Federal Register of Legislation - Australian Government

Primary content

A Bill for an Act to deal with consequential and transitional matters arising from the enactment of the Petroleum and Other Fuels Reporting Act 2017, and for related purposes
Administered by: Environment and Energy
For authoritative information on the progress of bills and on amendments proposed to them, please see the House of Representatives Votes and Proceedings, and the Journals of the Senate as available on the Parliament House website.
Registered 30 Mar 2017
Introduced HR 30 Mar 2017

2016-2017

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

PETROLEUM AND OTHER FUELS REPORTING BILL 2017

 

PETROLEUM AND OTHER FUELS REPORTING (CONSEQUENTIAL AMENDMENTS AND TRANSITIONAL PROVISIONS) BILL 2017

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for the Environment and Energy, the Hon Josh Frydenberg MP)

 

 

 

 

 

PETROLEUM AND OTHER FUELS REPORTING BILL 2017

 

PETROLEUM AND OTHER FUELS REPORTING (CONSEQUENTIAL AMENDMENTS AND TRANSITIONAL PROVISIONS) BILL 2017

OUTLINE

The Petroleum and Other Fuels Reporting Bill 2017 (the Bill) establishes a mandatory reporting regime for fuel information. The information collected under mandatory reporting will be used to monitor energy security, facilitate compliance with international reporting and stockholding obligations, and enable the publication of aggregate fuel statistics for the use of business, investors, academics and government.

The Australian Government has produced statistics on fuel for over forty years through a voluntary survey of business. The statistics derived from the information reported by businesses are released in a range of government publications, the most notable of which is the Australian Petroleum Statistics (APS). The APS contains detailed monthly statistics on the production, refining, wholesaling and end-of-month stock levels of petroleum (crude oil and derivatives such as gasoline and diesel), petroleum‑related products such as lubricants, bitumen and paraffin wax, and alternative fuels like ethanol, biodiesel and gaseous transport fuels like compressed natural gas. In recent years the proportion of the fuel market participating in the survey has declined, reducing the reliability of the resulting statistics. Mandatory reporting will enable the development of more accurate, reliable and informative statistics on petroleum, other fuels and fuel-related products.

Mandatory reporting of petroleum and other fuels forms part of the Australian Government’s plan to return to compliance with the International Energy Agency (IEA) obligation to hold oil stocks equivalent to 90 days of the previous year’s average daily net oil imports. The capturing of all IEA relevant stock under mandatory reporting will ensure an accurate picture of Australia’s stockholding position can be determined. The introduction of mandatory reporting also implements a major recommendation of the Senate References Committee on Rural and Regional Affairs and Transport in 2015.

The Bill empowers the Minister for the Environment and Energy (the Minister) to require persons specified in the Ministerial Rules (the Rules) to report prescribed information to the Secretary of the Department of the Environment and Energy (the Department). The Bill empowers the Secretary of the Department to collect, record, use and disclose this information, or statistics developed from it, in certain circumstances. The Bill provides a range of safeguards to ensure that personal and commercial‑in‑confidence information is protected.

The Bill provides the Minister with wide-ranging powers to designate certain activities, fuels and fuel‑related products as reportable. The scope to add additional activities and products is required to ensure the statistics remain relevant as consumer preferences change and technology continues to advance, such as hydrogen fuel cells and battery powered cars. The Minister also has the power to relax the reporting requirements, for example where data‑sharing between government agencies removes the need to collect information directly.

The Petroleum and Other Fuels Reporting (Consequential Amendments and Transitional Provisions) Bill 2017 enables the Australian Competition and Consumer Commission and the Australian Taxation Office to share information with the Department. This will assist to reduce the reporting burden associated with mandatory reporting.

Financial impact statement

The Government provided funding of $1.9 million over the forward estimates for the establishment of mandatory reporting of petroleum, other fuel and fuel‑related statistics in the 2016-17 Budget. The ongoing production of fuel statistics will be funded from the Department’s existing budgetary allocation.

 


 

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Petroleum and Other Fuels Reporting Bill 2017

Petroleum and Other Fuels Reporting (Consequential Amendments and Transitional Provisions) Bill 2017

 

These Bills are compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of
the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Petroleum and Other Fuels Reporting Bill 2017

Overview of the Bill

The Petroleum and Other Fuels Reporting Bill 2017 (the Bill) would establish a mandatory reporting regime to enable the production of statistics on petroleum, other fuels such as biofuels, and fuel-related products.

The Australian Government has published statistics on petroleum, other fuels and fuel-related products for over forty years. These statistics are used by government agencies, businesses and international organisations to monitor, analyse and forecast trends in the fuel market. In recent years, the proportion of businesses participating in the voluntary survey used to compile the statistics has declined, reducing the reliability and usefulness of the statistics. This has increased the risks for business associated with new investments, reduced the capacity of agencies to monitor energy security, and decreased Australia’s capacity to demonstrate compliance with the International Energy Agency’s oil stockholding obligation.

The Bill empowers the Minister for the Environment and Energy to require persons to report fuel information to the Secretary of the Department of the Environment and Energy (the Department). The specifics of the reporting requirement would be set out in Ministerial Rules.

The Bill provides a range of safeguards to ensure that personal and commercial‑in‑confidence information provided to the Secretary is protected. This includes a prohibition on the recording, use or disclosure of such information. If this prohibition is breached, a penalty of up to two years imprisonment may apply to Departmental employees, consultants and contractors. The Bill provides several defences and exemptions to this prohibition so that appropriate and authorised recording, use and disclosure of protected information can take place.

Human rights implications

This Bill engages the following rights:

·         Right to Privacy under Article 17 of the International Covenant on Civil and Political Rights.

 

Clause 11 of the Bill empowers the Minister for the Environment and Energy to require a person to report fuel information to the Secretary. It is envisioned that some of the information required to be reported would be personal information such as the name of the person submitting the report. Failure to comply with this requirement would make a person liable for a civil penalty.

 

This collection of personal information is necessary to ensure the orderly operation of the legislative scheme, including its enforcement, so that the public benefits of the scheme can be realised.

 

The Bill provides a range of protections for personal information to ensure that information collected under the mandatory reporting requirement is used appropriately and not disclosed for purposes unrelated to its collection.

 

·         Right to Freedom of Expression under Article 19 of the International Covenant on Civil and Political Rights.

 

To protect personal and commercial‑in‑confidence information collected under mandatory reporting, clause 20 of the Bill prohibits the recording, use and disclosure of this information by employees, contractors or consultants engaged by the Department unless it is authorised by law. It is important to note that clauses 20 to 30 contain a number of authorisations to enable the orderly operation of the reporting and publication regime. This includes subclause 20(4) which makes clear that the prohibition does not apply to disclosures which fall within the constitutional doctrine of implied freedom of political communication.

 

Unauthorised use, recording or disclosure of protected information by Departmental employees, contractors or consultants (including those who have ceased their employment or engagement) would be a criminal offence punishable by up to two years imprisonment.

 

The Secretary is also granted a discretionary power under clauses 24 and 30 to impose conditions on other entities when he or she discloses information to them. It is envisioned that the Secretary would, in certain circumstances, use this power to prohibit further recording, use or disclosure of protected information. It would also be a criminal offence punishable by up to two years imprisonment to breach a condition imposed by the Secretary under clauses 24 and 30.

 

The restrictions on record-making, publication and disclosure engage the right to freedom of expression in Article 19 of the International Covenant on Civil and Political Rights. Article 19 permits restrictions on freedom of expression as provided by law when necessary to protect public order, which includes the protection of confidential information. The restrictions on record-making, publication and disclosure are compatible with the Article as they are required to ensure that persons required to report under this Bill can be confident that their sensitive information will be protected and treated appropriately when it is used by the Department or another entity.

 

·         Right to the Presumption of Innocence under Article 14(2) of the International Covenant on Civil and Political Rights.

 

To protect personal and commercial-in-confidence information collected under mandatory reporting, clause 20 of the Bill prohibits the recording, use and disclosure of this information by employees, contractors or consultants engaged by the Department unless it is authorised by law. A breach of clause 20 is a criminal offence punishable by up to two years imprisonment.

Subclause 20(2) would provide a defence to the offence in clause 20 where a person records, uses or discloses protected information if the conduct is authorised or in compliance with a requirement under a Commonwealth, state or territory law. Subclause 20(3) would provide a defence to the offence in clause 20 where a person records, uses or discloses commercial‑in‑confidence information if the person did not know the information was commercial‑in‑confidence.

 

The defendant would bear the evidentiary burden of proving that the elements of subclause 20(2) or 20(3) are satisfied. This is a reversal of the onus of proof. The Attorney-General’s Department’s Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers provides that a matter should only be included in an offence-specific defence, as opposed to being specified as an element of the offence, where the matter is peculiarly within the knowledge of the defendant and it would be significantly more difficult and costly for the prosecution to disprove than for the defendant to establish the matter.

 

In the case of subclause 20(2), it would be significantly more difficult and costly for the prosecution to disprove than for the defendant to establish the matter. This is because it would require the prosecution to prove that no Commonwealth, state or territory law authorised the disclosure. The defendant in contrast would only be required to point to the specific law which they relied upon as authorisation for their conduct.

