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Appendix A1: Reports addressing special legislative requirements

This appendix sets out information the department is required to report on as part of its administration of the following legislation:

  • Australian Jobs Act 2013 (the Jobs Act)
  • Automotive Transformation Scheme Act 2009
  • Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act)
  • Fuel Quality Standards Act 2000
  • Greenhouse and Energy Minimum Standards Act 2012

Australian Jobs Act

The Jobs Act commenced on 27 December 2013. Its primary objective is to provide full, fair and reasonable opportunity for Australian entities to participate in major Australian projects. The Jobs Act requires the development and implementation of an Australian Industry Participation (AIP) plan for each eligible major project with capital expenditure of $500 million or more. The Jobs Act also establishes a statutory position, the Australian Industry Participation Authority (the Authority). Section 83 of the Jobs Act requires that the Authority prepare an annual report on its operations. This report addresses that requirement for 2019–20. On 19 June 2019, Minister Andrews appointed Trevor Power, head of the Industry Growth Division, as the acting Authority for a 12-month term, commencing 29 June 2019. Following Mr Power’s transfer to another department, on 15 January 2020 Minister Andrews appointed Donna Looney, General Manager Advanced Technologies Branch, as the acting Authority for a 12-month term, commencing 18 January 2020.

The Authority and the Jobs Act The Authority’s role is to ensure compliance with the Jobs Act; evaluate, approve and publish summaries of AIP plans; and monitor the implementation of those plans. AIP plans apply the AIP National Framework principles. They also detail how a project proponent will provide full, fair and reasonable opportunity to Australian entities to supply key goods and services to a project. The Jobs Act also requires six-monthly compliance reporting on the AIP plan for the project’s construction phase and for the first two years of the operations phase for new facilities. In 2019–20, the Authority approved 17 AIP plans for major projects, with total capital expenditure of more than $11 billion.

Monitoring The Authority uses a number of strategies to encourage major project proponents to comply voluntarily and deal with non-compliance appropriately. These include promoting awareness of the Jobs Act, engaging with project proponents to promote compliance, and monitoring compliance. The Authority’s monitoring of industry activity for compliance with the Jobs Act is ongoing. Information on major projects is gathered from a range of publicly available and internal sources. In 2019–20, the Authority:

  • wrote to 21 project proponents, alerting them to their potential obligations under the Jobs Act and providing guidance on meeting their obligations
  • received formal notification of 31 major projects with current or future obligations under the Jobs Act
  • approved 17 draft AIP plans under the Jobs Act and published the AIP plan summaries at www.industry.gov.au/aip
  • received, evaluated and accepted 78 AIP plan compliance reports under the Jobs Act.

Self-assessment The Authority ran its third evaluation survey in 2019–20 to obtain feedback and comments on its performance from stakeholders that had their AIP plans and first compliance reports approved in 2019–20 under the Jobs Act. The survey is part of the Authority’s self-assessment under the Australian Government’s Regulator Performance Framework. The survey responses are being compiled and the findings will be reported in the 2019–20 self-assessment report.

Jobs Act review The five-yearly statutory review of the operation of the Jobs Act was conducted from August to November 2018. It included consultations with stakeholders across Australia. The Authority considered and accepted all eight of the review’s recommendations. To date, it has implemented four recommendations that provide the maximum benefit for proponents:

  • streamline the AIP plan and compliance report templates
  • develop standard operating procedures for Authority staff
  • publish guidance information on compliance dates for AIP plans
  • develop an AIP plan exceptions process.

It is addressing the remaining four recommendations, including creating a monitoring and evaluation framework, formulating a communication strategy, reviewing the AIP website and encouraging information sharing with the states and territories.

The Authority continued to develop an online system for proponents to submit AIP plans and compliance reports. It considered options for configuring the system and consulted with proponents on potential design features.

Industry Capability Network Limited The Industry Capability Network (ICN) Limited supports the AIP National Framework by managing a national database of industry capability and project opportunities known as the ICN Gateway. The database connects potential suppliers to project opportunities. The department provides annual funding to ICN Limited to deliver national coordination and IT support for the ICN. The department has been working with other jurisdictions and ICN Limited to improve the services delivered to industry and government through the ICN Gateway. ICN Limited has also been funded to manage a new IT analytical tool to help governments better understand industry capability.

