Important note
The Clean Energy Regulator’s Compliance, Education and Enforcement Policy is made available on the
understanding that the Commonwealth is not providing professional advice. Before relying on any material,
readers should obtain appropriate professional advice.
The information contained in this policy is current at the time of release but is subject to change. While
reasonable care has been taken in preparing this information, the Commonwealth provides no warranties
and makes no representations that the information is correct, complete or reliable. The Commonwealth
expressly disclaims liability for any loss, however caused and whether due to negligence or otherwise, arising
directly or indirectly from the use or reliance on information contained in the policy.
Published by the Clean Energy Regulator
www.cleanenergyregulator.gov.au
ISBN: 978-1-922111-01-2
© Commonwealth of Australia 2012
This work is licensed under the Creative Commons Attribution 3.0 Australia Licence. To view a copy of this
licence, visit http://creativecommons.org/licenses/by/3.0/au.
The Clean Energy Regulator asserts the right to be recognised as author of the original material in the
following manner:
or
© Commonwealth of Australia (Clean Energy Regulator) 2012
GPO Box 621
Canberra ACT 2601
Phone: 1300 553 542 within Australia
Email: [email protected]
Translating and Interpreting Service (TIS)—13 14 50
National Relay Service 133 677 TTY Service [TTY/Voice]
1300 555 727 [Speak and Listen (SSR)]
GPO Box 621 Canberra ACT 2601
1300 553 542
[email protected]
www.cleanenergyregulator.gov.au
2
1. Purpose
This policy sets out the principles adopted by the Clean Energy Regulator (the Regulator) to optimise
compliance with the climate change laws it administers, including the role of education and its approach to
compliance monitoring and enforcement. The policy sits within the broader Australian Government law
enforcement policy context and should be read in conjunction with other relevant documents.1
2. Overview
The Clean Energy Regulator is an independent regulator responsible for administering a number of climate
change laws, including:

Clean Energy Act 2011

National Greenhouse and Energy Reporting Act 2007

Renewable Energy (Electricity) Act 2000

Carbon Credits (Carbon Farming Initiative) Act 2011, and

Australian National Registry of Emissions Units Act 2011.
The purpose of these laws are to:

encourage the use of clean energy

provide for the reporting and dissemination of information related to greenhouse gas emissions, energy
consumption and energy production of corporations

encourage the generation of electricity from renewable sources

provide for projects to remove carbon dioxide from the atmosphere and projects to avoid emissions of
greenhouse gases, and

provide a legislative basis for the Registry, used to issue and monitor emissions units.
These laws provide the Regulator with a range of monitoring and enforcement powers. Monitoring powers
include independent audit, information gathering and inspections. Enforcement includes powers to suspend
or revoke various permissions, accept enforceable undertakings from a regulated entity, issue infringement
notices, or pursue legal action for breaches of civil penalty provisions. There are also criminal sanctions for
persons or organisations found to have breached offence provisions contained in laws administered by the
Regulator, or found to have engaged in dishonest or fraudulent conduct in connection with schemes
established by those laws. The terminology used across the Acts differs in some instances. The Regulator
recommends that you read the individual Acts for specific definitions.
The Regulator combines the functions of the former Greenhouse Energy Data Officer, Renewable Energy
Regulator and Carbon Farming Initiative Administrator. Transitional arrangements allow enforcement
activities commenced under the former arrangements to continue under the Regulator.
1
Prosecution Policy of the Commonwealth; Commonwealth Fraud Control Guidelines; Overarching Principles for
Selecting Cases for Investigation and Administrative, Civil and Criminal Sanctions.
GPO Box 621 Canberra ACT 2601
1300 553 542
[email protected]
www.cleanenergyregulator.gov.au
3
3. Approach
The Regulator will encourage participants to voluntarily comply with legislative requirements.
The Regulator’s approach will be based on the following considerations:

Assisting participants to understand their rights and obligations through education and training
programs

Supporting those who want to do the right thing and, where appropriate, incorporating feedback into
enhancement of systems and processes

Using intelligence analysis where possible to inform regulatory response decisions

Ensuring that procedural fairness is consistently applied to all participants so the system is seen as
equitable and fair, exercising monitoring and enforcement powers independently in the public interest
with integrity and professionalism and without fear, favour or bias

Ensuring that decision-making takes place within rigorous corporate governance processes and is able to
be reviewed internally, and externally by relevant bodies, including the Administrative Appeals Tribunal
and the courts (information about how to apply for an internal review of a decision can be found on the
Clean Energy Regulator’s website)

Actively pursuing those who opportunistically or deliberately contravene the law

Ensuring that regulatory responses are proportionate to the risks posed by any non-compliance and take
into account the conduct of scheme participants, including their compliance history

