The Clean Energy Regulator may accept an enforceable undertaking to improve and where necessary enforce compliance with the legislation it administers. This policy explains our approach to enforceable undertakings, including:
This policy comes under our broader compliance framework and should be read in conjunction with its
Compliance policy for education, monitoring and enforcement activities.
Enforceable undertakings are voluntary written statements from the scheme participant that they will do, or refrain from doing, specified action to resolve non-compliance or improve compliance with the legislation administered by the Clean Energy Regulator.
Undertakings are designed to secure effective and efficient remedies to address non-compliance without the need for court proceedings, and to provide non-adversarial and constructive solutions to compliance issues. An undertaking may operate in conjunction with other regulatory actions taken by the Clean Energy Regulator.
An enforceable undertaking is one of a number of remedies available to the Clean Energy Regulator to address non-compliance. It is a regulatory option we may accept as an alternative to civil court action or other administrative action.
Undertakings are governed by the following legislation:
Our power to accept enforceable undertakings enhances our ability to enforce compliance with the law. They are also an important tool in our suite of regulatory options to influence behaviour, encourage a culture of compliance and may also set out acceptable standards of practice to the broader industry.
An undertaking can be initiated by a scheme participant, or as a result of discussions between a scheme participant and the Clean Energy Regulator. Although binding, the participant’s undertaking must be voluntary — we do not have the power to require a scheme participant to enter into an enforceable undertaking. A scheme participant cannot compel the Clean Energy Regulator to accept an undertaking. We will consider each case on its merits and acceptance of a particular undertaking should not be regarded as a binding precedent for future action.
An enforceable undertaking is different from an undertaking to a court (see Table 1).
Clean Energy Regulator does not have to start court action before it can accept an undertaking.
An undertaking may only be given when a court action has started.
Clean Energy Regulator may apply to the court for appropriate orders if the undertaking is not complied with or take other regulatory actions.
A breach of the undertaking may itself be the subject of contempt proceedings (i.e. it may be enforced in the same way as an injunction).
A scheme participant wishing to enter into an undertaking should first discuss it with the regulatory officer assigned to their case. After the offer has been made and the terms of the undertaking are discussed, the decision to accept or reject the offer will be made by an authorised senior official of the Clean Energy Regulator.
In the course of drafting the undertaking, we will negotiate the terms with the scheme participant to arrive at an appropriate regulatory outcome. While an enforceable undertaking is negotiated between the Clean Energy Regulator and the scheme participant, it cannot be used as leverage by the scheme participant to obtain a more favourable outcome or less punitive enforcement action taken by us. Acceptance of an undertaking in a particular set of circumstances cannot be regarded as a binding precedent for future action — each instance of non-compliance is addressed on a case-by-case basis.
The undertaking will take effect when both parties have signed it.
When deciding whether an undertaking is appropriate in the circumstances of the case, the Clean Energy Regulator will consider the following factors (note, this list is not exhaustive):
Where the non-compliance was intentional, criminal or fraud was committed, we are likely to take stronger compliance action rather than entering into an enforceable undertaking.
The table below illustrate the kinds of undertakings we may accept. These are not exhaustive, and every undertaking is tailored to the particular circumstances of a matter.
The scheme participant improperly created small-scale technology certificates (STCs) that did not comply with regulation 20AC of the REE Regulations nor with section 24A of the REE Act. The scheme participant undertakes to develop and implement increased compliance procedures prior to any STC creation, rectify all existing non-compliance, comply with all requirements under the Act and the Regulations and report monthly to the Clean Energy Regulator on rectification work including evidence of work undertaken in accordance with the timeframes set out in the undertaking.
The scheme participant undertakes to arrange for an accredited installer to re-inspect the solar PV systems identified by the Clean Energy Regulator, to ensure they comply with Clean Energy Council guidelines and all state and local requirements.
The scheme participant undertakes to obtain and resubmit to the Clean Energy Regulator correct eligible interest holder consent forms for the relevant projects and review internal records management procedures.
The scheme participant undertakes to submit and complete a schedule of technical works to resolve the issues regarding measurements of flow and concentration which resulted in reporting that was non-compliant.
The Clean Energy Regulator will only accept an enforceable undertaking if the scheme participant makes a commitment to stop the conduct or non-compliance in question, and not recommence it.
Under the CFI Act and REE Act, the Clean Energy Regulator is legally obliged to publish the undertaking on its
website while under the NGER Act we may publish the undertaking. We will not enter into an enforceable undertaking on the basis that its terms or parties will be confidential and will make the whole enforceable undertaking available for public inspection.
We believe there is significant public interest in ensuring scheme participants are aware of, and informed about, enforcement action that we take since such transparency educates scheme participants of their obligations and promotes deterrence.
A scheme participant cannot withdraw or vary an undertaking without the Clean Energy Regulator’s consent.
We will only consider a request to vary an enforceable undertaking if:
Monitoring compliance with undertakings is central to the credibility of them. Depending on the undertaking requirements, scheme participants should expect to monitor and report to the Clean Energy Regulator on compliance with it. The scheme participant must proactively provide us with timely updates on the progress of the undertaking in line with the requirements of it.
Monitoring and reporting will usually occur through a compliance monitoring plan as part of the undertaking and may include the provision of evidence of implementation and independent compliance reports being provided to the Clean Energy Regulator.
When the Clean Energy Regulator is satisfied that all the elements of the undertaking are complete, a letter will be sent to the scheme participant advising that the undertaking has been completed and the public register of undertakings has been updated.
We expect the scheme participant to maintain high levels of compliance once an undertaking is completed. Scheme participants can expect us to take stronger regulatory action in line with our
Compliance policy for education, monitoring and enforcement activities if further non-compliance occurs.
If the Clean Energy Regulator has reason to believe a scheme participant has not complied with a term of an enforceable undertaking, depending on the circumstances and our concerns we will contact the participant to understand why the undertaking is not being complied with. Following this, we may undertake further regulatory actions including, but not limited to, applying to the court to enforce the undertaking and make any other appropriate order. We may also increase scrutiny of applications for benefits (e.g. small-scale technology certificates, large-scale generation certificates, Australian carbon credit units), suspension, removal from scheme, civil or criminal prosecution. Typically, court action will be pursued where the breach is significant, or involves a failure to perform an obligation by a certain time.
The court can:
If the scheme participant does not comply with the court order they will be in contempt of court.
The Clean Energy Regulator is committed to administering the climate change laws in a transparent, ethical and accountable manner. As part of this, we regularly review the content and implementation of this policy to ensure all relevant operational experience and legislative amendments are incorporated.
Where amendments to this policy are required, the updated policy can be found on our
Any queries regarding enforceable undertakings can be directed to
1300 553 542.
documentasset:Compliance for enforceable undertakings is available as a downloadable document.
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