 

In the case of subclause 20(3), whether the defendant was aware that the information was commercial‑in‑confidence is a matter that is peculiarly within the knowledge of the defendant and it would be significantly more difficult and costly for the prosecution to prove the defendant’s state of mind.

 

Petroleum and Other Fuels Reporting (Consequential Amendments and Transitional Provisions) Bill 2017

The Petroleum and Other Fuels Reporting (Consequential Amendments and Transitional Provisions) Bill 2017 (the Consequential Amendments) would enable the Australian Competition and Consumer Commission (ACCC) and the Australian Taxation Office (ATO) to share information with the Department. This information would be used to compile statistics instead of requiring companies to re-report the information to the Department. This will reduce the regulatory burden associated with mandatory reporting. The shared information could also be used to monitor compliance with the reporting obligation contained at section 11 of the Bill. For example, a company paying excise on transport fuels would generally be expected to also report wholesaling under the reporting obligation in the Bill.

The information shared by the ACCC and ATO with the Department could be personal or commercial‑in‑confidence information, and would be used for the same purposes and subject to the same protections as protected information obtained directly from businesses. Therefore, the analysis in relation to the engagement and limitation of human rights for the Bill is also relevant to the Consequential Amendments.

 

Conclusion

The Bills are compatible with human rights because to the extent that they may limit human rights, those limitations are reasonable, necessary and proportionate.


 

PETROLEUM AND OTHER FUELS REPORTING BILL 2017

NOTES ON CLAUSES

Part 1 – Preliminary

Clause 1 – Short title

1.                  This clause would provide for the Bill, when enacted, to be cited as the Petroleum and Other Fuels Reporting Act 2017.

Clause 2 – Commencement

2.                  This clause would provide that the Bill commences one day after it receives Royal Assent.

3.                  Clause 3 of the Petroleum and Other Fuels Reporting (Consequential Amendments and Transitional Provisions) Bill 2017 provides that the obligation to report information under clause 11 will commence on 1 January 2018 or the day that the rules made under clause 41 of the Bill commence. It is anticipated that the report for the month of January will be due by the end of 15 February 2018.

Clause 3 – Objects of this Act

4.                  This clause would provide that there are three objectives of the Act.

5.                  The first objective is to help the Australian Government monitor fuel security, and in particular to assist agencies prevent and mitigate fuel supply disruptions.

6.                  The statistics and other information developed from mandatory reporting would be used by a range of agencies to monitor, evaluate and enhance fuel security. It is envisioned that the primary user of the data will be the Energy Security Office in the Department of the Environment and Energy (the Department), but other agencies would use the information, including the Bureau of Infrastructure, Transport and Regional Economics and the Australian Bureau of Statistics (ABS).

7.                  The second objective is to assist the Australian Government to meet Australia’s international obligations.

8.                  Australia is a signatory to the Agreement on an International Energy Program (the Agreement). Under Article 27 of the Agreement, members are required to provide information on the activities of fuel companies to the International Energy Agency (IEA) Secretariat. The IEA Secretariat uses this information to monitor the market and prepare statistics such as those in the IEA World Energy Outlook. This helps to increase transparency in international markets. Article 2 of the Agreement requires IEA members to maintain fuel stocks equivalent to 90 days of average daily net oil imports. Applying mandatory reporting to these fuel stocks to ensure they are fully reported will help Australia to comply with the IEA stockholding obligation.

9.                  A range of other international organisations are active on the topics of energy security and market transparency, including the International Energy Forum; the G20 Energy Sustainability Working Group; and the Asia Pacific Economic Cooperation Energy Working Group. The reference to any other international agreement is intended to capture these organisations and any others that Australia may agree to provide data to in the future.

10.              The final objective is to enable information on Australia’s petroleum and other fuel markets to be provided to the public by the Australian Government.

11.              The Australian Government publishes a range of information on activity in the fuel and fuel-related markets. The key publication that would use the information obtained under mandatory reporting is the Australian Petroleum Statistics (APS). The APS has been published for over forty years and provides a range of information and statistics on the production, refining, import, export, consumption, storage and price of transport fuels, other fuels and fuel-related products such as bitumen and petroleum‑based solvents. Another publication which would draw upon the information collected under mandatory reporting is the Energy and Resources Quarterly published by the Department of Industry, Innovation and Science.

12.              The publication of fuel information helps the market operate efficiently. During consultation, stakeholders advised the Department that they regularly use the APS to evaluate business performance, identify emerging trends and prioritise future investment. These stakeholders also made clear that the decline in coverage and reliability of the APS due to non-reporting was reducing its usefulness. As a result, there is strong support from many businesses for the introduction of a mandatory reporting requirement.

Clause 4 – Simplified outline of this Act

13.              The simplified outline of the Bill provided here is intended to assist readers to understand the substantive provisions. The outline is not intended to be comprehensive. Readers should rely on the substantive provisions to understand the operation of the legislative scheme. 

Clause 5 – Definitions

14.              This clause would provide definitions of certain terms to support the operation of the legislation.

15.              These definitions are discussed in this explanatory memorandum where they are relevant to explaining the operation of specific clauses.

Clause 6 – Meaning of commercial-in-confidence

16.              Clause 6 would provide a definition of commercial-in-confidence. The concept of commercial-in-confidence is relevant to the definition of protected information in clause 5, the Secretary’s power to publish fuel information in clause 16, and the offence provision for the unauthorised recording, use or disclosure of protected information in clause 20.

17.              This clause would provide that information is commercial‑in‑confidence if the Secretary is satisfied that:

·         the release of the information would cause a competitive detriment to the person;

·         the information is not subject to an obligation to disclose under another law; and

·         the information is not in the public domain or otherwise easy to determine.

18.              This definition is intended to capture commercially sensitive information obtained under the legislative scheme, including through the reporting obligation in clause 11 or through a data-sharing arrangement such as that enabled by clause 31.

19.              Generally, it is envisioned that no competitive detriment would result from the disclosure of aggregate statistics, such as statistics on the monthly production of crude oil in Western Australia or the wholesale volumes for premium unleaded petrol in Queensland. However, where aggregate statistics are developed from three or fewer businesses it may be that the statistics or information derived from the statistics could be commercial‑in‑confidence. For example, if there is only one wholesaler of a covered product in Tasmania, the Secretary may be satisfied that an aggregate statistic on the wholesaling of this product in that state would be commercial‑in‑confidence, subject to the other elements of the test also being satisfied.

20.              The power to determine whether information is commercial-in-confidence resides with the Secretary and is capable of delegation to another SES officer under clause 39. This is to ensure certainty given the serious penalties that apply to an unauthorised disclosure of protected information. In determining whether particular information is commercial‑in‑confidence, the Secretary may seek and take into account the views of businesses to which the information relates about whether the release of the information would cause competitive detriment.

21.              There is no need for businesses to notify the Secretary where they believe that information they are providing is commercial-in-confidence to enjoy the protections provided by the Bill. It is envisioned that the Secretary would formulate general policies to guide decisions about whether information collected in reporting templates is commercial‑in‑confidence. The Department would make these policies available to affected businesses.

22.              It is also important to note that the protections for commercial‑in‑confidence information in this Bill would apply in addition to existing policies and practices in the Department. The APS has been published for over forty years and the protections in this Bill are intended to complement rather than replace the wide range of processes already in place to protect sensitive information obtained from reporting businesses.

Clause 7 – Act binds the Crown

23.              This clause would provide that the Bill binds the Crown in any capacity, but does not make the Crown liable for any penalty if it fails to comply with the reporting obligation.

Clause 8 – Offshore areas

24.              This clause would provide that a reference to Australia extends beyond the territorial sea and up to 200 nautical miles from the territorial sea baseline, subject to factors such as there being a physical continental shelf beyond 200 nautical miles, and any maritime boundaries with other states. This extension is limited to the extent that such a reference is in relation to, or otherwise connected with, the exploitation of resources on the continental shelf such as crude oil. This aligns with the rights of coastal states under Article 77 of the United Nations Convention on the Law of the Sea

25.              The express application to offshore areas is intended to make clear that activities such as offshore oil production are intended to be subject to mandatory reporting. This production is relevant for IEA reporting purposes.

Clause 9 – Concurrent operation of state and territory laws

26.              This clause would provide that state and territory laws that are not directly inconsistent with the provisions of this Bill continue to operate.

27.              Some states and territories operate their own mandatory reporting schemes for fuel information. It is not the intention of this Bill to invalidate these schemes.

28.              The Department is working with some states and territories to explore opportunities for data-sharing. This would see information collected under state and territory reporting schemes shared with the Department. It is envisioned that where data-sharing took place between the Commonwealth and another jurisdiction, the Minister would consider providing an exemption so that relevant businesses do not have to re-report the information to the Department.

Part 2 – Reports of fuel information

Clause 10 – Simplified outline of this Part

29.              The simplified outline provided here is intended to assist readers to understand the substantive provisions. The outline is not comprehensive and readers should rely on the substantive provisions to understand the operation of Part 2.

Clause 11 – Reports of fuel information to be given to the Secretary

30.              This clause would create a reporting obligation for persons prescribed by the Rules to report specified information in relation to the carrying out of covered activities concerning covered products where the activity is undertaken by a regulated entity (noting the extension of this reference in clause 12) in Australia or in connection with a business in Australia.