Conducting investigations professionally, and

Ensuring that the investigative process and the resolution of enforcement matters is conducted as
efficiently as possible.
The Regulator works in close partnership with other regulatory agencies that have regulatory responsibilities
under climate change and other legislation. This includes sharing of relevant information, intelligence
gathering, and referring matters for law enforcement.
ASIC
ACCC
ATO
AUSTRAC
DSEWPaC
Australian Securities
and Investments
Commission
Australian
Competition and
Consumer
Commission
Australian Taxation
Office
Australian
Transaction Reports
and Analysis Centre
Department of
Sustainability,
Environment, Water,
Population and
Communities
Regulates emissions
units as financial
products under the
Corporations Act 2001
and Australian
Securities and
Investments
Commission Act 2001
Addresses
misrepresentations
about the impact of
carbon price on the
price of goods and
services
Applies equivalent
carbon price to specific
fuels under the Fuel Tax
legislation and, utilising
risk management
strategies, ensures the
appropriate income tax
and GST treatment
arising from carbon
price emissions
liabilities
Regulates the trading of
emissions units in the
secondary market as a
‘designated service’
under the Anti-Money
Laundering and
Counter-Terrorism
Financing Act 2006
Applies equivalent
carbon price to
synthetic greenhouse
gases under the Ozone
Protection and
Synthetic Greenhouse
Gas Management
legislation
GPO Box 621 Canberra ACT 2601
1300 553 542
[email protected]
www.cleanenergyregulator.gov.au
4
4. Policy Implementation
Engagement and education
The Regulator recognises that engagement, education and support, in the first instance, assist participants to
meet obligations and avoid inadvertent non-compliance. The Regulator releases information in the form of
guidelines, factsheets, booklets, brochures, newsletters and calculators. Additionally, the Regulator ensures
that participants have the opportunity to raise issues of concern and participate in workshops and discussion
forums. Where possible, the Regulator will seek opportunities to engage with participants during the
development of its systems through user-centred design processes.
Responsibility for complying with relevant requirements under legislation administered by the Regulator,
including ensuring the accuracy of all information provided to the Regulator, rests with the individual person
or organisation affected by the legislation.
Monitoring compliance
The Regulator monitors compliance with the climate change laws to:

determine levels of compliance and identify trends in behaviour

detect possible contraventions

identify whether, and what type of, education and/or enforcement action may be required, and

assess the effectiveness of its operations and programs, and identify opportunities for improvement.
Compliance monitoring may occur through:

checking of information provided in applications under the various legislative schemes and to the
registries

analysis of information reported by persons and organisations

analysis of information from other sources, such as the general public, peak bodies and industry groups,
non-government organisations, other government agencies and international organisations

analysis of information obtained under the Regulator’s information gathering powers

inspections, and

audits.2
Contraventions
Suspected contraventions of the climate change laws administered by the Regulator will be assessed to
determine the appropriate response. A preliminary examination and analysis of relevant facts will be
conducted to decide the likelihood that a contravention has occurred or is about to occur, its seriousness
and its likely consequences.
While all suspected contraventions will be carefully considered, the Regulator will exercise its discretion in
determining the type of response it will employ to address a contravention and resolve matters, including
whether to investigate further.
2
Inspections and Audits have different means in each Act. Refer to the relevant Act.
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5
Response to contraventions
Targeted education will be used, where appropriate, in response to contraventions. This seeks to ensure that
participants are made aware of their legislative obligations, and are provided with guidance to assist them in
meeting these obligations in the future. However, in some circumstances, contraventions will attract an
automatic penalty, such as the failure to pay a shortfall charge under the Clean Energy Act 2011.
For serious or continuing contraventions, corrective action will be used that may include exercise of
suspension and revocation powers, infringement notices, enforceable undertakings or pecuniary penalties.
Where there is suspected breach of an offence provision, or suspected fraudulent or dishonest behaviour, it
will be referred for investigation and prosecution.
The Regulator is less likely to pursue court action where a person is acting in good faith and/or is willing to
resolve matters administratively.
Publication of contraventions
The Regulator will publish the issuance of infringement notices and commencement of court action. In some
cases the Regulator has an obligation to publish information, such as the application of administrative
penalties and the acceptance of enforceable undertakings under the Clean Energy Act 2011.
The Regulator will use its discretion when considering publication of other forms of breaches.
The Regulator will publicise circumstances and patterns of behaviour it identifies that indicate potential noncompliance or are likely to trigger investigation and enforcement action.
GPO Box 621 Canberra ACT 2601
1300 553 542
[email protected]
www.cleanenergyregulator.gov.au
6
Criteria for determining appropriate responses
In determining appropriate responses to non-compliance, the Regulator will use a risk-based approach that
takes into account participants’ behaviours and motivations. The continuum at Figure 1 (below) shows these
behaviours and motivations, with the Regulator’s potential response according to the level of risk these
behaviours pose.
Behaviours and motivation
Voluntary Compliance