The Authority manages funding for ICN Limited under the Australian Jobs (Australian Industry Participation) Rule 2014.

Commonwealth procurements, grants and investments On 28 July 2009, the government released the Australian Government Procurement Statement, announcing that it would strategically apply the AIP National Framework principles to large Commonwealth procurements. Since 1 January 2010, companies bidding on Commonwealth procurements of $20 million or more have been required to put AIP plans in place. The AIP plan requirement was extended to:

  • Commonwealth grants and large Commonwealth-funded infrastructure projects on 1 July 2012
  • selected Clean Energy Finance Corporation investment projects on 1 July 2013
  • investments by NAIF on 1 July 2016.

In 2015, the procedure for all tenderers of Commonwealth procurements to prepare an AIP plan as part of their tender was discontinued. The aim was to reduce regulatory burden for business in line with the Australian Government’s broader agenda of cutting red tape. A tenderer is now required to prepare and implement an AIP plan only if their tender is successful.

The Authority provides advice on preparing draft AIP plans and AIP plan requirements for major government procurements, loans and grants under the Australian Jobs (Australian Industry Participation) Rule 2014.

AIP plans in Commonwealth funding In 2019–20, 12 AIP plans were approved for Commonwealth procurements; Commonwealth grants and Commonwealth-funded large infrastructure projects; and Clean Energy Finance Corporation and NAIF investments valued at $20 million or more (refer to Table 49). The department publishes summaries of AIP plans online. These include details about how project proponents will acquire and use information on Australian industry capabilities, and how they will communicate opportunities to Australian suppliers.

Table 49: 2019–20 AIP plan statistics for Commonwealth funding

AIP plans for Commonwealth procurements

Number of AIP plans approved

0[1]

Number of determinations that a proposed approach to market has an AIP plan requirement[2]

6

Number of determinations that a proposed approach to market is exempt from AIP plan requirements

18

AIP plans for Commonwealth grants and Commonwealth-funded infrastructure projects

Number of AIP plans approved

3

Number of grants and projects exempted from AIP plan requirements

2

AIP plans for Commonwealth investments—Clean Energy Finance Corporation

Number of AIP plans approved

4

Number of investments exempted from AIP plan requirements

2

AIP plans for Commonwealth investments—NAIF

Number of AIP plans approved

5

Number of investments exempted from AIP plan requirements

1

[1] Submission and approval of AIP plans depend on the status of approaches to market conducted by external agencies (that is, actual release dates, tender evaluation progress, postponements or delays).

[2] Approaches to market cover single and panel procurements. They also include panel procurements where an overarching AIP plan is not required but agencies planning to issue a contract of $20 million or more under applicable panels are to contact the department for an AIP plan determination.

Commonwealth AIP SmartForm The department introduced a Commonwealth AIP SmartForm in October 2018 to reduce the time and burden on businesses preparing AIP plans and implementation reports. In 2019–20, 10 SmartForm AIP plans were approved. AIP plan implementation reports began using the SmartForm process in 2019–20.

Automotive Transformation Scheme Act The Automotive Transformation Scheme (ATS) aims to encourage competitive investment and innovation in the Australian automotive industry. It is designed to make the industry economically sustainable, improve environmental outcomes through better manufacturing processes and contribute to the manufacture of environmentally sustainable cars. It is also designed to promote the development of workforce skills.

Section 27A of the Automotive Transformation Scheme Act requires the Secretary to report annually on assistance paid to ATS participants (refer to Table 50). The Secretary must also report on industry progress towards achieving economic sustainability and environmental outcomes, and developing workforce skills (refer to Table 51).

In 2019–20, around 60 firms remained in the program, drawing support to develop capabilities, undertake research and product development, and invest in new equipment. The ATS is part of a suite of government programs that are helping firms transition from local car manufacturing and workers to reskill for other industries.

