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Clean Energy Regulator Objectives

The five specific responsibilities outlined in the Statement of Expectations are the Clean Energy Regulator's major objectives. Steps are being taken, and measures implemented, to enable the Clean Energy Regulator to achieve all five objectives. These will lead to the realisation of the Clean Energy Regulator's vision.

Ensuring regulated entities are meeting their obligations, reporting correct information and receiving entitlements

Through its deployment of people, processes and systems, the Clean Energy Regulator is putting into operational form the requirements of the legislation which it administers. This work is designed to address the risk that clients are uninformed, unwilling or unable to comply.

The Clean Energy Regulator has done significant work in the first six months to establish its regulatory posture, drawing extensively on the experience of its more established schemes, namely the Renewable Energy Target and National Greenhouse and Energy Reporting. The cornerstone of this work is the Education, Compliance and Enforcement Policy. The Policy sets out the principles adopted by the Clean Energy 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 Clean Energy Regulator recognises that engagement, education and support, in the first instance, assist clients to meet their obligations and avoid inadvertent non-compliance. To this end, the Clean Energy Regulator publishes guidelines, factsheets, booklets, brochures, newsletters and calculators. Additionally, the Clean Energy Regulator ensures that clients have the opportunity to raise issues of concern and participate in workshops and discussion forums.

The Clean Energy Regulator is developing in stages a range of new forms, processes and systems to meet the legislated milestones of the carbon pricing mechanism. Where possible, these are tested with clients and refined iteratively as new systems are released.

Protecting the integrity of instruments (units)

The carbon pricing mechanism, the Carbon Farming Initiative and the Renewable Energy Target are all market-based instruments which operate through the issuance, trade and surrender of units of various types. A full spectrum of education, compliance and enforcement measures has been deployed over many years to protect the integrity of the renewable energy certificates. A similar range of measures is being deployed with respect to carbon units. This includes assisting clients in the protection of their property through education and guidance around integrity, security and due diligence.

The Clean Energy Regulator's internal control systems also play an important role in protecting the integrity of the instruments. The Clean Energy Regulator understands the need to achieve the highest standards of security, which is why its staff are provided with the right tools and information, so as to be vigilant about the security of the Agency's premises, systems and the information it holds.

The Clean Energy Regulator has established relationships with a range of Commonwealth and State agencies. By regularly sharing information between agencies, the Clean Energy Regulator can ensure that inappropriate behaviour, such as scams and unregulated financial advice, is quickly brought to heel before the reputation of the instrument is damaged. The Clean Energy Regulator will continue to make strategic alliances to safeguard the integrity of the instruments, including with relevant agencies overseas, in anticipation of international linking.

Each of these elements, correctly implemented, contributes to the integrity of the Clean Energy Regulator's schemes and the units that are created within them.

Administering the schemes effectively

The Clean Energy Regulator is working hard to build a strong reputation with its clients and the broader community. The Clean Energy Regulator is committed to being open and accessible, as outlined in the Regulator's Service Charter, and to providing clear guidance about regulatory requirements and timelines. This is expected to build client confidence and, in its turn, increase the level of voluntary compliance, which will ultimately reduce administrative costs for the Agency and compliance costs for clients. Over time, regulatory operations will be streamlined and integrated within and across the schemes to reduce regulatory burden and take advantage of the depth of regulatory experience within the Agency. This will ensure consistency in service delivery and will provide a familiar point of contact to our clients.

The Clean Energy Regulator is also implementing a strong performance management system to allow for the monitoring, measurement and reporting on its regulatory performance. Standard operating procedures, strong internal controls and a risk based approach to resource allocation are all measures which contribute to effectiveness. These measures will also enable the Clean Energy Regulator to enhance operational efficiency, for example by allowing for the consistent execution of regulatory activities. The Clean Energy Regulator is committed to the principle of continuous improvement to achieve repeatable and reliable processes that minimise steps, reduce the risk of error and avoid multiple handling.

The Clean Energy Regulator will ensure that in the development of its business processes and external systems that it reflects the Government's commitments to business and industry to reduce the reporting burden. For example, the Clean Energy Regulator is undertaking a number of activities aimed at leveraging the Standard Business Reporting initiative including, in the shorter term, implementing the Auskey authentication service.

Building confidence in the market and the Clean Energy Regulator

To be effective, the Clean Energy Regulator must be seen to be taking timely decisions that are even handed, fair, documented, communicated to a consistent standard and based on the facts and the law. A strong governance framework has been implemented to support this aim. This includes the delegations framework and standard operating procedures for good decision making and a mechanism for Internal Decision Review.

More generally, confidence in the Regulator depends on clients knowing what they can expect in their dealings with the Regulator and client service being maintained at a consistent high standard. To this end, the Compliance, Education and Enforcement Policy was published early in the Clean Energy Regulator's operations. In the spirit of the published policy, the Clean Energy Regulator seeks to work with clients proactively to rectify issues, help them achieve voluntary compliance and achieve the best possible reporting and data outcomes.

The Clean Energy Regulator can help build confidence in the market by reducing the risk of fraud via the design and implementation of effective anti-fraud controls. The Clean Energy Regulator's Fraud Policy Statement outlines a systematic and stringent approach to the prevention and detection of fraud committed against the Agency. This is further supported by strong internal fraud control measures, which the Clean Energy Regulator is continuing to strengthen in tandem with the staged implementation of the carbon pricing mechanism.

Information also helps build confidence in the market. While maintaining the necessary protections for confidential information, the Clean Energy Regulator intends to make the most of opportunities to do more than the legislated minimum to help the market develop efficiently. Continual disclosure, updated estimates and clearly 'telegraphed' final target setting (in the case of the Renewable Energy Target) will help markets to trade on fundamentals and not on fear.

International linking will bring another dimension to the market from the commencement of the flexible price period in 2015. The Clean Energy Regulator is working proactively with the Department and with its counterparts in Europe to ensure the system for one-way linking with Europe is in place when required.

Providing data and information to assist decision makers (both internal and external)

The Clean Energy Regulator maintains a number of major data sets. They include information collected through the Renewable Energy Target, the National Greenhouse and Energy Reporting Scheme and the data held in the Australian National Registry of Emissions Units and the Renewable Energy Certificate Registry. This information is relied upon for regulatory decision making and also has value for decision-makers across government and in the private sector. In many cases, the Clean Energy Regulator is the primary source of data.

The Clean Energy Regulator is subject to a range of statutory requirements, in terms both of protecting certain information and of publishing information. Memoranda of understanding with various government agencies set out the terms on which information may be shared with those agencies and help give effect to the principle that data collected by the Regulator need not be collected again by others.

In addition the Clean Energy Regulator has developed an Information Management Strategy to provide a very clear and consistent approach to collecting, storing and using information. Products such as the non-binding estimate for the Renewable Energy Target and the results of the National Greenhouse and Energy Reporting System Scheme Audit Report will be published by the Clean Energy Regulator for the use of clients and other stakeholders, alongside the public data sets required by legislation such as the Liable Entities Public Information Database.

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