Australia: The Climate For Change, Sustainability And Building Green: What Is Required To Develop A Green Building? Part 2

1.4 Commonwealth Legislation

(a) Energy Efficiency Opportunities Act:

  • The Commonwealth Energy Efficiency Opportunities program (EEO program) was introduced in April 2006 to encourage companies to improve their energy efficiency.
  • It does this by requiring large energy users to assess their energy use and identify and report publically on energy saving opportunities. The EEO program is implemented by the Energy Efficiency Opportunities Act 2005 (Cth) (EEO Act) and the Energy Efficiency Opportunities Regulations 2006 (EEO Regulations).
  • The EEO Act applies to corporate groups that use more than 0.5 Petajoules (PJ) of energy per year. If the total energy used by the members of a corporate group exceeds this threshold in a financial year it is mandatory for the "controlling corporation" to apply to register under the EEO program with the Department of Resources, Energy & Tourism (DRET). The controlling corporation's group includes the controlling corporation itself and certain subsidiaries, joint ventures and partnerships.
  • Certain exemptions are available for companies whose main business involves the generation, transmission or distribution of electricity or gas.
  • Once a company has registered under the EEO program, it must provide an assessment and reporting schedule to DRET. The schedule must cover a 5 year assessment cycle and outline how and when the company intends to conduct assessments and report on outcomes.
  • The company must then carry out energy assessments in accordance with the requirements of the EEO Act, the EEO Regulations and the its assessment schedule.
  • The company must publically report on the outcomes of its first assessment, including the company's response. The company will then provide annual updates of further assessments and business responses. The public reports must contain the information specified in the EEO Regulations. The company must also report to DRET by the time its first public report is made, and again within 6 months of the end of the assessment cycle.
  • Where a controlling corporation's group exceeded the threshold in the first year of the EEO program (05/06 financial year), the corporation must have registered by 31 March 2007 and must make its first reports to the public and DRET by 31 December 2008.
  • On 9 May 2008, the Federal Government released the Energy Savings Measurement Guide. This best practice guide provides practical guidance for companies on meeting their obligations under the EEO program. It contains worked examples from five key industry sectors: mineral processing, mining, manufacturing, commercial buildings and transport. It contains guidance on:
  • Developing an energy baseline;
  • Estimating the energy savings from a potential energy efficiency opportunity
  • Evaluating the full costs and benefits for each energy efficiency opportunity;
  • Measuring energy use and energy savings; and
  • Tracking the progress and performance of implemented opportunities.

(b) National Greenhouse and Energy Reporting System (NGER System):

  • The NGER System aims to be a streamlined national reporting point for greenhouse gas emissions and energy data for all programs across jurisdictions. The first reporting year commenced on 1 July 2008 with first reports due by 31 October 2008. The NGER System is designed to collect data to be used in the proposed national Carbon Pollution Reduction Scheme (CPRS). The legislative framework for the NGER System is provided by the National Greenhouse and Energy Reporting Act 2007 (Cth) which commenced in September 2007.
  • The NGER System requires companies at the top of their corporate group in Australia ("controlling corporations") to register and report on behalf of their group. Whether or not a controlling corporation has to report will depend on whether energy use and emissions from "facilities" under the "operational control" of the corporation and entities in its group exceed the relevant threshold.
  • There are "corporate level thresholds" and "facility level thresholds" for both GHG emissions and energy production and consumption. The energy consumption threshold for the first reporting year (08/09) is 500 TJs for corporate groups and 0.1PJ for individual facilities. It is expected that all companies that participate in the EEO program will meet energy consumption reporting thresholds and have to report under the NGER System.
  • One of the aims of the NGER Act is to establish a single reporting scheme that removes the duplicative reporting burden currently experienced by some companies as a result of multiple Commonwealth, State and Territory energy and emissions reporting schemes.
  • Although the NGER System and the EEO program have different purposes, there is duplication as both schemes require companies to measure and report their energy use. To help streamline reporting obligations under these two Commonwealth schemes, the Federal Government has proposed amendments to the EEO Regulations. The amendments are to take effect from 1 July 2008 to coincide with the commencement of the first reporting year under the NGER System.

