The Clean Energy Regulator will judiciously apply our knowledge and experience to adapt our approach in line with the objectives of the schemes we administer. Our approach to scheme administration and regulation is informed by our regulatory posture, our education, enforcement and compliance strategy and our risk appetite.
Our regulatory posture
The Clean Energy Regulator has a diverse range of engagement, education, compliance and enforcement tools at its disposal to administer its schemes, encourage voluntary participation and optimise compliance.
We monitor clients' and participants' ability and willingness to meet their obligations under the legislation, using a risk-based approach to detect non-compliance and encourage compliance. Our approach is based on:
- assisting participants to understand their rights and obligations through education, training, guidance and other resources
- supporting those who want to do the right thing, including by using participant feedback to enhance relevant systems, resources and processes
- ensuring that procedural fairness and natural justice are consistently applied to all participants
- ensuring that decision-making follows rigorous governance processes and can withstand review and scrutiny, including by the Administrative Appeals Tribunal and courts
- using intelligence and information analysis to help inform all regulatory response decisions
- ensuring that regulatory responses are proportionate to the risks posed by any non-compliance, taking into account the conduct of scheme participants (including their compliance history)
- actively pursuing those who opportunistically or deliberately contravene the law, and
- ensuring that investigative processes and the resolution of enforcement matters are conducted as efficiently and professionally as possible.
Our compliance strategy
In 2016–17 the Clean Energy Regulator will enhance its compliance capability by appointing a compliance strategist. This will allow for the development of compliance strategies that are consistent across all schemes and with our objectives and approach. A holistic approach will allow the Clean Energy Regulator to monitor indicators for the early detection of scheme fraud and effectively address or reduce the possibility of exploitation.
The Clean Energy Regulator's strong working relationships with its regulatory partners and other Commonwealth agencies are vital to its ability to build a complete compliance picture. The agency will build on and maintain these partnerships to further improve communication and ensure timely, reliable information sharing.
Our risk appetite
The Clean Energy Regulator has a finite resource base within which we must manage material risks. We are discerning risk takers and use our knowledge and evidence to inform our decisions, processes and engagement. We learn from our experiences and we adjust our controls accordingly.
Our risk appetite statement articulates the level of risk consequence the agency is willing to accept in pursuing its purpose and objectives. The statement establishes a common understanding and has enabled us to streamline regulatory processes across and within schemes, target resources towards areas of highest regulatory risk, reduce compliance obligations on low-risk stakeholders, and achieve organisational efficiencies.
Regulatory officer development training has assisted to embed an understanding of risk and how to apply it to the decisions we make. A summary of the Clean Energy Regulator's risk appetite statement is set out below:
| Risk category | Risk appetite | Comment |
|---|
| People | neutral to open | We are prepared to be innovative and open in the way we recruit, develop and engage our staff.
We have no appetite for any breaches of the
Work, Health & Safety Act 2011 or for a culture that does not embrace the APS Values and Code of Conduct. |
| Financial | conservative to neutral | We recognise the Commonwealth is operating in a constrained financial environment. We have no appetite for a breakdown of financial controls, mismanaging our cash or material errors in financial reporting. |
| Systems and Facilities | open | We understand there is a limited level of government funding to maintain existing and invest in new systems and processes.
We have no appetite for security breaches which impact on the integrity of our systems and data. We have appetite for implementing adaptable client-facing self-service systems when cost effective and learning by doing. |
| Reputation | conservative to neutral | We acknowledge the Clean Energy Regulator's portfolio of regulatory responsibilities can be subject to significant scrutiny.
We are not motivated by avoiding criticism. We have no appetite for failing to implement government policy or irreparable loss of trust. We have appetite for actively nurturing our reputation with clients. |
| Scheme compliance and effectiveness | neutral | Schemes administered by the Clean Energy Regulator have a mix of mandatory and voluntary participation. We take a balanced and proportionate approach to compliance, recognising we are in an environment of finite resources. In the interest of lowering transactional costs, we accept non-material and non-systemic non-compliance.
We have no appetite for fraudulent conduct under our schemes. We have appetite for transparency to support the functioning of the market. |
| Internal conformance | neutral | As a regulatory body, it is important the agency is able to demonstrate conformance with its statutory obligations.
We have some appetite for accidental breaches of our obligations where acceptable corrective action has been taken. |
| Risk appetite | Definition |
|---|
| Conservative | We are not comfortable with activities that may adversely impact the agency or our schemes. |
| Neutral | We understand that some risk must be taken in pursuit of objectives. We will accept circumstances where more risk is taken so long as it is balanced against the risk of investment. |
| Open | We will accept instances where risk is well managed and outweighed by substantial return on investment. |
STRATEGIC RISKS
The key strategic risks identified as most likely to affect our ability to realise our purpose and objectives are:
- uncertainty impedes us from achieving our purpose
- our accountabilities are misunderstood, with substantial consequences
- we get a job that does not align with our purpose
- we cannot free resources, or we lack critical capability, to meet changing demands.
The Clean Energy Regulator's strategic and operational risks are actively monitored and reported through the agency's performance reporting framework and are complemented by a robust fraud control plan and business continuity management plan.