Informed self
assessment
Management is
compliance-oriented
Accidental NonCompliance
 Not yet compliant
 Attempting
compliance (eg
developing internal
control systems to
ensure compliance)
Opportunistic NonCompliance
 Resistance to
compliance
 Lack of indication of
intention to comply
(eg no indication of
systems in place to
ensure compliance)
Intentional NonCompliance
 Deliberate noncompliance
 Criminal intent or
fraud
 Other illegal activity
Correct Behaviour
Enforce the Law
Clean Energy Regulator’s response
Help and Support



The Regulator will
release information
and guidelines to
assist understanding
of participants’
obligations
The Regulator will
provide
opportunities for
complying
participants to ask
questions, discuss
issues of concerns
and participate in
educational and
discussion forums
The Regulator will
use proactive audits
to develop a better
understanding of
capabilities to
comply
GPO Box 621 Canberra ACT 2601
Educate and Provide
Feedback
 The Regulator will
provide additional
guidance to targeted
participants
 Where an apparent
non-compliance is
identified, the
Regulator will
provide relevant
parties with an
opportunity to
respond
 The Regulator will
provide feedback on
adequacy of systems
and arrangements to
ensure compliance
1300 553 542



The Regulator will

respond to detected
non-compliance
according to the
severity (eg
accepting
enforceable
undertakings, giving
infringement notices,
revocation and
suspension)
Contraventions that
have a serious
impact will be dealt
with accordingly
Publication of
information about
breaches and
enforcement
activities
[email protected]
Where appropriate,
the Regulator will
initiate
investigations,
pursue civil action or
refer any relevant
cases for criminal
prosecution
www.cleanenergyregulator.gov.au
7
5. Policy Review
The Regulator is committed to administering the climate change laws in a transparent, ethical and
accountable manner. As part of this, the Regulator regularly reviews this policy and its implementation,
ensuring that operational experiences and amendments to legislation are incorporated. In the event that
amendments to this policy are required as a result of review findings, this policy will be updated on the
Regulator’s website.
6. Further Information
Further information about the Clean Energy Regulator, the suite of legislation, administrative, civil and
criminal penalties can be found at:
Website: www.cleanenergyregulator.gov.au
Phone: 1300 553 542
GPO Box 621 Canberra ACT 2601
1300 553 542
[email protected]
www.cleanenergyregulator.gov.au
8
Attachment A: Monitoring and Enforcement Options
This attachment outlines the regulator’s enforcement options under the:

Clean Energy Act 2011 (CE Act)

National Greenhouse and Energy Reporting Act 2007 (NGER Act)

Renewable Energy (Electricity) Act 2000 (REE Act)

Carbon Credits (Carbon Farming Initiative) Act 2011 (CFI Act), and

Australian National Registry of Emissions Units Act 2011 (ANREU Act).
Monitoring
Audits by independent auditors: The Regulator may appoint an auditor to audit a person’s compliance with
one or more aspects of the legislation; or, require a person to appoint an auditor if the Regulator believes
that the person has contravened, is contravening or is proposing to contravene the legislation. A person
must appoint an auditor under the CE Act when applying for assistance, such as under the Jobs and
Competitiveness Program.
Inspections: The Regulator will use inspectors/authorised officers to enter premises by consent or under
warrant in order to determine whether the legislation and associated provisions have been complied with,
or to substantiate information provided under the legislation and associated provisions.
Information-gathering: The Regulator may require a person to provide information or documents, where it
believes on reasonable grounds that the information or documents are relevant to the operation of the
legislation.
CE Act
NGER Act
REE Act
CFI Act
Independent audit




