Second Reading SpeechMr Combet (Minister for Climate Change and Energy Efficiency)
That this bill be now read a second time.
The Carbon Credits (Consequential Amendments) Bill 2011 contains consequential amendments and transitional provisions relating to the Carbon Farming Initiative and the establishment of the Australian National Registry of Emissions Units. It also makes various amendments to the National Greenhouse and Energy Reporting Act 2007.
The bill seeks to amend five acts. Most of the proposed amendments will apply existing legislation relating to financial services, anti-money laundering and counter-terrorism financing to units held in the registry. The amendments are intended to provide additional safeguards to protect purchasers of Australian carbon credits and international units, and to provide deterrence against criminal activities involving the Carbon Farming Initiative.
The proposed amendments to the Corporations Act 2001 and Australian Securities and Investments Commission Act 2001 will provide a strong regulatory regime to reduce the risk of market manipulation and misconduct relating to Australian carbon credits and eligible international emissions units. Appropriate adjustments to the regime to fit the characteristics of the different types of units and to avoid unnecessary compliance costs will be made through regulations.
As required by the Corporations Agreement between the Commonwealth, states and territories, the Ministerial Council for Corporations has been consulted about the amendments to the corporations legislation.
The bill also proposes amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 to ensure that financial institutions and other persons who buy and sell Australian carbon credit units and eligible international emissions units are regulated under that act. These bodies will be subject to reporting and other requirements, including requirements to verify their customer's identity prior to trading in Australian carbon credit units or international emissions units.
To ensure that the Carbon Credits Administrator has sufficient information to tackle undesirable behaviours by scheme participants, administrators with relevant information, such as the Australian Competition and Consumer Commission, the Australian Securities and Investments Commission and the Greenhouse and Energy Data Officer, will need to be able to share this information with the administrator. The bill therefore proposes amendments to the Competition and Consumer Act 2010, the Australian Securities and Investments Commission Act 2001 and the National Greenhouse and Energy Reporting Act 2007. This will allow, for example, ASIC to disclose information that it possesses about wrongdoing in connection with trading of Australian carbon credit units which is also of significance to the administrator as the operator of the registry.
Part 27 of the Carbon Credits (Carbon Farming Initiative) Bill allows reciprocal flow of relevant information from the Carbon Credits Administrator to these bodies where it is required.
The bill also proposes amendments to the NGER Act to allow the audit framework for the Carbon Farming Initiative to utilise the existing audit framework under the NGER Act. It also proposes to extend the arrangements for reporting transfer certificates beyond 30 June 2011, and other amendments to the act.
Using the existing audit framework under the NGER Act will promote administrative efficiency and reduce duplication; for example, there will be a single register for qualified assurance auditors. It reduces complexity for auditors (many of whom will operate under both acts) as they are already familiar with audit requirements set out under the NGER Act and can apply the same legislative requirements in areas of overlap between NGER and the Carbon Farming Initiative legislation.
Reporting transfer certificates allow the voluntary transfer of reporting obligations relating to a facility from a registered controlling corporation to another corporation. This could occur where the other corporation has financial control of the facility and formally applies for the transfer of responsibilities. These provisions are voluntary and impose no additional burden on industry stakeholders. They are intended to reduce administration and economic costs for industry and increase flexibility in establishing reporting arrangements.
The reporting transfer certificate arrangements were a temporary measure and it was intended they would be replaced by the liability transfer certificate provisions of the proposed Carbon Pollution Reduction Scheme legislation. As this legislation failed to pass the Senate, it is necessary to extend these arrangements.
The bill also provides for transitional measures arising from the Carbon Credits (Carbon Farming Initiative) Bill and the Australian National Registry of Emissions Units Bill. It is proposed that accounts held in the non-statutory registry prior to commencement of the bill will continue in existence under the legislated registry. Pre-existing audit determinations will also continue to have effect.
The consequential amendments contained in this bill are important for the efficient and effective operation of the Carbon Farming Initiative and the National Greenhouse and Energy Reporting System. The amendments seek, where possible, to streamline institutional and regulatory arrangements and minimise administrative costs in both schemes, and to provide additional safeguards for the Carbon Farming Initiative.
I should perhaps have noted during the course of this second reading speech that references to NGER in my address refer to the National Greenhouse and Energy Reporting Act.
I commend this bill to the House.
Debate (on motion by Mr Turnbull) adjourned.