Table 50: Assistance paid to ATS participants in the 12 months ending 31 March 2020

Participants

Assistance paid ($)

Automotive component producers

35 438 544

Automotive machine tool producers

2 071 146

Automotive service providers

7 069 430

Total

44 579 120

Table 51: ATS participants’ progress in achieving economic sustainability and developing workforce skills, and environmental outcomes in the 12 months ending 31 March 20201

Economic sustainability

Capability development

81 per cent reported participation in change management processes (up 3 percentage points from the previous year)

Business performance

79 per cent reported improved business performance through increased productivity (up 2 percentage points from the previous year)

81 per cent reported finding new customers (down 5 percentage points from the previous year)

Environmental outcomes

Manufacturing process

81 per cent reported better environmental outcomes from improved manufacturing processes (up 6 percentage points from the previous year)

Environmentally sustainable cars

56 per cent reported contributing to the manufacture of more environmentally sustainable cars (same as the previous year)

Workforce skills development

Applicable post-school qualifications2

Of the ATS registrant workforce with post-school qualifications:

  12 per cent of ATS participants’ workforces had certificate I and II qualifications (up 5 percentage points from the previous year)

  17 per cent had certificate III and IV qualifications (down 7 percentage points from the previous year)

  13 per cent had other trade qualifications (down 2 percentage points from the previous year)

  23 per cent had diplomas or advanced diplomas (up 13 percentage points from the previous year)

  • 35 per cent had bachelor degrees or higher qualifications (down 9 percentage points from the previous year).

Source: ATS participants’ updated business plans provided under r 2.27 of the Automotive Transformation Scheme Regulations 2010.

1 The percentage point change has been determined by comparing this year’s results with a comparable data set from the previous year.

2 The calculations for ‘Applicable post-school qualifications’ include staff with postgraduate or graduate diplomas that were not included in last year’s calculations.

Offshore Petroleum and Greenhouse Gas Storage Act

NOPTA was established on 1 January 2012 as a statutory appointment under section 695A of the OPGGS Act. NOPTA’s main functions are to provide technical advice and information to the Joint Authority (comprising the responsible Commonwealth minister and the relevant state and territory ministers); keep a register of titles; and collect, manage and release data.

NOPTA operates on the basis of full-cost recovery from the offshore petroleum and greenhouse gas industries. NOPTA is co-located with NOPSEMA, and has offices in Perth and Melbourne. In 2019–20, NOPTA:

  • received an updated statement of expectations issued by the responsible Commonwealth Minister. This clarified its role in relation to late-life assets, decommissioning, and continuing to improve data quality, integration and access under the OPGGS Act. NOPTA responded with an updated statement of intent
  • developed and published its Strategic Plan 2020–2023. The plan focuses on six priorities, including integrating data and technology; resource management, collaboration and engagement; external compliance; internal capability; and optimising performance
  • consulted with industry as it began practical initiatives to improve the National Electronic Approvals Tracking System (NEATS), including redeveloping the NEATS external website, and enhancements to the NEATS industry portal to facilitate online submissions and usability
  • commenced a broad review of internal application assessment processes and templates to better streamline advice and recommendations to the Joint Authority
  • facilitated the assessment of applications relating to the Australian Government interim measures to provide flexibility for offshore oil and gas explorers during COVID-19
  • introduced an internal assurance review process to test ongoing adherence to legislative and administrative requirements, and promote continuous improvement
  • progressed an in-depth benchmarking exercise of similar offshore international petroleum resource regulators to compare organisational design, scale and function
  • continued to collaborate with United Kingdom and Norwegian petroleum regulators on best practice and innovation in resource and data management.

Fuel Quality Standards Act

Section 71 of the Fuel Quality Standards Act 2000 requires the Minister to prepare an annual report on the operation of the Act.

Administration of the Act was transferred from the former Department of the Environment and Energy to the Department of Industry, Science, Energy and Resources in the financial year. This section reports on the operation of the Act for 2019–20.

