There are serious consequences for failure to comply with the
obligations set out in the Clean Energy Act 2011 (CE Act)
and the National Greenhouse Energy Reporting Act 2007
(NGER Act). The CE Act sets out a wide range of obligations in
relation to carbon and also establishes the Clean Energy Regulator
(Regulator), which has a broad set of powers.
To ensure compliance, the Regulator has wide powers to
investigate and enforce the CE Act and the NGER Act. For more
serious and continuing offences, the Regulator will take corrective
action. This may involve the issuing of infringement notices,
enforceable undertakings or even pecuniary penalties.
Under the CE Act there are general obligations to keep records
about liability and compliance with obligations. The Regulator
under the CE Act has the power to obtain information (including
records). The powers extend to the requirement to produce documents
through to an inspection of premises. The inspection powers may
only be used with the consent of the occupier or under a warrant
obtained from the Magistrates Court to enter the premises.
The enforcement powers vary depending on the nature and
seriousness of the offence committed. Enforcement powers range from
administrative penalties to substantial civil penalties and
criminal sanctions for dishonesty and fraudulent behaviour.
Audit powers under the National Greenhouse and
Energy Reporting Act 2007 (NGER Act)
The NGER Act provides for audits of companies required to report
under the NGER Act. The purpose of these is to determine the extent
to which a company (based on the reports) has complied with the
requirements of the NGER Act and the Regulations. There are two
ways that the Regulator can initiate audits where it suspects
breaches of the legislation. The Regulator can compel a corporation
to be audited if there are reasonable grounds to suspect that a
registered corporation has not met, is not meeting or is proposing
not to meet its obligations. However where there is no suspicion of
non-compliance, the Regulator may still organise an audit that
forms part of a broader compliance strategy. Written notices must
be issued in both instances.
Response to contraventions
The Australian Government Clean Energy Regulator's
Compliance, Education and Enforcement Policy indicates that the
Regulator will use targeted education, where appropriate, when
responding to contraventions. The policy has a strong focus on
educating participants as opposed to using punitive action. The
Regulator is offering a compliance carrot, by primarily focusing on
making participants aware of their statutory obligations, and
providing them with the appropriate education and guidance to meet
these obligations in the future. However where it is necessary,
contraventions will attract automatic fines, an example being a
failure to pay a shortfall charge (imposed on a company that does
not have sufficient carbon units or that surrenders insufficient
carbon units) under the CE Act.
The Regulator will publish details of infringement notices where
it has commenced court action against a corporation. Under the CE
Act, the Regulator has an obligation to publish certain types of
information, such as administrative penalties or when an
enforceable undertaking is accepted.
Implications for businesses
Given the enforcement powers available to the Regulator under
the CE Act and the NGER Act, it is important that companies
required to comply with these Acts have the necessary business
mechanisms (financial, accounting and legal) in place. It is much
better for a company (and its directors) to accept the compliance
carrot and to ensure appropriate mechanisms are in place to record
and report data rather than receive the compliance stick from the
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The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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