A voluntary offer and undertaking

In the event of serious or continuing non-compliance, we reserve the right to take corrective action. This may include accepting enforceable undertakings.

About enforceable undertakings

An enforceable undertaking is a legally binding agreement between us and a participant. They are one of a number of remedies available to address non-compliance and avoid the need for legal action. Enforceable undertakings are written statements that a person or organisation will do, or stop doing, certain things.

Undertakings represent an effective and efficient means of addressing non-compliance without the necessity of court proceedings. Enforceable undertakings are enforceable through the Federal Court. Breaching an undertaking may result in legal action.

Current enforceable undertakings

This helps scheme participants to understand their obligations and encourages compliance. We will not enter into an enforceable undertaking on the basis that its terms or parties will be confidential. All details of the enforceable undertaking will be made available to the public.

How an undertaking works

An undertaking can be initiated by a scheme participant or result from a discussion with us. It is important to note that an enforceable undertaking is a voluntary agreement. We cannot require a scheme participant to enter into an enforceable undertaking. Furthermore, a scheme participant cannot make us accept one.

We consider each case on its merits and address each instance of non-compliance based on the circumstances. Scheme participants can't use the undertaking to obtain a more favourable outcome.

An enforceable undertaking is different from an undertaking to a court:

● we don't have to start court action before we can accept an undertaking

● if the participant doesn't comply, we can take other regulatory actions or apply to the court for orders.

If we accept an undertaking, it shouldn't be considered as precedent for any future actions we may take.

Entering into an undertaking

Step 1

The scheme participant will discuss the request with the senior manager assigned to their case

Step 2

An authorised senior manager will decide whether to accept or reject the offer

Step 3

The undertaking is drafted and we will negotiate terms with the scheme participant

Step 4

The undertaking takes effect when both parties have signed it

If we are able to accept enforceable undertakings

We will take a number of factors into account when considering whether to approve an offer to enter into an undertaking. These include:

● the impact of the non-compliance on the objectives of the relevant scheme

● the compliance history of the scheme participant

● if the scheme participant is responsible for the non-compliance

● the extent to which the scheme participant is genuinely solving the problem

● whether the scheme participant is making a full commitment to ongoing compliance

● whether the problem has stopped

● whether the agreed outcome would parallel the orders we would seek if enforcement in a court was sought

● our ability to properly monitor compliance with the undertaking.

If the non-compliance was intentional, criminal, or fraudulent, we will likely take stronger compliance action.

Examples of undertakings we may accept

We adapt our approach to suit the specific circumstances of each project.

Terms of an undertaking

We will only accept an enforceable undertaking if the scheme participant makes a commitment to cease the non-compliant conduct and promises not to resume it.

Undertakings must:

● state the name of the scheme participant and the date we accepted the undertaking(s)

● address the non-compliance and specify what caused the non-compliance

● outline clear and measurable actions they will take to prevent or address the non-compliance

● where relevant, rectify any damage or negligence caused by the non-compliance

● make sure that the timeframes for completing specific tasks fit within the agreed duration of the undertaking

● include satisfactory mechanisms for monitoring, reporting and auditing

● be signed by the scheme participant (e.g. company director) and accepted by us.

Changing an undertaking

A scheme participant cannot withdraw or vary an undertaking without our agreement.

Please be advised that we will only consider a request to vary an enforceable undertaking in the following circumstances:

● the variation will not alter the spirit of the original undertaking

● compliance with the original undertaking is found to be impractical

● there has been a material change in the circumstances which led to the original undertaking being given.

Monitoring compliance with undertakings

It is the responsibility of scheme participants to monitor and report on their compliance with the undertaking. They must provide us with progress updates as required by the undertaking.

The undertaking will typically include a compliance monitoring plan. The scheme participant may be required to provide evidence of implementation and independent compliance reports.

Completing an undertaking

When we are satisfied that all parts of the undertaking are complete, we will send the scheme participant a letter to confirm.

Once the scheme is complete, we expect the participant to maintain high levels of compliance. Should there be further instances of non-compliance, we will take stronger action in line with approach to scheme compliance.

Breaches of enforceable undertakings

In the event that we have reason to believe that a scheme participant has not complied with a term of an enforceable undertaking, we will contact the participant.

In addition, we may take further regulatory actions, including:

● applying to the court to enforce the undertaking and make any other appropriate order

● increase scrutiny of applications for BidCarbon removal units

● suspension from our schemes

● removal from our schemes

● civil or criminal prosecution.

We will typically only pursue legal action in the event of a significant breach or failure to fulfil an obligation by a specified deadline.