31.              The following explains these concepts in more detail.

Regulated entities

32.              The meaning of regulated entity would be defined in clause 5. The definition aligns with the constitutional ambit of the reporting obligation. Readers should note that clause 12 would extend the application of the reporting obligation in clause 11.

Person specified in the Rules

33.              Subclause 11(2) makes clear that the report on a covered activity in relation to a covered product undertaken by a regulated entity (as extended by clause 12) must be given by the person specified in the Rules.

34.              It is envisioned that the person specified in the Rules will generally be the owner of the covered product. In most cases, the owner would also be the regulated entity. However, the Minister would be able to specify a person other than the owner of the covered product to ensure that the reporting obligation can be tailored to the most appropriate person in all the circumstances. For example, if it became apparent that for a particular class of covered product that the relevant information was held by someone other than the owner, the Minister would be able to place the reporting obligation on the more relevant party.

35.              The person specified in the Rules would not be required to personally submit the required report. For example, an agent could submit the report on the specified person’s behalf. However, the use of an agent to compile and/or submit a report would not relieve the person who is specified in the Rules of the obligation to ensure that a complete report is lodged and accurate.

Covered Activities

36.              Covered activities would be defined in clause 5. This definition provides that the covered activities are:

·         producing a covered product;

·         refining a covered product;

·         wholesaling a covered product;

·         holding stock of a covered product;

·         importing a covered product;

·         exporting a covered product; and

·         any other activity, in relation to a covered product, prescribed by the Rules for the purposes of this paragraph.

37.              It is important to note that some covered activities may ultimately not be the subject of a reporting obligation. For example, the Rules are anticipated to exempt the importing and exporting of a covered product from the reporting obligation. This is because the statistical information required to meet the objectives of this Bill in relation to those activities may instead be obtained under data‑sharing arrangements with the ABS and Department of Immigration and Border Protection (DIBP).

38.              Clause 5 would provide definitions of producing, refining, wholesaling and holding stock of a covered product. These definitions have been provided to ensure certainty and address possible differences between the meaning of the terms for the purposes of this Bill and their common understanding.

39.              Producing would be defined in clause 5. The definition is intended to cover the extraction of products such as crude oil, condensate and natural gas liquids from an underground reservoir. The definition is also intended to cover the manufacture of products such as ethanol and biodiesel (both types of biofuel) from biomass.

40.              Refining would be defined in clause 5. The definition is intended to cover the activities commonly associated with an oil refinery where a range of fuels such as crude oil are turned into other products such as diesel, gasoline and bitumen through the refining process. The definition is also intended to cover re-refining and recycling processes where waste products such as used grease and lubricant are processed to enable them to be reused or burned as a fuel. 

41.              Wholesaling would be defined in clause 5. The definition is tied to the payment of excise or customs duty for transport fuels and products covered by the Product Stewardship for Oil Program. For other products, the equivalent action to incurring an excise payment obligation is provided. The IEA requires Australia to report when fuel and fuel‑related products are made available for consumption by consumers. To develop an effective and workable definition, the Department consulted with wholesaling businesses on a number of potential approaches to determining when this occurs. Industry supported aligning wholesales reporting with the point when excise or customs duty becomes payable. In general, this is when fuel is removed from a bonded import warehouse or domestic refinery.

42.              The definition of wholesaling would enable the Minister to designate in the Rules another point for the reporting of wholesales for a particular product. This is designed to enable products to be accommodated in cases where the default approach is inappropriate.

43.              Holding stock would be defined in clause 5. The definition is intended to capture stock relevant to energy security monitoring, whether the stock is located in Australia or elsewhere, and whether it is owned directly or there is a right to acquire the stock.

44.              The definition of holding stock in clause 5 makes reference to stocks that are not to be counted, such as stocks in service stations (the regulatory burden associated with this level of reporting would be significant) and also makes clear that the obligation to report stocks would not apply to covered products held by individuals for their own use.

45.              A contractual right to acquire stock is intended to capture arrangements such as:

·         Stock held in a storage facility outside Australia which is destined for import to Australia under a contract.

·         Stock held in an oil tanker in transit to Australia where the stock is under contract to be delivered to an Australian business.

·         International oil tickets, under which a company in one country holds a contractual right (but not obligation) to purchase oil owned by a different company in another country within a particular period (such as three months).

The Department is consulting with industry to determine the exact conditions when it is appropriate that such contractual rights should be reported. As a result, the Bill provides that the Rules will set out the specific circumstances in which such contractual rights will constitute holding stock.

46.              The exclusion of stocks for private or domestic use from the definition of holding stock is not intended to cover stocks held for commercial use. For example, if a mining company imported diesel from an overseas supplier to use in its own operations, it would be required to report the stock that remained in storage at the end of the month.

47.              The power for the Minister to prescribe additional covered activities has been provided to ensure that relevant activities can be added. It would allow the Minister to add an activity as a covered activity if an unspecified activity became relevant to energy security monitoring, an international reporting obligation or the effective operation of the market in the future.

48.              It is envisioned that Rules specifying additional covered activities would only be made following appropriate consultation.

49.              Operating a fuel storage terminal has been identified as a possibility for being added through the Rules. The Australian Competition and Consumer Commission (ACCC) collects information on the ownership, operation, capacity and throughput (flow of product) of oil storage facilities such as import and distribution terminals. This information is highly valuable as a tool for validating statistics in the APS and monitoring energy security. The consequential amendments proposed alongside this Bill would empower the ACCC to share this information with the Department. As the Department and ACCC, in consultation with industry, are still developing the specifics of the information that could be shared and under what conditions, this activity has not been listed as a covered activity in the Bill.   

Covered products

50.              Covered products would be defined in clause 5. This definition provides that the covered products are:

·         crude oil;

·         condensate;

·         liquefied petroleum gas;

·         natural gas liquid;

·         gasoline;

·         diesel;

·         kerosene;

·         fuel oil;

·         heating oil;

·         naphtha;

·         compressed natural gas;

·         liquefied natural gas;

·         an oil, lubricant or grease;

·         paraffin wax;

·         a petroleum based solvent;

·         petroleum coke;

·         bitumen;

·         biofuel;

·         hydrogen;

·         any other fuel prescribed by the rules for the purposes of this paragraph; and

·         any other fuel-related product prescribed by the rules for the purposes of this paragraph.

51.              With the exception of compressed natural gas and liquefied natural gas, all the products listed in the definition of covered product in clause 5 count towards compliance with the IEA oil stockholding obligation.

52.              Compressed natural gas and liquefied natural gas are listed as covered products, however, it is envisioned that data-sharing could enable an exemption from reporting on these products, to be provided in the Rules. Information on the production, storage and wholesale of these products is collected by several government agencies. For example, the Australian Taxation Office (ATO) collects information on these products when they are used as a transport fuel and the West Australian Department of Mines and Petroleum collects some production and storage data. It is therefore envisioned that these products may be the subject of a Rule to create an exemption from the reporting obligation. Any such exemption might be removed in the future. This might be appropriate, for example, if gaseous transport fuels became a larger proportion of the transport fuel market or if industry supported a mandatory reporting requirement to improve the statistics.

53.              The Minister would be provided with the power to add additional covered products through the Rules.

54.              The power to add additional covered products through the Rules is necessary to ensure mandatory reporting can continue to capture all products relevant to Australia’s energy security, compliance with international obligations and the information needs of the market. More fuels or fuel‑related products may need to be covered products in the future as technology and consumer preferences change. For example, since the Agreement commenced a range of fuels, such as liquefied petroleum gas (LPG), ethanol, biodiesel and hydrogen, have been added by the IEA to countries’ monthly reporting requirements.

55.              The power of the Minister to add additional products would be limited by subclauses 5(2) and 5(3). To add a fuel as a covered product, the Minister must be satisfied that doing so is in accordance with one or more of the purposes of this Bill, namely energy security, compliance with international obligations or providing useful information to business. To add a fuel-related product as a covered product the Minister must be satisfied that doing so is in accordance with the Agreement or another international obligation.

56.              The covered products are not defined in the Bill. It is envisioned that the Department will provide detailed guidance on the meaning of each covered product to help new reporters understand their meaning before the commencement of mandatory reporting, which is scheduled for 1 January 2018. It is envisioned that this guidance would be developed in consultation with reporters and draw upon existing definitions familiar to industry. For example, tariff code numbers and definitions published by the IEA and United States Energy Information Administration.

57.              This Bill is not intended to limit in any way the Secretary’s capacity to collect information on products that are not covered products.

Penalty for non-reporting

58.              Subclause 11(2) provides that the failure to provide a report (in part or in full) in accordance with clause 11 would make a person liable for a civil penalty of up to 250 penalty units. Applying penalty unit values current on 1 March 2017, this equates to a maximum potential financial penalty of $45,000 for an individual and $225,000 for a corporation for a single contravention of the reporting obligation.

59.              Significant maximum penalties have been specified to provide a strong deterrent to non-compliance. Non-reporting, and non-compliant reporting, could result in inaccurate and misleading statistics that lead to inappropriate investment by business. It may also result in compliance issues for Australia’s IEA stockholding obligation.

60.              The penalty units provided in subclause 11(2) are maximum amounts. It would be open to a court to impose a civil penalty for a lesser amount if it considered it appropriate. Similarly, it would be open to the Secretary to issue an infringement notice under subclause 36 for an amount less than the maximum. For example, when determining the appropriate amount for an infringement notice the Secretary could, if he or she considered it appropriate, consider whether the non‑compliance was deliberate or inadvertent, and whether it was part of a pattern of conduct or a once-off event.

61.              The intention of subclause 11(2) is that the non-submission, late or otherwise non‑compliant submission of a report for a single reporting period would make a person liable to a penalty. Where a person did not submit a report for three reporting periods they would be liable for three separate penalties.

62.              The Criminal Code provides that it is an offence to provide false or misleading information or documents in certain circumstances. Those provisions would also apply to information submitted in compliance or purported compliance with clause 11.

Reporting process

63.              Subclause 11(3) would make clear that more than one person can be prescribed to report in relation to the same kind of covered activity and same kind of covered product.

64.              Subclause 11(4) would impose certain conditions for the submission of reports required under subclause 11(2). These include that:

·         reports must include all the fuel information for the covered activity or covered product prescribed in the Rules;

·         the prescribed information must be provided in the manner and form set by the Secretary; and

·         the prescribed information must be provided to the Secretary before the end of the period set in the Rules.

65.              Fuel information is defined in clause 5. The definition would provide that fuel information is any data, or information derived from data, that relates to a covered activity or the quantity, quality or characteristics of a covered product. It would also include any metadata, (information that describes the data) or information derived from data and contextual information that can help explain or elaborate on the data or information derived from data. The definition of fuel information is intended to be a broad definition that covers any information that is relevant to compiling statistics on fuel or fuel-related products.

66.              To illustrate how broad this term is intended to be in relation to production activity, it is intended to include the kinds of fuel information collected in the APS survey of production activity which, as at March 2017, collected the following information on the production of crude oil:

·         Production field name (location information);

·         Density of crude oil in kilograms per litre (characteristic information);

·         Volume of crude oil stored at facility at start of month (data about covered activity);

·         Volume of crude oil produced (extracted) in relevant month (data about covered activity);

·         Volume of crude oil used in operation of field and plant equipment (data about covered activity);

·         Volume of crude oil sold and dispatched from field (data about covered activity);

·         Volume of crude oil stored at facility at end of month (data about covered activity);

·         Name of data provider, usually the field manager on behalf of the owner (contextual information);

·         Relevant reporting month and year (contextual information);

·         All volumes are to be reported in kilolitres (quantity information); and

·         The pressure at which volume was determined (metadata).

67.              Fuel information would also cover information such as the capacity and throughput of fuel storage terminals, the source (refinery and port of loading) for imported fuel, and the current location and intended port of arrival for tankers transporting fuel to Australia.

68.              Subclause 11(4)(b) permits the Secretary to specify the manner and form in which reports are submitted. It is envisioned that the Secretary would specify reporting templates for covered activities and products. The use of a specific template would streamline the processing of reports by the Department by allowing for automatic extraction of reported data into the Department’s database. Currently, about 40 per cent of reporters use the Department’s preferred template and other responses must be manually entered into the system.

69.              Subclause 11(4)(c) would provide for the Rules to set a deadline for the submission of reports. It is envisioned that the reporting period prescribed in the Rules would be within 15 days after the end of the relevant month. That would mean that the report for January 2018 would be due by 15 February 2018. This would assist the Department to compile statistics for the IEA by the deadline set by the IEA Secretariat of 25 days after the end of the relevant month. The 15 day deadline also aligns with the period for reporting production data under the Offshore Petroleum and Greenhouse Gas Storage Act 2006.

70.              It is envisioned that the Minister would only require a person to report information that is either in their possession or readily discoverable. The purpose of mandatory reporting is to gather fuel information from entities best-placed to provide the specified information. The type of information that would be sought under mandatory reporting, such as monthly production and stock levels on the last day of the month, is the type of information that a business owning fuel or operating in the sector would be expected to know or be able to ascertain quickly and easily.

71.              Subclause 11(5) would make clear that the Rules may prescribe different reporting requirements for different covered activities, covered products and persons. This is required to ensure that the reporting requirements can be tailored to achieving the objects of the Act efficiently and with the minimum necessary burden.

72.              Subclause 11(6) would permit the Secretary to require reports be submitted electronically or in another format. The Secretary may also set different templates for different regulated entities, covered activities or covered products, and set one template for more than one activity, product or reporting period. This will enable the reporting templates to be tailored to the requirements applying to different activities, products and persons. It is envisioned that the reporting templates will be developed in consultation with reporting businesses over 2017 and then be regularly reviewed to ensure that the reporting burden on business and the processing burden on the Department is minimised.

73.              Subclause 11(7) would provide for the Rules to prescribe different reporting periods for different covered activities, covered products and regulated entities. This is required to enable reduced reporting frequency or longer reporting deadlines to be provided where it is appropriate. It is anticipated that the reporting deadline will generally be 15 days from the end of the relevant month. However, a reduced reporting frequency could be provided for some covered products. For example, the Department is consulting with stakeholders to determine whether a reduced reporting requirement, such as six monthly or annual reporting, would be appropriate for petroleum coke.

74.              The flexibility provided to the Secretary to set the manner and form of reporting in subclauses 11(3) – 11(7) is intended to help the Secretary refine the reporting process over time to minimise the reporting burden on business and the administrative burden on the Department. Mandatory reporting would impose a regulatory burden on business, since information would need to be collected, verified and reported. Consultation has identified that for most companies the cost associated with mandatory reporting will be low as they already report voluntarily and/or the required information is already in their possession and can be easily extracted and submitted. However, some companies may need to update their information systems or change the timing and ambit of their information collection processes to meet the reporting requirements under the legislative scheme. This would impose costs on these businesses. The powers granted to the Secretary would help to ensure the regulatory burden associated with reporting can be minimised.

75.              Subclause 11(8) would clarify that subclauses 11(5), 11(6) and 11(7) do not limit the application of subsection 33(3A) of the Acts Interpretation Act 1901.

76.              Subclause 11(9) would clarify the geographical application of importing and exporting which are covered activities. Importing a covered product into Australia would be considered to have been undertaken in Australia for the purposes of subclause 11(1)(c)(i). Exporting a covered product from Australia would be considered to have been undertaken in Australia for the purposes of subclause 11(1)(c)(i).

Clause 12 – Extended application of clause 11

77.              This clause would extend the application of clause 11 where a covered activity in relation to a covered product is undertaken by an entity that it is not a regulated entity. It is intended to ensure that the purposes of the Bill can be met so far as possible in all relevant circumstances.

Clause 13 – Exemption to duty to report

78.              This clause would permit exemptions from the duty to report to be provided in the Rules, and by the Secretary.

79.              Subclause 13(1) would provide for the Rules to prescribe exemptions.

80.              It is envisioned that some covered products and covered activities would, through the Rules, be exempted in full or in part from the reporting requirement under subclause 11(2). For example:

·         An exemption could be provided in relation to the reporting of imports and exports, as the required information could be obtained efficiently through data-sharing with the DIBP and the ABS.

·         A full or partial exemption could be provided in relation to the reporting of production information by some entities, as much, but not necessarily all, of the required information could be obtained efficiently through data-sharing with agencies such as the National Offshore Petroleum Titles Administrator (for offshore production data) and the Western Australian Department of Mines and Petroleum, South Australian Department of State Development, and the Northern Territory Department of Primary Industries and Resources (for onshore production data).

The Department is consulting with these agencies on the potential establishment of data-sharing arrangements that would provide a basis for Rules to exempt businesses from having to re-report this information to the Secretary.

81.              The exemption mechanism in the Rules provides an administratively efficient way to tailor reporting obligations and minimise regulatory burden as data-sharing arrangements are developed and refined. 

82.              Subclause 13(2) would require the Rules to prescribe thresholds and circumstances in which those thresholds would result in exemption from the reporting obligation. This is intended to allow for minimisation of the regulatory burden imposed by the scheme, such as by ensuring that the holding of inconsequential volumes of covered products does not attract reporting obligations. During consultation, a minimum threshold of three kilotonnes per annum was supported by stakeholders. If such a threshold was prescribed in the Rules, this would equate to a reporting threshold of approximately 21,500 barrels of crude oil production in a year or wholesaling 4,100,000 litres of regular unleaded petrol in a year. The threshold would be set in the Rules to enable it to be adjusted if it is found to be too high or low for particular activities or products.

83.              Subclause 13(3) would empower the Secretary to provide a person with an exemption from the obligation to report in relation to a particular kind of covered activity and a particular kind of covered product where the Secretary is satisfied that it is appropriate to do so in all the circumstances.

84.              The Minister would under subclause 13(1) have a general power to make Rules to exempt classes of persons, activities and products, so the Secretary’s power is intended to be used in time-limited, one-off circumstances that could not be readily predicted or are not as appropriate to deal with through a general exemption in the Rules. For example:

·         where a business experiences a system failure that wipes its records and so is unable to meet the reporting obligation in a particular month; or

·         where a small business loses a key member of staff who compiles their reports due to illness and cannot replace their expertise before the due date for reports.  

85.              The Secretary’s power under proposed subclause 13(2), to determine that the reporting obligation in subclause 11(2) does not apply to a particular person, would not be subject to merits review. The power to make a determination is discretionary and intended to be used exceptionally, in circumstances where it is not appropriate to require the person to report, such as where the person’s ability to report is frustrated due to circumstances beyond their control (noting that the Bill does not provide for extensions of time to report, as late-reported statistics would not be of any utility for the periodic reporting to the IEA or to the public through the APS). Further, the short timeframe for reporting after the end of the relevant month would mean that in most cases it would not be possible to complete a merits review process before the civil penalty liability under subclause 11(2) would be triggered. This is a basis for exempting a decision from merits review that is recognised in the Administrative Review Council’s publication What decisions should be subject to merit review? In addition, in cases where a determination is not made and a civil penalty infringement notice is issued due to a failure to report, there are avenues to seek withdrawal of the notice in accordance with the Regulatory Powers (Standard Provisions) Act 2014. It is therefore not considered appropriate to provide for merits review of the exercise of the power under subclause 13(2).

Part 3 – Collection and publication of fuel information

Clause 14 – Simplified outline of this part

86.              The simplified outline provided here is intended to assist readers to understand the substantive provisions. The outline is not comprehensive and readers should rely on the substantive provisions to understand the operation of Part 3.

Clause 15 – Collection of fuel information

87.              Clause 15 would make it clear, for the purposes of the legislative scheme and other Commonwealth legislation (such as the Privacy Act 1988), that it is a statutory function of the Secretary to collect fuel information.

88.              Fuel information would be defined in clause 5, which is discussed above, including in the discussion on clause 11.

Clause 16 – Publication of fuel information

89.              Clause 16 would provide the Secretary with the power to direct the publication, and release by other means, of fuel information by entrusted persons in any manner he or she sees fit. This power would apply to both statistical and non-statistical fuel information.

90.              The reference to non-statistical fuel information in subclause 16(2) is intended to make clear that the Secretary may publish information derived from or incorporating aggregate statistics. For example, a graph of the changes in consumption of gasoline over time with explanatory commentary or a summary of the cyclical changes in stock levels that occur over a calendar year could include both statistical and non‑statistical information. It is important to note that both statistical and non-statistical information can only be made available under subclauses 16(1) and 16(2) if the disclosure complies with subclause 16(3).

91.              It is envisioned that the Secretary would initially maintain the existing approach to publication for the APS which includes both statistics and non-statistical information. However, there may be minor changes to the APS to incorporate stakeholder feedback and the additional information captured by mandatory reporting. Over time, the manner of publication for the APS may change and other publications could be developed. It is envisioned that new publications could be developed if the data needs of business, government agencies or other users changed in the future. 

92.              Subclause 16(3) would limit the Secretary’s power to release fuel information. It prohibits the Secretary from making available through publication or any other process any information that is likely to enable the identification of a person or is commercial‑in‑confidence. Commercial‑in‑confidence is defined at clause 6. This restriction accords with the Department’s existing publication policy for the APS.

93.              This restriction on publication applies to statistical information as it may be possible in certain circumstances to ascertain commercial‑in‑confidence information from statistics. For example, where there are three or fewer reporters for a covered product in a market, one reporter might be able to determine commercial‑in‑confidence information about its competitors from the statistics. It is envisioned that where information cannot be published due to this clause, the information would be aggregated with other fuel information (such as another covered product) before publication. This would protect the commercial‑in‑confidence information whilst allowing publication.

94.              A range of additional restrictions and authorisations for the collection, recording, use and disclosure of protected information is provided in Part 4 of the Bill.

Clause 17 – Severability – publication of fuel information

95.              This clause would extend the application of clause 16 to the publication of non‑statistical fuel information in certain circumstances. It is intended to ensure that the purposes of the Bill can be met so far as possible in all relevant circumstances.

Clause 18 – Other powers or functions not affected

96.              Clause 18 would make clear that clause 16 does not limit the existing powers of the Secretary to collect, publish or otherwise deal with fuel information.

Part 4 – Secrecy

Division 1 – Introduction

Clause 19 – Simplified outline of the Part

97.              The simplified outline provided here is intended to assist readers to understand the substantive provisions. The outline is not comprehensive and readers should rely on the substantive provisions to understand the operation of Part 4.

Division 2 – Secrecy

Clause 20 – Secrecy

98.              This clause would provide that it is a criminal offence for an entrusted person or former entrusted person to make a record, use or disclose protected information if that information was obtained in their capacity as an entrusted person.

99.              A penalty of up to two years imprisonment is provided for this offence.

100.          During consultation, businesses potentially liable to report under mandatory reporting made clear to the Department that the legislation needed to ensure that commercially sensitive information was properly protected and the capacity of Departmental employees to disclose commercially sensitive information was limited to where it was appropriate. Clause 20 has been drafted to ensure reporters can be confident that commercial‑in‑confidence and personal information provided to the Secretary under clause 11 or through data-sharing with other agencies would be treated securely unless there is a clear reason for recording, using or disclosing that information.  

101.          An entrusted person is defined in clause 5 as:

·         the Secretary of the Department;

·         an APS employee of the Department, which includes a Senior Executive Service employee of the Department; and

·         any other person employed or engaged by the Department, such as a contractor or consultant.

102.          The disclosure of protected information by someone who is not and never has been an entrusted person would not be an offence. It would also not be an offence for an entrusted person or former entrusted person to disclose protected information if they did not obtain the information in their capacity as an entrusted person.

103.          Protected information would be defined in clause 5 as fuel information that is commercial‑in‑confidence (defined in clause 6) or personal information as defined in the Privacy Act 1988. The definitions of fuel information and commercial-in-confidence are discussed in further detail in relation to clauses 11 and 6 respectively.

104.          Subclause 20(2) would provide an exemption to the offence of recording, using or disclosing protected information in subclause 20(1). Specifically, where conduct (recording, using or disclosing) is authorised by law or in compliance with a legal requirement, including under provisions proposed in the Bill, it would not be an offence to record, use or disclose protected information.  Division 2 of Part 4 of the Bill would specify a range of authorisations for the recording, use and disclosure of protected information that are relevant to this exemption.

105.          The entrusted person (defendant) would bear the evidentiary burden of proving that the disclosure was authorised or in compliance with a requirement under a law of the Commonwealth, state or territory in the event of a prosecution. This is because it would be significantly more difficult and costly for the prosecution to prove that no Commonwealth, state or territory law authorised the disclosure than for the defendant to identify the law which authorised their conduct. This approach is consistent with the Attorney-General’s Department’s Guide to Framing Commonwealth Offences

106.          Subclause 20(3) would provide an exemption to the offence of recording, using or disclosing protected information in subclause 20(1). Specifically, where an entrusted person did not know that the information they recorded, used or disclosed was commercial‑in‑confidence, then the entrusted person would not have contravened subclause 20(1).

107.          The entrusted person (defendant) would bear the evidentiary burden of proving that they did not know the information was commercial‑in‑confidence in the event of a prosecution. This is because of the difficulties that would arise if the entrusted person’s state of mind was a matter for the prosecution in establishing the offence. This approach is consistent with the Attorney-General’s Department’s Guide to Framing Commonwealth Offences

108.          It is envisioned that the Department would establish a process for managing protected information to ensure that the unauthorised use, recording or disclosure of protected information is prevented. It is envisioned that this would include a process for appropriately identifying, labelling, storing and securing protected information.

109.          Subclause 20(4) would clarify that the prohibition on the disclosure of protected information does not limit an entrusted person’s or former entrusted person’s implied freedom of political communication.

Clause 21 – Exercising powers, or performing functions or duties, as an entrusted person

110.          This clause would authorise an entrusted person to use, record or disclose protected information in the course of their duties as an entrusted person or when performing functions as an entrusted person.

111.          This authorisation is intended to make clear that where an entrusted person records, uses or discloses protected information in the course of their official duties that they will not have committed an offence under clause 20. For example, where a Departmental employee makes a record of protected information to transfer data to a new server during a system upgrade then this will be in the course of their official duties.

Clause 22 – Recording and use of protected information in relation to the publication of fuel information

112.          This clause would make clear that an entrusted person may make records of and use protected information for the purpose of publishing fuel information in accordance with a direction to do so given by the Secretary under clause 16.

113.          The Department currently records and makes extensive use of information which would be protected information under this Bill to enable it to produce effective and useful statistics. This includes combining, comparing and analysing protected information to identify trends, correlations and interactions on a national and regional basis. It is envisioned that this work will continue once mandatory reporting commences.

Clause 23 – Disclosure to the Minister

114.          This clause would empower an entrusted person to disclose protected information to the Minister responsible for the administration of this Bill.

115.          The authorisation is extended to Ministerial advisors as it is common practice for advisors to handle and review information provided by a Department to its Minister.

116.          Clause 23 would also allow an entrusted person to record and use protected information for the purpose of disclosure to a Minister or their advisor. This enables entrusted persons to manipulate protected information to increase its useability and clarity prior to disclosure. For example, protected information could be combined with other protected information for comparison in a table.

117.          Information obtained by the Department from the ATO would be subject to the relevant provisions of the Taxation Administration Act 1953. Section 355-210 of Schedule 1 to that Act provides guidance on the situations where information provided by the ATO may be able to be on-disclosed to a Minister without breaching section 355-155 of the Schedule.

Clause 24 – Disclosure to certain agencies, bodies or persons

118.          This clause would allow the Secretary to disclose protected information to entities specified in subclause 24(2), if the Secretary reasonably believed that the disclosure of the information would help that entity exercise its powers or perform its functions and duties.

119.          The entities that the Secretary may disclose protected information to, or authorise an entrusted person to disclose protected information to, are:

·         The ACCC. The ACCC collects a range of information on the petroleum sector through its petroleum monitoring role. The Department is investigating data-sharing to limit the need of businesses to re-report certain data to the ACCC after it has already been provided to the Secretary under clause 11. Consultation on this proposal is continuing with stakeholders.

·         The Commissioner of Taxation. The ATO uses the APS as a validation tool in its administration of excise and customs duties on covered products. This would enable the Secretary to share protected information with the Commissioner of Taxation where it would help the ATO to administer the excise and customs duty regimes.

·         The IEA or another international organisation prescribed in the Rules, but only if the protected information is statistical fuel information.

·         A Commonwealth, state or territory agency or authority, or international energy security body prescribed in the Rules.

120.          The power to add additional entities in the Rules has been provided to enable additional data sharing arrangements to be established in the future by the Minister. It is envisioned that any future data-sharing would be guided by the Guidance on Data Sharing for Australian Government Entities issued by the Department of the Prime Minister and Cabinet. Rules to add additional entities would be legislative instruments that would be subject to the consultation requirements set out in the Legislation Act 2003.

121.          Subclause 24(1)(b) would empower the Secretary to disclose protected information to the IEA or another international organisation prescribed in the Rules (as per subclause 24(2)(e)) if the information is statistical fuel information. A similar power to authorise an entrusted person to disclose statistical fuel information to an entity referred to at subclause 24(2)(e) is provided at subclause 24(3)(b). These powers are intended to ensure the Department can meet the second object of the Bill in light of the expansive definition of commercial‑in‑confidence in clause 6 and how this interacts with the limitations on the power to publish in clause 16.

122.          The reporting requirements under the Agreement have the potential to require Australia to report to the IEA commercial‑in‑confidence information or information that could identify a business. For example, the IEA currently requires Australia to report on the consumption of bio jet kerosene (i.e. jet fuel developed from biofuels). As the market for bio jet kerosene is still developing in Australia, any aggregate statistics on bio jet kerosene would be expected to be commercial‑in‑confidence under the definition in clause 6. The purpose of subclause 24(2)(e) is to enable the Secretary to disclose this statistic to the IEA. It is envisioned that the Secretary, in line with current practice, would notify the IEA that the statistic is commercially sensitive and request that the IEA not publish the statistic without further aggregation to remove the potential for publication to identify company specific information (for example, only publishing bio jet kerosene statistics on an Asia-Pacific basis or combining the figure with non-bio jet kerosene when publishing statistics on Australia’s jet fuel market). 

123.          It is envisioned that other international organisations could be prescribed in the Rules in the future if it was considered appropriate by the Minister and could include the International Energy Forum and the Asia-Pacific Energy Research Council.

124.          Subclause 24(3) would empower the Secretary to authorise an entrusted person to disclose protected information to an entity listed under subclause 24(2). Consistent with the limits on the Secretary’s powers, the Secretary cannot authorise an entrusted person to disclose protected information unless he or she reasonably believes that the disclosure of the information would help that entity exercise its powers or perform its functions and duties. A data‑sharing authorisation under subclause 24(3) must be in writing. The power to authorise disclosures has been provided as it would not be an efficient use of Government resources for the Secretary to personally make all disclosures.

125.          Subclauses 24(4) and 24(5) would make clear that where an entrusted person is authorised by the Secretary under subclause 24(3) to disclose protected information, they may make records, use and disclose protected information in accordance with the authorisation. It also empowers an entrusted person to prepare protected information for disclosure by the Secretary under subclause 24(1). This provides an exemption to the offence provided in clause 20. The power to record and use protected information is required to enable entrusted persons to manipulate protected information before disclosure. This will ensure that any disclosure is targeted to the relevant circumstances. For example, by allowing irrelevant information to be redacted or protected information to be placed in a new format, such as a table.  

126.          Subclause 24(6) would empower the Secretary to impose written conditions on the recipient of protected information. The Secretary has been provided with a broad power to impose conditions so that they can be tailored on a case-by-case basis to the specific issues raised by an anticipated disclosure.

127.          Failure to comply with a condition imposed by the Secretary would be a criminal offence subject to up to two years imprisonment. This is intended to provide assurance to reporting businesses that if their protected information is disclosed it can continue to be subject to strict protections.

128.          It is envisioned that the Secretary could impose conditions such as requiring that the disclosed information be stored securely, that the information not be on-disclosed to another party or that the information be destroyed when it has been used for the purpose of disclosure. It is envisioned that the specific conditions applied would depend on the sensitivity of the protected information to the entity it relates to, the existing controls in the receiving entity (including whether the information would be protected under agency legislation in a similar manner to the protections in this Bill) and the purpose for which the information is sought.

129.          The Secretary would not have the power to impose conditions on the ACCC as information received by it would be governed by the provisions relating to that agency mentioned in subclause 24(9).

130.          Where an entity wished to record, use or disclose information in a matter that was not permissible under conditions imposed by the Secretary, it would need to seek revised conditions.

131.          Subclause 24(8) would state that an instrument made under subclause 24(6) is not a legislative instrument within the meaning of subsection 8(1) of the Legislation Act 2003. This provision is intended to assist readers and is merely declaratory of the law.

132.          Subclause 24(9) would provide that where the Secretary disclosed protected information to the ACCC that the information disclosed would become protected information under Part VIIA of the Competition and Consumer Act 2010. The Competition and Consumer Act provides extensive protections for sensitive information and this clause is intended to ensure that these protections apply automatically to protected information disclosed from the Department to the ACCC.

Clause 25 – Disclosure with consent

133.          This clause would provide an exemption to the offence associated with recording, use or disclosure of protected information in clause 20 where the person to which the information relates consents to the disclosure.

134.          The exception for disclosure with consent would not apply to information obtained from the ATO due to the application of section 355-160 of Schedule 1 of the Taxation Administration Act 1953. This means that a business cannot consent to the disclosure of its taxation information held by the Department if that information was obtained by the ATO.

Clause 26 – Disclosure of publicly available information

135.          This clause would provide authorisation to record, use or disclose protected information where the protected information is already in the public domain.

136.          The requirement that the information in question must have been lawfully made available to the public is intended to ensure that prior unlawful disclosures do not result in a lifting of the protections for protected information. For example, if one entrusted person unlawfully discloses protected information, this does not permit another entrusted person to disclose the same information as well.

Clause 27 – Disclosure to a person to whom the protected information relates

137.          This clause would provide authorisation to disclose protected information in cases where the information is disclosed to the person to whom it relates.

138.          The provision is intended to ensure that entrusted persons can clarify and query protected information with the person it relates to, and those persons can access protected information that relates to them. For example, a Departmental employee may identify a potential typographical error in a report such as megalitres being reported as litres and wish to clarify the figure with the relevant business.

139.          Disclosure of information obtained by the Department from the ATO would also be subject to the relevant provisions of the Taxation Administration Act 1953.

Clause 28 – Disclosure to the person from whom the protected information was obtained

140.          This clause would authorise disclosure of protected information where it is disclosed to the person who reported the information.

141.          This provision makes it clear that there would be no offence committed where an entrusted person deals with the person who submitted the information.

142.          Disclosure of information obtained by the Department from the ATO would also be subject to the relevant provisions of the Taxation Administration Act 1953.

Clause 29 – Disclosure to a court, tribunal etc.

143.          This clause would allow an entrusted person to record, use and disclose protected information (or a document that contains protected information) for the purposes of legal proceedings and similar processes.

144.          This clause would ensure that entrusted persons would not breach clause 20 when required under a court order or similar direction to disclose protected information.

145.          The power to make a record or use the information is intended to enable an entrusted person to tailor protected information to what is relevant to the proceedings or order to disclose.

146.          The Department could not be required, except for the purposes of taxation law, to disclose to a court or tribunal information obtained from the ATO under the data‑sharing established by the consequential amendments. This is due to the application of section 355-205 of Schedule 1 of the Taxation Administration Act 1953.

Clause 30 – Disclosure for the purposes of law enforcement 

147.          This clause would allow the Secretary or an entrusted person authorised in writing by the Secretary to disclose protected information to:

·         the Australian Federal Police;

·         the police in a state or territory; or

·         a federal, state or territory agency that performs a law enforcement or community protection function.

148.          This provision is intended to enable the Secretary to disclose (or authorise disclosure by an entrusted person) protected information that would assist in an investigation, subject to certain safeguards. It is envisioned that the Department could occasionally collect information under clause 11 that could be relevant to an investigation into a criminal, financial penalty or public revenue matter.

