more relinquishable units;

the person may, by electronic notice transmitted to the Regulator, relinquish any or all of the units held by the person.

(2) The notice must specify:

(a) the units that are being relinquished; and

(b) the requirement to which the relinquishment relates; and

(c) the account number or account numbers of the person's Registry account, or the person's Registry accounts, in which there is an entry or entries for the units that are being relinquished.

(3) The units relinquished are cancelled and the Regulator must remove the entries for those units from the person's Registry account.

(4) The Registry must set out a record of each notice under subsection (1).

22XNI Administrative penalty if relinquishment requirements not complied with

Scope

(1) This section applies if:

(a) a person is required under section 22XNE or 22XNF to relinquish a particular number of relinquishable units; and

(b) the person is required to do so by a particular time (the compliance deadline ).

No units relinquished

(2) If, by the compliance deadline, the person has not relinquished any units in order to comply with the requirement, the person is liable to pay to the Commonwealth, by way of penalty, an amount worked out using the formula:

where:

prescribed amount means the greater of the following amounts:

(a) $20;

(b) 200% of the market value of a safeguard mechanism credit unitas at the compliance deadline.

Relinquishment of insufficient units

(3) If, by the compliance deadline:

(a) the person has relinquished one or more units in order to comply with the requirement; and

(b) the number of units is less than the number of units required to be relinquished;

the person is liable to pay to the Commonwealth, by way of penalty, an amount worked out using the formula:

where:

prescribed amount means the greater of the following amounts:

(a) $20;

(b) 200% of the market value of a safeguard mechanism credit unitas at the compliance deadline.

When penalty becomes due and payable

(4) An amount payable under this section is due and payable at the end of 30 days after the compliance deadline.

Compliance

(5) To avoid doubt, a person may be liable to pay a penalty under this section even if:

(a) the person is not the registered holder of any relinquishable units; or

(b) the person is not the registered holder of the number of relinquishable units required to be relinquished.

Market value

(6) The safeguard rules may provide that, for the purposes of this section, the market value of a safeguard mechanism credit unit is to be ascertained in accordance with those rules.

22XNJ Late payment penalty

Penalty

(1) If an amount payable by a person under section 22XNI remains unpaid after the time when it became due for payment, the person is liable to pay, by way of penalty, an amount calculated at the rate of:

(a) 20% per annum; or

(b) if a lower rate per annum is specified in the safeguard rules - that lower rate per annum;

on the amount unpaid, computed from that time.

Power to remit

(2) The Regulator may remit the whole or a part of an amount payable under subsection (1) if:

(a) the Regulator is satisfied that the person did not contribute to the delay in payment and has taken reasonable steps to mitigate the causes of the delay; or

(b) the Regulator is satisfied:

(i) that the person contributed to the delay but has taken reasonable steps to mitigate the causes of the delay; and

(ii) having regard to the nature of the reasons that caused the delay, that it would be fair and reasonable to remit some or all of the amount; or

(c) the Regulator is satisfied that there are special circumstances that make it reasonable to remit some or all of the amount.

(3) The Regulator may exercise the power conferred by subsection (2):

(a) on written application being made to the Regulator by a person; or

(b) on the Regulator's own initiative.

Refusal

(4) If:

(a) the Regulator decides to refuse to remit the whole or a part of an amount payable under subsection (1); and

(b) the Regulator made the decision in response to an application;

the Regulator must give written notice of the decision to the applicant.

22XNK Recovery of penalties

An amount payable under section 22XNI or 22XNJ:

(a) is a debt due to the Commonwealth; and

(b) may be recovered by the Regulator, on behalf of the Commonwealth, by action in a court of competent jurisdiction.

22XNL Set-off

If:

(a) an amount (the first amount ) is payable under section 22XNI or 22XNJ by a person; and

(b) the following conditions are satisfied in relation to another amount (the second amount ):

(i) the amount is payable by the Commonwealth to the person;

(ii) the amount is of a kind specified in the safeguard rules;

the Regulator may, on behalf of the Commonwealth, set off the whole or a part of the first amount against the whole or a part of the second amount.

22XNM Refund of overpayments

Refund

(1) If either of the following amounts has been overpaid by a person, the amount overpaid must be refunded by the Commonwealth:

(a) an amount payable under section 22XNI;

(b) an amount payable under section 22XNJ.

Note: For the appropriation for the refund, see section 77 of the Public Governance, Performance and Accountability Act 2013.

Interest on overpayment

(2) If:

(a) an amount overpaid by a person is refunded by the Commonwealth under subsection (1); and

(b) the overpayment is attributable, in whole or in part, to an error made by the Regulator;

interest calculated in accordance with subsection (3) is payable by the Commonwealth to the person in respect of the amount refunded.

(3) Interest payable to a person under subsection (2) in respect of an amount refunded to the person is to be calculated:

(a) in respect of the period that:

(i) began when the overpaid amount was paid to the Commonwealth; and

(ii) ended when the amount was refunded; and

(b) at the base interest rate (within the meaning of section 8AAD of the Taxation Administration Act 1953).

(4) The Consolidated Revenue Fund is appropriated for the purposes of making payments of interest under subsection (2).

22XNN Stay of proceedings for the recovery of an administrative penalty

Scope

(1) This section applies if:

(a) a notice was given to a person under section 22XNE; and

(b) the notice required the person to relinquish a particular number of relinquishable units; and

(c) the person did not comply with the requirement within 90 days after the notice was given; and

(d) proceedings for the recovery of the penalty payable under section 22XNI in respect of the non-compliance with the requirement (including any late payment penalty payable under section 22XNJ in relation to the section 22XNI penalty) are before a court; and

(e) the decision to require the person to relinquish a specified number of relinquishable units is the subject of an application for review by the Administrative Appeals Tribunal.

Stay of proceedings

(2) The court may stay the proceedings until the review by the Administrative Appeals Tribunal (including any court proceedings arising out of the review) has been finalised.

(3) This section does not limit the power of:

(a) a court; or

(b) a Judge; or

(c) a magistrate;

under any other law to order a stay of proceedings.