1.5 Energy Efficiency Government Funding

(a) The New South Wales Climate Change Fund (the 'Fund')

The Fund was established in July 2007. This new program is currently being developed to increase: residential rebates for hot water systems, insulations and rainwater tanks and $40M to support develop Renewable Energy to some commentators are unhappy with the preferences to "residential": and "Commercial/Industry".

  • $100 million Residential Rebate Programhot water systems, insulation and rainwater tanks
  • $30 million NSW Green Business Program
  • $30 million Public Facilities program
  • $40 million Renewable Energy Development Fund
  • $20 million School Energy Efficiency program
  • $100 million Recycling and Stormwater Harvesting Program
  • $20 million Rainwater Tanks in Schools program

The fund will total $310 million over five year and will include rebates, education and grants. In addition, the Climate Change Fund provides $2 million a year for the Central Coast Water Savings Fund

The Climate Change Fund was established under the Energy and Utilities Administration Act 1987. It incorporates the Water and Energy Savings Funds, the Climate Action Grants Program and funding from the Environmental Trust.

(b) Federal Government Funding

The Australian Government is supporting renewable energy through a range of initiatives that compliment the RET Scheme, including:

  • $500 million Renewable Energy Fund which will develop, commercialise and deploy renewable energy in Australia
  • $150 million for solar research and clear energy research; and
  • More than $500 million for the Solar Cities, National Solar Schools and Green Precincts initiatives.

For more information on these initiatives or the RET see

1.6 Possible Government Incentives

  • Link energy efficiency to Council Rates/Tax (UK concept) which levies a charge for efficiency by Rating of Building.
  • Regulate (draconian) reinvestment of Permit Revenue.
  • Phase out Energy Efficiency Obligation when CPRS introduced.
  • UK ETS (CPRS) in the UK does not incentivise Technological Development to reduce Co2.
  • Don't phase out the RET 1.7 UK Examples
  • June 2007 the UK Energy Efficiency Action Plan was published setting out in detail the policy framework for improving efficiency across all sectors of the economy in order to meet the national 9% energy saving target under the EU Energy End-Use Efficiency and Energy Services Directive. The Action Plan policies are projected to deliver energy savings of 18%, double the target.
  • Merton Rule (20%) Renewable Energy Generation of New Builds by Local Authorities).
  • Specific Renewable Energy Planning Guidance: PPS Climate Change/Renewable Energy.
  • CERT (Carbon Emissions Reduction Target) where suppliers of electricity have obligations to invest around $Aus 5.5 billion over the next three years in improving energy efficiency of homes.
  • ACT ON CO2 Calculator enabling individuals (not business) or households to calculate their carbon footprint and generation of a carbon plan. Apart from offering free advice from the Energy Savings Trust, it provides offers from energy companies who are required to provide practical help to reduce energy use at home as well as listing regulated companies who can install Energy Efficient Technologies.
  • Building a Greener Future: a Policy Statement: all new homes to be zero carbon from 2016 with a progressive tightening of the energy efficiency standards in building regulations by 25% in 2010 and by 44% in 2013 up to the zero carbon standard in 2016.
  • Voluntary Code for Sustainable Homes: six star rating for new homes providing an incentive and framework for developers who want to market properties as having high environmental standards.
  • Energy Performance Certificates (EPCs) for domestic homes as part of the Home Information Packs. The EPC provides energy efficiency ratings from A-G and recommendations for improvement. It is law to have an EPC when selling a domestic property and includes newly built homes and large commercial properties. From October 2008, all buildings whenever sold, built or rented will need an EPC.
  • From October 2008, Display Energy Certificates (DECs) will be required for larger public buildings enabling everyone to see how energy efficient public buildings are.

Bracing for green litigation

The courts in NSW are now gradually moving towards generally recognising that climate change impacts and greenhouse emissions should be taken into account in applying and considering ESD principles in planning building projects. However, the regulatory environment for green building energy efficiency requirements and is still taking shape.

With building green, you not only need to consider what property development would do to the environment but conversely, with the judicial recognition of consideration of global warming and climate change impacts, what the environment might do to a proposed development.

There is still uncertainty and speculation about green buildings and their potential exposure to climate change-related litigation risk arising from a failure to minimise potential liability for environmental damage or failure to reduce a building's significant environmental 'footprint'. To date, in NSW, there has been little guidance on how the courts will respond to green litigation issues. The few cases related to climate change that have arisen so far have mostly been challenges to planning approvals or some planning approval process under the Environmental Planning and Assessment Act 1979 (NSW) or the Environment Protection and Biodiversity Conservation Act 1999 (Cth), rather than actions brought against green building developers or owners. Various policy, causation and liability apportionment principles have not yet been developed through the courts.

