Responses to regulations seek benefit for all and the environment

SUBMISSIONS are pouring in from the coal industry on the National Greenhouse and Energy Reporting System Regulations Policy Paper, as miners, contractors and infrastructure providers try to ensure the regulations are beneficial to all parties.
Responses to regulations seek benefit for all and the environment Responses to regulations seek benefit for all and the environment Responses to regulations seek benefit for all and the environment Responses to regulations seek benefit for all and the environment Responses to regulations seek benefit for all and the environment


Christine Feary

The National Greenhouse and Energy Reporting System Act will come into force on July 1, 2008.

Its purpose, as stated in the regulations policy paper, is to act as "a single, streamlined framework for the mandatory reporting of greenhouse gas emissions and energy consumption and production by Australian corporations, to meet the current and prospective needs of government, business and the public".

Three submissions on the paper from BHP Billiton, Thiess and Leighton, raised several issues relating to the proposed regulations, including subsidiary reporting,

One issue all three agreed on was the need to revisit the definition of "operational control", which determines who is responsible for reporting emissions and energy consumption and production.

According to the paper, a corporation will be considered to have operational control over a facility if it has the authority to introduce and implement operating health and safety and environmental policies.

If a third party is responsible for operating or managing a facility, the corporation with the greatest authority to introduce and implement operating and environmental policies will be accepted to have operational control over the facility.

In its submission, BHP argued that the facility owner employing a separate manager or operator should have the option to meet the Act's reporting requirements itself, "for reasons of corporate responsibility and accountability, and for consistency".

"It would be counter-productive and impractical … for a corporation to have to structure its operations to meet the operational control test, regardless of other commercial imperatives, in order to take responsibility for reporting on the energy and greenhouse gas impact of its business."

BHP proposed that controlling companies be allowed to elect to assume the obligations under the act to report on a facility owned by it or a subsidiary, even if it does not meet the requirements to have operational control.

The company said the owner's right to elect could be limited by a range of mechanisms, such as:

  • The election could only be made by a corporation that owned the facility, wholly or as a joint venture participant or partner;
  • The right to elect could only be made by a controlling corporation that would be required to register under the act even without the election, ie if members of its group have operational control over facilities that trigger the thresholds in their own right; and
  • All elections would need to be approved by the Greenhouse and Energy Data Officer

"BHP Billiton acknowledges that the regulations would probably not be the appropriate place to implement this right to elect, and so an amendment to the act would be required,” its submission says

Mining services company Thiess said the process of identifying the party with overall operational control could be difficult under many common commercial scenarios. This includes situations where several unrelated contractors operate within the same facility, each with a certain amount of operational control.

Thiess says such outcomes would be "inconsistent with the NGER objectives for streamlined and transparent public reporting". Tis submission says project owners should be considered to have the greatest authority to introduce and implement policy. Therefore, they should have responsibility for reporting greenhouse emissions and energy production and usage.

Leighton Contractors also took issue with the definition of operational control, arguing that it is "unclear within a contracting context".

"At a number of mines at which LCPL operates, we implement our operating policies (environmental, health and safety) under approval and direction from our clients,” it says.

"Even when LCPL is the author of project policies and procedures they are directed by our clients' minimum requirements and ultimately subject to their approval."

Leighton says putting the onus on facility operators could create a scenario where major mining houses have no emissions other than those created by their offices.

BHP’s submission listed several other concerns about the regulations. These include the need for procedures to eliminate duplicative state and territory data collection requirements in the interest of streamlining centralised reporting.

It says that, while the act "contemplates that the regulations will specify which state and territory laws are to be overridden" the Regulations Policy Paper has not addressed the issue.

"BHP Billiton suggests that early resolution of duplicated reporting requirements (particularly where thresholds, accuracy requirements and category definitions differ between regimes) at both state and territory level and commonwealth level … would help lessen the heavy reporting burden and thereby improve the quality and accuracy of data."

BHP also suggested formally recognising offsets currently recognised by existing programs, such as Renewable Energy Certificates and NSW Greenhouse Gas Abatement Certificates.

Another organisation getting in on the submission action is Queensland Rail. It voices concern over the definition of facilities under the act. QR says that, under the system, its diverse business activities could be included under a variety of sub-categories.

It suggests that a facility could be defined as a business unit of activity, which would include freight rail transport.

It also recommends reporting companies be given the option to further define or sub-categorise data. This will help with administrative and technical arrangements associated with a future emissions trading scheme.