Purpose of the Act

The Act requires the fuel industry, including fuel suppliers, to supply fuel that meets strict requirements under the fuel quality standards. Fuel quality standards have been made for all grades of petrol, automotive diesel, biodiesel, ethanol E10, ethanol E85 and autogas.

Review of the legislative instruments under the Act

Nine legislative instruments were remade under the Act, taking effect from 1 October 2019. They reflect the Australian Government’s decision to improve fuel quality. The benefits include access to the latest vehicle technology, savings for motorists from more fuel-efficient vehicles, and better health to the community from cleaner air.

Petrol quality will be improved by lowering aromatic content, starting in 2022, and lowering sulfur limits, starting in 2027.

Section 13 approvals Six approvals were granted under section 13 of the Act. They allow fuel suppliers to supply fuels that vary from a fuel standard for a specified reason and period. Since July 2019:

  • one approval was granted to vary the petrol standard, allowing the supply of a specialised racing fuel
  • one approval was granted to vary the automotive diesel standard, allowing specialised diesel fuel supplied under contract to commercial users in underground mining and road transport
  • four approvals were granted to the four major domestic fuel producers (BP, Caltex, Mobil and Viva) to vary the automotive diesel standard, to assist refineries in managing operational issues associated with the COVID-19 crisis.

Compliance and enforcement The National Measurement Institute conducts monitoring, compliance and enforcement activities to detect and respond to non-compliance under the National Measurement Act 1960 and Fuel Quality Standards Regulations 2019.

Table 52 provides statistics from the past four years. During 2019–20, the department engaged with 274 retail fuel sites. Where non-compliance was detected, the department acted to ensure the supply of fuel was compliant with the requirements of the Act.

Table 52: Statistics on fuel sampling under the Fuel Quality Standards Act 2000, 2015–16 to 2019–20

Actions

2015–16

2016–17

2017–18

2018–19

2019–20a

Number of retail fuel sites visited

455

457

311

363

274

Number of compliant tests

1596

1337

778

1380

985

Number of non-compliant tests detected

33

23

16

13

10

Number of ethanol labelling breaches

21

8

4

7

0

Number of documentation requirements breachesb

29

4c

0

0

0

a Due to the COVID-19 pandemic and travel restrictions, the fuel sampling program was suspended between March and June 2020.

b The Act and Regulations require operators of service stations to maintain and keep records for two years, including delivery documentation, stock reconciliation and fuel-testing records in relation to the supply of fuel, at the premises where the fuel is supplied. Fuel suppliers must also provide documentation to the supply site within 72 hours of delivering fuel.

c Section 66 compliance checks only.

Delegation instruments

The delegation instruments for the Minister’s and Secretary’s powers and functions under the Act and Regulations were remade. New instruments were required after the Machinery of Government changes, which transferred responsibility for the Act from the former Department of the Environment and Energy to the Department of Industry, Science, Energy and Resources. The Minister’s delegation instrument was signed on 23 March 2020, and the Secretary’s on 26 March 2020.

Financial information

The department’s 2019–20 operating costs for administering the Act were $2 411 838, including staff salaries and allowances, consultancies, advertising and other related expenses.

Committee

Section 24 of the Act establishes the Fuel Standards Consultative Committee (FSCC). The Minister must consult and/or notify the FSCC of various matters as required by the Act. The FSCC is made up of representatives from the Australian, state and territory governments, fuel producers (including producers of alternative and renewable fuels), car and truck manufacturers, consumers and an environment protection organisation.

Greenhouse and Energy Minimum Standards Act

This section is prepared in accordance with section 175 of the Greenhouse and Energy Minimum Standards Act 2012 (GEMS Act). It covers the operation of the GEMS Act from 1 July 2019 to 30 June 2020. The GEMS Act supports the development and adoption of appliances and equipment that use less energy and result in fewer greenhouse gas emissions than competing products. The GEMS Act commenced on 1 October 2012. It replaced seven overlapping pieces of state and territory legislation and four state regulators with one national regulator. This has simplified the system for manufacturers and importers of regulated appliances and equipment...

Operation

Equipment Energy Efficiency program

The department administers the GEMS Act through the Equipment Energy Efficiency (E3) program and the GEMS Regulator. The E3 program promotes greater energy efficiency for regulated products by enabling consumers to make informed choices to improve energy efficiency and reduce greenhouse gas emissions. The main policy tools the program uses are mandatory Minimum Energy Performance Standards and Energy Rating Labels for appliances and equipment.

Determinations

At 30 June 2020, a total of 22 products were regulated by the program, with 22 determinations in force under the GEMS Act. The determinations are legislative instruments that specify GEMS requirements, including requirements for minimum energy performance standards and energy rating labels for products regulated under the GEMS Act.

Governance

The department and the GEMS Regulator work cooperatively with state and territory agencies to administer the GEMS Act and develop the E3 program under an intergovernmental agreement. Australia also collaborates on energy efficiency standards with New Zealand through a policy framework and funding arrangement for the E3 program, ensuring the greatest net benefit for both countries.

The Energy Efficiency Advisory Team oversees the E3 program and reports to Energy Ministers. The team comprises representatives from the Australian Government, state and territory government agencies and the New Zealand Government.

Service delivery

In 2019–20, the GEMS Regulator approved 5371 applications and responded to 974 enquiries. Registration applications were approved in 1.15 days, on average. Two exemption requests were granted in 2019–20.

A number of enhancements were made to the GEMS Product Registration System in 2019–20 to further streamline the management of registrations and enquiries. They were also necessary to strengthen the cyber-security of the data provided by registrants and prevent accidental payments for incomplete registrations or non-compliant products.

Seven new guidance videos for registering a product in the registration system, focusing on the new Air Conditioner registrations and the Zoned Energy Rating Label, were added to the GEMS Regulator YouTube Channel.

Revenue

In 2019–20, revenue from registration fees was $2 719 270.

The department is reviewing the program registration fees, taking into consideration the recommendations of the legislative review of the GEMS Act.

Achievements

In 2019–20 the Australian Government released the final report of the Independent Review of the Greenhouse and Energy Minimum Standards (GEMS) Act 2012.

The review is a statutory requirement to ensure the GEMS Act remains appropriate and effective in reducing Australia’s energy consumption and greenhouse gas emissions. Ms Anna Collyer, a partner at law firm Allens, undertook the review.

The Final Report provides the findings and recommendations of the independent review. It was informed by submissions, as well as group and one-on-one meetings between the independent reviewer and stakeholders. The report makes a number of recommendations, which the Australian Government will consider before publishing a response.

In 2019–20, replacement Determinations for Refrigerated Cabinets and Household Refrigerating Appliances were registered and published (Australia only). The new 2019 Air Conditioner Determination (up to 65kW) also came into effect, introducing a number of changes including the Zoned Energy Rating Label. The Label provides consumers with better information, enabling them to select an air conditioner that would perform better and save energy, based on where they live.

Consultation undertaken in 2019–20 included seeking feedback on:

  • an issues paper on energy efficiency regulation of electric motors
  • a consultation paper on ‘smart’ demand response capabilities for selected appliances
  • an exposure draft of the Greenhouse and Energy Minimum Standards (Air conditioners over 65kW) Determination 2019.

Impact of COVID-19

In recognition of the significant impact of COVID-19 on Australian businesses and global supply chains, careful consideration was given to planned consultations and forthcoming determinations in the last two quarters of the financial year and how these may impact Australian businesses.

Several consultation processes, including on televisions and electric motors, were deferred. It was agreed that the Equipment Energy Efficiency Review Committee (E3RC) would consider the future timing of consultation on new regulatory proposals under GEMS. E3RC is a formal advisory group that consults with the E3 program on issues affecting industry and consumers.

During COVID-19 the GEMS Product Registration System remained fully operational. Applications, renewals, variations and enquiries continued to be processed in line with the GEMS service commitments under the GEMS Regulator Service Charter. The department also continued its work with the regulated community to help members comply with GEMS Act requirements.

The annual GEMS Stakeholder Survey assessing program performance, usually conducted in May and June, was deferred. However, GEMS officers continued to receive feedback and suggestions, and assist with issues relating to any aspect of the program.