Areas of Concern

Where there is ignorance of green building, energy efficiency or ESD principles or , just a little knowledge (which is always a dangerous thing), litigation will likely develop. The basis for litigation will be as simple as a breach of contract, but the essence of the breach will likely result from a specific term that requires a builder to deliver a building that has a certain GBCA rating. A task which is fraught with difficulty, it is similar to retaining an architect to warrant that he/she design a building that will meet Council's approval or otherwise you will sue.

There are today instances where major contractors are signing contracts whereby they provide a bank guarantee for not an insignificant amount of money that they will deliver a 5 star Green Star rated building, failing which the principal is entitled to a call upon the guarantee.

A close examination of the GBCA Green Star rating tool will reveal three major considerations:

1) A building can achieve, for example, a 5 star Green Star rating for Office Design and 4 star Green Star Rating for Office As Built;

2) The approval process is conducted by individuals and in some instances, the guidelines are subjective and not objective.

3) Tenants can modify their fitout which will greatly impact on the As Built Rating.

It would be to a contractor's folly to sign a contract with such a provision, especially if the tenant involved does not buy into the project and wants certain modifications.

Major contractors who have a very small appreciation of the requirements under GBCA system are agreeing to clauses which simply could not be achieved. This is a big concern.

For example a standard warranty clause in a head contract or a subcontract could read as follows:

The Contractor warrants in addition t o ay other warranty given or obligation assumed that all the Works and all the items and materials will in every respect be fro for the purposes made know to the Contractor and for all purposes for which the Contractor could reasonably expect they may be used.

If at the time of negotiating the agreement the Contractor was made aware that the building was to be a 5 Star Green Star rated building it is therefore arguable that this warranty clause could be relied upon by the Principal to achieve this outcome.

In Walker v Minister for Planning [2007] NSW LEC 741, the approval given to a proposed concept plan by the Planning Minister was held void for failing to consider climate change flood risk, a factor deemed to be one of public interest and which the Minister was obliged to consider. This case highlights the need for developers and consent authorities to consider and account for the effects of climate change on proposed developments.

Whereas most expect litigation about green buildings to arise from environmental law and regulation with its focus on consideration of environmental impacts (such as greenhouse gas emissions or biodiversity protection) in environmental assessments at the project approval stage, it is reasonable to expect that litigation activity may more readily arise from tort-based, trade practices and corporations law claims in the future.

Tort law actions in negligence, perhaps even product liability or nuisance claim, may feature as specific causes of action in green building litigation.

Likely claims would be based on allegations that the defendant made an unreasonable contribution to climate change impacts, caused or materially contributed to adverse climate change impacts, failed to take reasonable measures to reduce their GHG emissions or energy consumption, failed to meet their green marketing claims in practice or failed to adequately report a listed company's financial exposure to issues arising from climate change or exposure to reputational damage. Claims might be brought by plaintiffs or class actions seeking compensation for damage caused or by environmental or public interest groups seeking to prevent further harm being caused by climate change factors (such as increased greenhouse gas emissions).

US cases suggest that tort-based actions claiming that the defendant contributed to GHG emissions will likely encounter serious obstacles and evidentiary burdens and have low prospects of success. However, cases alleging inadequate or misleading disclosure of required information on energy consumption, pollution reduction or energy efficiency measures or insufficient disclosure of adverse climate changerelated risks, particularly where they impact on corporate reputation or on share value, will have greater prospects of success.


Anvil Hill Project Watch Association Inc v Minister for the Environment and Water Resources [2007] FCA 1480 Walker v Minister for Planning [2007] NSW LEC 741 Drake-Brockman v Minister of Planning & Anor[2007] NSW LEC 490. Gray v The Minister for Planning & Others [2006] NSW LEC 720

Swaab was recently named winner 'Best Law Firm in Australia (Revenue < $20m)' and 'Attribute Award for Exceptional Service (Australia Wide)' and at the 2008 BRW- Client Choice Awards.

To return to Part 1 of this article click here.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions