Civil penalties and undertakings explained As of 29 June 2010 new enforcement remedies are available to the Regulator under the Renewable Energy (Electricity) Act 2000. These include civil penalty orders, enforceable undertakings and injunctions. The new provisions apply in respect of contraventions of the Act by individuals, companies, executive officers of companies and other persons involved in contraventions of the Act. Improper creation of certificates Under subsection 24A(1), a person must not create a certificate if the person is not entitled to create the certificate. A "person" includes an individual and a body corporate. Under subsection 24A(2), it is also unlawful for a person to:
- aid, abet, counsel or procure a contravention of subsection 24A(1);
- induce, whether by threats or promises or otherwise, a contravention of subsection 24A(1)
- be in any way, directly or indirectly, knowingly concerned in, or party to, a contravention of subsection 24A(1);
- conspire with others to effect a contravention of subsection 24A(1).
A person who is involved in a contravention of subsection 24A(1) in any of the ways described above commits what is called an 'ancillary contravention'. A person who contravenes subsection 24A(1) or 24A(2) may be taken to court and ordered to pay a civil penalty (see below under Civil penalty orders). Enforceable undertakings and injunctions can also apply in respect of these contraventions. | Examples: - An accredited power station which create LGCs in respect of energy generated from sources other than 'eligible energy sources' contravenes subsection 24A(1).
- A person who creates STCs in respect of a solar water heater, which is not capable of heating water from the sun or is not an approved model on the Register of Solar Water Heaters contravenes s24A(1).
| False information resulting in the improper creation of STCs for solar water heaters and small generation units Under subsection 24B(1), a person (the first person) must not provide information:
- that is false or misleading in a material particular; or
- that omits a matter or thing without which the information is misleading in a material
to another person (the second person) in relation to a solar water heater or a small generation unit (including in relation to the installation of the heater or unit). If the second person relies on that information in creating a STC which the second person is not entitled to create, and it was reasonable for the second person to so rely on the information, the first person contravenes subsection 24B(1).
Subsection 24B(1) is not limited in operation to persons registered under the Renewable Energy (Electricity) Act 2000. Rather, it applies to any person who provides false or misleading information in the manner and circumstances described. Under subsection 24B(2), it is also unlawful for a person to:
- aid, abet, counsel or procure a contravention of subsection 24B(1);
- induce, whether by threats or promises or otherwise, a contravention of subsection 24B(1)
- be in any way, directly or indirectly, knowingly concerned in, or party to, a contravention of subsection 24B(1);
- conspire with others to effect a contravention of subsection 24B(1).
A person who is involved in a contravention of subsection 24B(1) in any of the ways described above commits what is called an 'ancillary contravention'. A person who contravenes subsection 24B(1) or 24B(2) may be taken to court and ordered to pay a civil penalty (see below under Civil penalty orders). Enforceable undertakings and injunctions can also apply. | Example: The installer of a PV system (the first person) submits a STC assignment form on behalf of the owner along with other supporting documentation indicating that the installation has been completed when in fact only the panels have been installed. If the agent (the second person) creates the STCs in reliance on this information, and it could reasonably have been expected that the agent would so rely on this information, the installer will have contravened subsection 24B(1). | Executive officers of body corporates section 154N An executive officer of a body corporate contravenes this subsection if he or she knew, or was reckless or negligent as to whether, the body corporate would contravene a civil penalty provision (which includes subsections 24A(1), 24A(2), 24B(1) and 24B(2)), and the executive officer was in a position to influence the body corporate but failed to take all reasonable steps to prevent the contravention. An executive officer of a body corporate means:
- a director of the body corporate;
- the chief executive officer (however described) of the body corporate;
- the chief financial officer (however described) of the body corporate; or
- the secretary of the body corporate.
| Example: A company registered to create STCs receives assignments from owners entitled to create STCs but takes no or inadequate steps to check the accuracy or validity of the assignments. If the company subsequently creates STCs where there was no entitlement to create them, the executive officer(s) of the company may be liable for contravention of subsection 154N(1). | Civil penalty orders Subsections 24A(1), 24A(2), 24B(1), 24B(2) and 154N(1) are civil penalty provisions. The Renewable Energy Regulator (the Regulator) may commence court proceedings against any person who contravenes these subsections. The maximum penalty a court can impose upon a person for a contravention of subsection 24A(1) is: - for an individual— the greater of (a) 1 penalty unit for each certificate to which the contravention relates, up to a maximum of 10,000 penalty units ($1,100,000); or (b) 100 penalty units ($11,000).
- for a body corporate— the greater of (a) 5 penalty units for each certificate to which the contravention relates, up to a maximum of 50,000 penalty units ($5,500,000); or (b) 500 penalty units ($55,000).
The maximum penalty a court can impose upon a person for a contravention of subsections 24A(2), 24B(1) and 24B(2) is: - for an individual— 100 penalty units ($11,000).
- for a body corporate— 500 penalty units ($55,000).
The maximum penalty a court can impose upon an executive officer who contravenes subsection 154N(1) is determined by reference to the underlying contravention by the body corporate. That is, the maximum penalty is equal to that which could be imposed on the executive officer if he or she had committed the underlying contravention. One penalty unit is currently $110.00. | Civil and criminal proceedings Court proceedings brought by the Regulator under Part 15A for contraventions of civil penalty provisions in the Renewable Energy (Electricity) Act 2000 are civil proceedings. However, conduct which contravenes civil penalty provisions may also constitute a criminal offence (either against the Renewable Energy (Electricity) Act 2000 or other legislation, such as the Criminal Code 1995). A court cannot make a civil penalty order against a person for a contravention of a civil penalty provisions if the person has already been convicted of an offence constituted by substantially the same conduct. However, criminal proceedings may be commenced against a person even if a civil penalty order has already been made against the person for substantially the same conduct. There are also limitations on how evidence given in civil proceedings can be used in criminal proceedings where the two proceedings are based on substantially the same conduct. | Example: A person who creates a certificate which he or she had no entitlement to create contravenes subsection 24A(1). However, this conduct also constitutes an offence against subsection 24(1) (and possibly subsection 24(3)) of the Renewable Energy (Electricity) Act 2000. | Other remedies Enforceable undertakings Division 1 of Part 15B provides for an enforceable undertaking regime. This regime allows persons who may not have complied with the Renewable Energy (Electricity) Act 2000 or the Renewable Energy (Electricity) Regulations 2001 (or associated provisions in the Criminal Code 1995) to agree to a number of measures to ensure current and future compliance and to rectify past non-compliance. Undertakings can be in the form of positive obligations (eg, the person will put in place particular checks and balances to ensure certificates are created in accordance with the Renewable Energy (Electricity) Act 2000) or negative obligations (eg, the person will refrain from using a particular installer (who has been involved in the improper installation of solar water heaters in the past) until an audit has been carried out on all the installations the installer has purportedly carried out). Furthermore, the Regulator may accept an undertaking that a person will surrender certificates which the person was not entitled to create. If the Regulator considers that a person has breached an undertaking, the Regulator may commence proceedings against that person in the Federal Court of Australia. If the Court is satisfied that the person has breached the undertaking, it may order: - the person to comply with the undertaking;
- the person to pay the Regulator any financial benefit derived from the breach;
- the person to compensate any other person who has suffered loss or damage as a result of the breach;
- anything else the Court considers appropriate.
The Regulator is not required to accept an undertaking offered by a person. Whether or not the Regulator will accept an undertaking in lieu of, or in addition to, any other enforcement action (eg seeking a civil penalty) in a given situation will depend on a variety of factors. The Regulator will publish a compliance and enforcement policy dealing with issues such as this.
Injunctions
The Regulator or any other 'aggrieved person' may apply to the Federal Court of Australia for an injunction to: - restrain a person from engaging in conduct that would be an offence against the Renewable Energy (Electricity) Act 2000 or the Renewable Energy (Electricity) Regulations 2001 or a contravention of a civil penalty provision; or
- require a person to do a thing if failing to do that thing would be an offence against Renewable Energy (Electricity) Act 2000 or the Renewable Energy (Electricity) Regulations 2001 or a contravention of a civil penalty provision.
Failure to comply with an injunction may constitute a contempt of court. | Click here to see compliance activities for 2010-2011.
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Civil Penalties Explained