Inspections




Information-gathering




Responding to contraventions
Default assessments: The Regulator may make an assessment of a person’s emissions number for an eligible
financial year where it has reasonable grounds to believe that an emissions number, reported under the
NGER Act, is incorrect, or where it believes that a person is a liable entity for that year and the person has
not submitted a report on the emissions number.
Under the REE Act, the Regulator may make an assessment of a liable entity’s large-scale generation shortfall
and associated charge (if any) for the year or, of an entity’s small-scale technology shortfall and associated
shortfall charge for the year.
Anti-avoidance: Where the Regulator concludes that a person has entered into, started to carry out, or
carried out, a scheme for the sole or main purpose of enabling a person to obtain the benefit of one or more
threshold provisions, the Regulator may determine that the CE Act has, and has had, effect as if the person
was not entitled to that benefit.
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www.cleanenergyregulator.gov.au
9
Under the CE Act or the CFI Act, where a person has entered into a scheme to avoid an existing, or future
liability, to pay an administrative penalty or a unit shortfall charge, that person commits an offence.
Under the REE Act, where the Regulator is of the opinion that an arrangement was entered into for the sole
or main purpose of avoiding payment of a renewable energy shortfall charge otherwise than in accordance
with the Act, the entity is liable to pay an amount of shortfall charge equal to the amount that it would have
been liable to pay if the arrangement had not been made.
Enforceable undertakings: The Regulator may accept a written undertaking from a person that they will do,
or refrain from doing, certain things in order to comply with the Act. Breach of such an undertaking may
result in court action.
Infringement notices: Where the Regulator has reasonable grounds to believe that a person has breached a
civil penalty provision, the Regulator may issue that person with an infringement notice. The infringement
notice will specify the contravention and the amount of the penalty. Failure to pay the stated amount may
result in court action in relation to the alleged contravention.
Suspension: The Regulator may suspend a person’s registration where that person has been convicted of an
offence under the REE Act or where the Regulator has reasonable belief that the person has committed any
such offence, or contravened a civil penalty provision. Other reasons for suspension include where the
Regulator is satisfied that the person is not a fit and proper person, or where the registration was obtained
improperly.
Cancellations: The Regulator may cancel recognition of an offsets entity under the CFI Act, where the
Regulator is satisfied that the person is not a fit and proper person.
The Regulator will cancel a Liability Transfer Certificate under the CE Act where the certificate holder no
longer meets the criteria for issue of the certificate. An obligation transfer number may also be cancelled if
the holder has breached the CE Act or associated provisions.
Revocations: The Regulator may unilaterally revoke the declaration of an eligible offsets project under the
CFI Act in various circumstances, for example, where the Regulator is satisfied that the project is no longer
eligible. The Regulator will consult with the project proponent before such a decision is made.
Under the CE Act, the Regulator will revoke the declaration of a designated joint venture if the joint venture
does not meet the declaration test in relation to the facility, or if payment of a unit shortfall charge is more
than 3 months overdue and, despite the joint venture having received a notice, remains unpaid by the next 1
July.
Relinquishment of units: The Regulator may issue to a person a notice requiring the person to relinquish
units under various circumstances, for example, where units are issued to a person as a result of false or
misleading information. Failure to relinquish units may result in the person being liable to pay an
administrative penalty to the Commonwealth. The court may also order relinquishment if units were issued
as a result of fraudulent conduct.
Unilateral closure of registry accounts: The Regulator may unilaterally close a person’s registry account
where that person has contravened, or is contravening, the provisions relating to the Australian National
Registry of Emissions Units. If the Regulator has closed a person’s account, it will not open another account
in that person’s name.
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www.cleanenergyregulator.gov.au 10
The Regulator may also apply the following enforcement options to accounts within the Australian National
Registry of Emissions Units:

refuse to give effect to an instruction to transfer units to or from a registry account

impose conditions restricting or limiting the operation of a registry account for a period of time, or

suspend a registry account for a period of time.
CE Act
NGER
Act
REE Act
CFI Act
Default assessments


Anti-avoidance



Enforceable undertakings




Infringement notices


ANREU
Act

Suspensions

Cancellations


Revocations


Relinquishment of units


Unilateral closure of a registry account

Refuse to give effect to an instruction to transfer
units to or from a registry account

Impose conditions restricting or limiting the
operation of a registry account for a period of time

Court action: The Regulator will pursue legal action, where appropriate, for continuing or serious
contraventions.
Legal action may result in the court:

ordering an injunction requiring a person to do an act, or thing, or restraining a person from certain
conduct

making an order directing a person to comply with an enforceable undertaking (where the court is
satisfied that an enforceable undertaking has been breached)

making an order directing a person to pay to the Regulator an amount up to the amount of any financial
benefit gained, where the gain is directly or indirectly attributable to the breach of an enforceable
undertaking

making an order directing a person to compensate any other person who has suffered loss or damage as
a result of a breach of an enforceable undertaking

ordering relinquishment of carbon units, or Australian, Kyoto Australian and non-Kyoto Australian
carbon credit units, where the issue of the units is attributable to fraudulent conduct by the person
GPO Box 621 Canberra ACT 2601
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[email protected]
www.cleanenergyregulator.gov.au 11

making an order directing a person (including executive officers of bodies corporate) to pay a penalty as
a result of breaching one of the civil penalty provisions (as well as the penalty for the initial breach, some
civil penalty provisions are subject to additional penalties that accrue on a daily basis from the time of
the contravention; some penalties are also scalable), and/or

convicting a person suspected of having contravened any of the various criminal offence provisions in
the Act.
GPO Box 621 Canberra ACT 2601
1300 553 542
[email protected]
www.cleanenergyregulator.gov.au 12
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