149.          The first safeguard provided in this clause is that the Secretary must not disclose or authorise a disclosure unless he or she reasonably believes the disclosure is necessary for:

·         enforcing a criminal law;

·         enforcing a law which imposes a pecuniary penalty; or

·         protecting the public revenue.

Where the Secretary does not reasonably believe the disclosure is necessary for one of these purposes, he or she must not authorise the disclosure.

150.          The second safeguard is that the Secretary may impose written conditions upon the recipient of protected information. The Secretary has been provided with a broad power to impose conditions so that any conditions can be tailored on a case-by-case basis to the specific issues raised by a disclosure.

151.          Failure to comply with a condition imposed by the Secretary would be a criminal offence subject to up to two years imprisonment.

152.          It is envisioned that the Secretary could impose conditions such as requiring that the disclosed information be stored securely, that the information not be on-disclosed to another party or that the information be destroyed when the relevant investigation is concluded. It is envisioned that the Secretary would impose these conditions on a case‑by‑case basis depending on relevant factors, which could include the nature of the investigation, the criticalness of the disclosure to the investigation, the sensitivity of the protected information to the business to which it relates, and the information controls of the receiving party.

153.          Where an entity mentioned in subclause 29(2) wished to record, use or disclose information on a matter that was not permissible under conditions imposed by the Secretary, they would need to seek amended conditions.

154.          Where the Secretary authorises an entrusted person to make a disclosure, the entrusted person may make records and use the information for the purposes of the disclosure. This would enable an entrusted person to redact, tailor and package up the information so it is as relevant as possible to the investigation.

155.          Subclause 29(8) states that an instrument made under subclause 29(6) is not a legislative instrument within the meaning of subsection 8(1) of the Legislation Act 2003. This provision is intended to assist readers and is merely declaratory of the law.

Division 3 – Disclosure

Clause 31 – Disclosure of information to the Secretary

156.          This clause would enable entrusted persons under the Australian Border Force Act 2015 (ABF Act) to provide protected information (as defined under the ABF Act) that is fuel information to the Secretary or an entrusted person under this Bill.

157.          This clause is intended to allow DIBP to disclose import and export declaration information (such as details on ownership, volume and shipping such as port of origin and arrival) in relation to covered products to the Department. This information would be used to:

·                monitor compliance with clause 11. Where a company is recorded by DIBP as importing or exporting a covered product but does not report any production, wholesales or stocks under clause 11 it may indicate non-compliance; and

·                undertake quality assurance. The data would be used to validate statistical fuel information, especially wholesale and stock statistics. This would help to improve confidence in the accuracy of the statistics produced through mandatory reporting.

158.          Protected information would only be able to be disclosed by DIBP where the Secretary (of the Department of the Environment and Energy) held a reasonable belief that the information would assist him or her to exercise his or her powers and functions under this Bill. This means that fuel information could not be disclosed to the Secretary for purposes unrelated to this Bill.

Part 5 – Compliance and enforcement

Clause 32 – Simplified outline of this Part

159.          The simplified outline provided here is intended to assist readers to understand the substantive provisions. The outline is not comprehensive and readers should rely on the substantive provisions to understand the operation of Part 5.

Clause 33 – Monitoring powers

160.          This clause would apply the monitoring powers in Part 2 of the Regulatory Powers (Standard Provisions) Act 2014 to information given by persons under clause 11.

161.          Part 2 of the Regulatory Powers (Standard Provisions) Act 2014 provides monitoring powers to persons appointed under clause 34 to enable them to conduct compliance monitoring activities such as:

·         entering premises with the consent of occupiers or under warrant;

·         inspecting documents located in an entered premises;

·         securing things in entered premises for up to 24 hours; and

·         asking questions of occupants in an entered premises.

162.          It is critical to the ongoing reliability of Australia’s fuel statistics that the information provided to the Department can be reviewed, audited and verified. The fuel information developed by the Department would be used by government agencies to develop energy security policy, by business to evaluate investment opportunities, and by the IEA to determine the size of Australia’s oil stockholdings. As a result, the submission of incorrect information could have serious economic and financial consequences.

Clause 34 – Appointment of authorised persons

163.          This clause would provide the Secretary with the power to appoint Departmental employees, as well as consultants and contractors engaged by the Department, as authorised persons for the purposes of Part 2 of the Regulatory Powers (Standard Provisions) Act 2014.

164.          The Secretary could only appoint someone as an authorised person where he or she is satisfied that the appointee has the knowledge or experience necessary to operate effectively and appropriately in this role. It is envisioned that relevant factors for the Secretary’s consideration would include any training or experience as an inspector or auditor, experience in fuel or fuel-related markets and any experience exercising monitoring powers.

165.          The Secretary would be able to issue directions to authorised persons about how they use the monitoring powers. Such a direction would not be a legislative instrument within the meaning of subsection 8(1) of the Legislation Act 2003 and subclause 34(4) is merely declaratory of this and intended to assist readers.

166.          The Secretary could engage consultants and contractors as authorised persons as the necessary expertise to review and audit information received under clause 11 may not be available within the Department. Authorised persons would need skills and experience in one or more of auditing, engineering, geology and the fuel market to be effective. It is envisioned that the Department may need to engage more than one contractor or consultant in the future as different issues may require different skills and experience. It is envisioned that if a consultant or contractor was engaged by the Secretary as an authorised person that:

·         the authorised person would be subject to a contractual relationship with the Department;

·         the authorised person would maintain the appropriate professional qualification/s and membership/s associated with their relevant expertise;

·         the authorised person would be sufficiently senior and experienced to perform the functions they are expected to perform; and

·         the Secretary would issue directions to ensure the authorised person used their powers appropriately. For example, a requirement that the contracted auditor not use, record or disclose protected information they obtain through their position except in accordance with their role and function as an auditor would be expected to be a common condition.

Clause 35 – Civil penalty provision

167.          This clause would provide that the standard provisions of Part 4 of the Regulatory Powers (Standard Provisions) Act 2014 apply to the enforcement of civil penalties under this Bill. Clause 11(2) of the Bill, which imposes the obligation to report fuel information, is a civil penalty provision.

168.          The Secretary’s power to seek enforcement of a civil penalty order is required to ensure the obligation to report can be enforced.

169.          Part 4 of the Regulatory Powers (Standard Provisions) Act 2014 provides a range of provisions governing the application for and enforcement of civil penalty orders.

170.          Subclause 35(2) would provide that for the purposes of the Regulatory Powers (Standard Provisions) Act 2014 the relevant court for the Secretary to seek the imposition of a civil penalty is:

·         the Federal Court of Australia; or

·         the Federal Circuit Court of Australia; or

·         any state or territory court which has jurisdiction.

171.          Subclause 35(3) would clarify that Part 4 of the Regulatory Powers (Standard Provisions) Act 2014 applies for the purposes of this Bill in relation to activities that occur offshore. This would align the power to seek enforcement of a civil penalty order with the intention of the expanded application of this Bill provided by clause 8.

Clause 36 – Infringement notices

172.          This clause would provide that the Secretary may issue an infringement notice for a civil penalty provision in accordance with Part 5 of the Regulatory Powers (Standard Provisions) Act 2014.

173.          This would mean that where the Secretary believed on reasonable grounds that a regulated entity had contravened their obligations under clause 11 then he or she could choose to issue the regulated entity with an infringement notice as an alternative to seeking enforcement of a civil penalty order.

174.          Part 5 of the Regulatory Powers (Standard Provisions) Act 2014 provides a range of conditions and limitations on the Secretary’s power to issue infringement notices. A non-exhaustive list of some of the relevant limitations includes:

·         infringement notices must be given within twelve months of the alleged contravention (one year from when a required report is alleged to have not been provided);

·         infringement notices must contain certain information to be valid (see section 104 of the Regulatory Powers (Standard Provisions) Act 2014);

·         an extension to the time to pay an infringement notice may be granted by the Secretary;

·         an infringement notice may be withdrawn by the Secretary; and

·         where an infringement notice is paid, any liability of the regulated entity for the alleged contravention of the obligation to report would be discharged.

175.          Subclause 36(2) would provide that the Secretary is both the infringement officer and relevant chief executive for the purposes of Part 5 of the Regulatory Powers (Standard Provisions) Act 2014. This means that only the Secretary could issue, withdraw or provide an extension to the time required to pay an infringement notice.

176.          Subclause 36(3) would clarify that Part 5 of the Regulatory Powers (Standard Provisions) Act 2014 applies for the purposes of this Bill in relation to activities that occur offshore. This would align the power to seek enforcement of a civil penalty order with the intention of the expanded application of this Bill provided by clause 8.

Part 6 – Miscellaneous

Clause 37 – Simplified outline of this Part

177.          The simplified outline provided here is intended to assist readers to understand the substantive provisions. The outline is not comprehensive and readers should rely on the substantive provisions to understand the operation of Part 6.

Clause 38 – Treatment of trusts

178.          This clause would extend the application of the obligation to report fuel information to trusts. Where there is a single trustee the obligation to report prescribed information would apply to that trustee. Where there is more than one trustee, the obligation to report prescribed information would apply to each and every trustee, but be able to discharged by any one of the trustees (noting that a third party may also report of a trustee’s behalf).