The program’s regular electronic newsletter, The Efficiency Standard, was also put on hold.

GEMS compliance

The GEMS Regulator is responsible for monitoring and enforcing compliance with the GEMS Act. It does this through an intelligence-led, risk-based program that:

  • engages with, and educates, the regulated community
  • monitors compliance through: – check testing – GEMS inspector market surveillance – receiving allegations of suspected non-compliance
  • assesses and investigates non-compliance
  • responds to non-compliance.

During 2019–20, GEMS inspectors participated in nationwide information sessions, attended industry gatherings, and provided compliance advice and feedback to retailers across Australia during GEMS market surveillance activities.

The GEMS Regulator completed check tests of 130 models of 16 GEMS products. Of these models, 96 met GEMS requirements and 34 did not. Among those failing to meet GEMS requirements, the GEMS Regulator:

  • cancelled the registration of 19 models

– and entered into one enforceable undertaking where the registrant agreed to take specific remedial actions

  • took alternative action on 15 models, of which

– 13 models were discontinued and stock became unavailable during the check test processes – the registrants remedied the non-compliance for two of the models.

GEMS inspector market surveillance activities revealed:

  • consistently very high (96%) registration compliance for a range of household GEMS products
  • an overall improvement in labelling compliance compared with 2018–19.

Compliance is now at approximately 94 per cent, with the poorest rates of compliance in television and computer monitor labelling.

The GEMS Regulator regularly receives allegations of non-compliance from consumers, industry, and other government departments. These allegations are assessed and, if appropriate, investigated. During 2019–20 the majority of allegations received were about registration and labelling non-compliance.

Communication The GEMS Regulator assists responsible parties in complying with the GEMS Act. To achieve this, the GEMS Regulator:

  • informs stakeholders about the E3 program and the operation of the GEMS Act
  • informs stakeholders about registration requirements under the GEMS Act, including through the www.energyrating.gov.au
  • responds to queries through emails to the Energy Rating Team
  • coordinates national marketing and communication projects to support new energy efficiency programs and improve existing ones
  • consults with industry and other interested parties on developing and implementing energy labelling and associated programs
  • monitors and reports on program performance, achievements and enforcement.

2019 air conditioner information sessions

In September and October 2019, staff members from the department delivered a series of nationwide information sessions to educate and engage with industry on the new 2019 determination for air conditioners and changes to the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989. The sessions were held in Canberra, Sydney, Brisbane, Melbourne, Adelaide, Perth and Hobart and attended by representatives from manufacturers, suppliers and retailers in the sector.

The sessions provided an opportunity for industry to better understand changes to the regulations and for the department’s staff and industry representatives to meet in person. A recording of one of the sessions was published on the Energy Rating website and the GEMS Regulator YouTube channels.

Material was prepared for the information sessions and affected stakeholders, including:

  • animated videos providing an overview of the new energy rating label for air conditioners in two different lengths, with the longer version providing further detail
  • an A5 hard-copy booklet providing an overview of how to read the new label, questions installers or retailers might be asked and in-store display requirements
  • a hard copy A4 fact sheet on how to read and use the new label.

Website updates

The department and the GEMS Regulator are committed to providing clear communication channels for stakeholders. As part of this process, we make regular enhancements and developments to the Energy Rating Website and the Energy Rating Calculator and Light Bulb Saver apps.

In June 2019, user testing commenced on the Energy Rating website (energyrating.gov.au) to identify potential improvements to the user experience. This evaluation will help ensure we present information to stakeholders in a way that provides them with a modern, seamless and positive experience.

Energy Rating Label

During the first half of 2020 the department undertook market research to establish a baseline understanding of consumer behaviour and attitudes towards energy efficiency. The research also sought to identify the need for and value of the Energy Rating Label in the purchase process for household appliances. Specifically, the research aimed to understand what consumers want and need in energy information for appliances, so possible enhancements could be made to the Energy Rating Label to maximise its effectiveness.

The findings will inform the development of a work plan for the Energy Rating Label.