179.          Subclause 38(4) would make clear that where one or more trustees fails to comply with their obligations under clause 11, a civil penalty may be imposed.

180.          It should also be noted that clause 5 would provide that an offence against this Act includes an offence against Chapter 7 of the Criminal Code Act 1995 that relates to this Act.

181.          The application of the Bill is proposed to be extended to trusts because a small number of businesses active in the fuel market are known to operate aspects of their business through a trust structure. This clause would ensure that these businesses are subject to mandatory reporting.

Clause 39 - Delegations

182.          This clause would allow the Secretary to delegate in writing, to an SES officer, or acting SES officer, of the Department, the power to:

·         set the manner and form that prescribed information is to be provided;

·         grant exemptions from the duty to report;

·         make a determination whether information is commercial-in-confidence;

·         collect fuel information;

·         publish fuel information;

·         appoint a person as an authorised person for the purposes of compliance monitoring; and

·         issue identify cards to authorised persons.

183.          The Secretary could issue directions to his or her delegate and the delegate must comply with these directions when they exercise the delegation.

184.          The Secretary could not delegate his or her power to commence an action for the enforcement of a civil penalty order or the power to issue an infringement notice.

Clause 40 – Review of operation of the Act

185.          This clause would require the Minister to ensure that an independent review of mandatory reporting is undertaken after 1 January 2021. The report must be tabled in Parliament within 15 days of it being completed to the Minister’s satisfaction.

186.          This review would be a one-off review. It would not preclude the Department from conducting one or more reviews of the reporting requirement before, during or after the mandatory review.

187.          This review would evaluate whether the definition of fuel information, covered product and covered activity remained appropriate. These matters would be specified in the Bill because they are the key areas in which the Parliament has delegated rule-making power to the Minister, and their appropriateness should be reviewed once the scheme has operated for a sufficient length of time. The review could also cover any other matters considered appropriate by the Minister to be added to its terms of reference. For example, it is envisioned that the regulatory burden on reporters and opportunities to minimise this would be included in the terms of reference.

188.          It is envisioned that in evaluating whether the definition of covered activities and products are appropriate that the review would consider whether it would be appropriate to remove or add any products to the list of covered products. This could include undertaking a cost benefit analysis on the addition or removal of covered products, including any impact on business.

189.          The requirement for an independent review means that the review would need to be led by one or more persons not employed by the Department. Departmental employees would be able to assist and contribute to the review.

Clause 41 - Rules

190.          This clause would allow the Minister to make legislative instruments where permitted directly, or by implication, in this Bill.

191.          Subclause 41(2) would provide a number of limitations on what the Minister may provide in the Rules.

192.          This provision would empower the Minister to make Rules covering matters such as:

·         who has an obligation to report information to the Secretary;

·         what is a covered activity;

·         what is a covered product;

·         when reports must be provided to the Secretary;

·         any exemptions from the reporting obligation;

·         any reporting threshold;

·         any reporting conditions. For example, the normalised temperature and pressure for the reporting of liquids to account for the impact of these factors on volume; and

·         any other matters necessary or convenient to be prescribed for the carrying out or giving effect to this Bill.


 

PETROLEUM AND OTHER FUELS REPORTING (CONSEQUENTIAL AMENDMENTS AND TRANSITIONAL PROVISIONS) BILL 2017

NOTES ON CLAUSES

Part 1 – Preliminary

Clause 1 – Short Title

1.                  This clause would provide for the Bill, when enacted, to be cited as the Petroleum and Other Fuels Reporting (Consequential Amendments and Transitional Provisions) Act 2017.

Clause 2 – Commencement

2.                  This clause would provide that this Bill commences at the same time as the Petroleum and Other Fuels Reporting Bill 2017 (Main Bill) commences.

3.                  If the Main Bill does not commence then this Bill would not commence either.

Clause 3 – Schedules

4.                  This clause would provide that the Schedule amends the Competition and Consumer Act 2010 and the Taxation Administration Act 1953 in the manner set out in the Schedule.

Schedule 1 – Amendments

Part 1 – Consequential amendments

Competition and Consumer Act 2010

Item 1 – After section 95ZP

5.                  This item would insert a new section 95ZPA into the Competition and Consumer Act 2010.

6.                  The intention of section 95ZPA is to enable fuel information to be shared by the Australian Competition and Consumer Commission (ACCC) with the Department of the Environment and Energy (the Department). It is envisioned that information related to the ownership, operation, capacity, throughput and location of fuel storage terminals, which is collected by the ACCC, would be shared with the Department. This information would be used to validate the statistics produced by the Department and produce information relevant to evaluating energy security policy.

7.                  Section 95ZPA would enable an entrusted person under the Competition and Consumer Act 2010 to disclose protected information under that Act to the agency responsible for administrating the Main Bill, if the information enabled or assisted an officer in the agency responsible for administrating the Main Bill to carry out any function or power under the Main Bill.

8.                  The Chairperson, or his or her delegate under subsection 95APA(4), may impose written conditions when disclosing protected information. For example, the Chairperson could require that the disclosed information be stored securely or not be disclosed outside of the receiving agency without the Chairperson’s consent.  

9.                  The Chairperson may delegate his or her power to authorise disclosure of protected information under this clause to another member of the Commission, an SES employee or an acting SES employee of the Commission.

Taxation Administration Act 1953

Item 2 – Subsection 355-65(8) in Schedule 1 (after table item 6)

10.              This item would insert a new table item 6A into subsection 355-65(8) of Schedule 1 of the Taxation Administration Act 1953.

11.              The intention of the new table item 6A is to enable the Australian Taxation Office (ATO) to share fuel information with the Department. It is envisioned that the ATO would share information collected under the Product Stewardship for Oil Program and the fuel excise and customs duty regimes with the Department.

12.              The Product Stewardship for Oil Program collects data on the volumes of some covered products (such as lubricants and base oil stocks) entered for home consumption and the volumes of oils re-refined and recycled. During consultation, stakeholders supported the use of this data as an alternative to mandatory reporting.

13.              The excise and customs duty regimes require businesses to report the volume of transport fuels entered for home consumption on a weekly basis (this is used to calculate their liability to pay fuel excise). It is envisioned that the Rules created under section 41 of the Main Bill could require businesses to report the volumes of fuel they had entered for home consumption in a month (as monthly data is required by the International Energy Agency (IEA)). Therefore, comparison between information reported to the Department and the ATO will assist the Department to verify the information received under mandatory reporting. 

14.              The Taxation Administration Act 1953 contains a range of restrictions on the on‑disclosure of information provided to other entities. These restrictions would apply to information shared by the ATO as a result of this amendment. For example, section 355-155 of Schedule 1 of the Taxation Administration Act 1953 would mean it was an offence for the Department to on‑disclose information unless the disclosure was permissible under the Taxation Administration Act 1953. The most relevant permission is contained in section 355-175, which provides that information may be on-disclosed to another entity (such as the IEA) if the disclosure is in accordance with the original exemption. That is the exemption provided by this amendment.

15.              This means that the Department would be able to disclose information provided by the ATO to another entity if the disclosure was for the purpose of administering the Main Bill. It is intended that a disclosure to the IEA in accordance with clause 16 or clause 24 of the Main Bill would be for the purposes of administering it.

16.              The Taxation Administration Act 1953 regulates the circumstances in which the Department may on-disclose information received from the ATO to its Minister (currently the Minister for the Environment and Energy) (section 355-210 of Schedule 1); a Court or tribunal (355-205 of Schedule 1); or with the consent of the person to whom the information relates (355-160 of Schedule 1). 

Part 2 – Application and transitional provisions

Item 3 – Application provision – reports of fuel information to be given to the Secretary

17.              This item would make clear that the obligation to report fuel information under clause 11 of the Main Bill would commence on 1 January 2018 or when the Rules made under clause 41 of the Main Bill commence, whichever day is later. 

18.              It is envisioned that the mandatory reporting obligation would commence on 1 January 2018, but if the Rules had not yet commenced it would be appropriate to delay the commencement of the reporting requirement until such time that the Rules were operative.

Item 4 – Application provision – publication of fuel information

19.              This item would make clear that the Secretary’s power in the Main Bill to publish fuel information would apply to information collected before, on or after the commencement of this Bill.

Item 5 – Application provision – disclosure of information to the Secretary

20.              This item would make clear that an entrusted person under the Australian Border Force Act 2015 could disclose information under clause 31 of the Main Bill whether that information was collected before, on or after the commencement of this Bill. 

Item 6 – Application provision – Competition and Consumer Act 2010

21.              This item would make clear that the ACCC could disclose information under section 95ZPA of the Competition and Consumer Act 2010 inserted by item 1 of Schedule 1 of this Bill whether that information was collected before, on or after the commencement of this Bill. 

Item 7 – Application provision – Taxation Administration Act 1953

22.              This item would make clear that the ATO could disclose information under table item 6A in subsection 355-65(8) of Schedule 1 of the Taxation Administration Act 1953 inserted by item 2 of Schedule 1 of this Bill whether that information was collected before, on or after the commencement of this Bill.