Bills Digest no. 121 2008–09
Fuel Quality Standards Amendment Bill 2009
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Contact officer & copyright details
introduced: 18 March
House: House of Representatives
Portfolio: Environment, Heritage and the
The Day after Royal
Links: The relevant
links to the Bill, Explanatory Memorandum and second reading
speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
The Fuel Quality Standards
Amendment Bill 2009 (the Bill) implements a small number of
recommendations of the first statutory review of the Fuel
Quality Standards Act 2000, which took place in 2004-05. In
- allows for the process to grant an emergency approval to vary a
fuel standard or fuel quality information standard
- expands the range of conditions that the Minister may attach to
a grant of approval to vary fuel standards
- supplements existing criminal offences by adding a range of
enforcement measures such as civil penalties, infringement notices,
and enforceable undertakings, and
- enhances monitoring powers.
The Fuel Quality Standards Act
2000 (the Act) established a legal framework for the
setting of national fuel quality standards.
The object of the Act, as originally passed, was to regulate the
quality of fuel supplied in Australia in order to:
- reduce the level of pollutants and emissions arising from the
use of fuel that may cause environmental and health problems
- facilitate the adoption of better engine technology and
emission control technology, and
- allow engines to operate more effectively. 
Fuel quality standards have been made for:
The Act is intended to work
alongside relevant State and Territory laws, provided that these
laws are capable of concurrent operation with the Act. The Act does
however allow for regulations to be made to effectively override
State and Territory laws relating to fuel standards, although it
appears no such regulations have been made.
The Act also established the
Fuel Standards Consultative Committee, as an advisory body to
More information about the origin of the Act can be found in the
Information on more current developments can be found on the
relevant part of the Department of Environment, Water, Heritage and
the Arts (DEWHA) website.
The Act was amended by the Fuel Quality Standards Amendment
Act 2003, mainly in order to:
- establish a regulatory framework for fuel labelling in
- create strict liability offences to supplement existing
fault-based offence provisions of the Act.
The impetus for the provision of fuel labelling, and associated
setting of fuel quality information standards, appears to be the
increased blending of ethanol with petrol during the early 2000 s,
and particularly concern about whether consumers were being fully
informed about this at the point of sale. Again, more information
on the 2003 amending legislation can be found in the relevant
Section 72 of the Act requires that an independent review on the
operation of the Act must be undertaken as soon as possible after
the second anniversary of Part 2 of the Act coming into
further reviews at intervals of not more than every five years.
The report of the review (the
2005 report) was released to the Minister in April
2005. There was
no formal government response to the report at the time, although
some of the recommendations only required administrative responses,
and others have been implemented through the Fuel Quality Standards
Amendment Regulations 2008 (No. 1).
The executive summary of the 2005 report stated:
The review found that there is a need both for
ongoing review of resources for fuel sampling and for improved
cost-effectiveness in monitoring and enforcement procedures.
The review concludes that the overall policy
objectives of the Act are being met and should not be altered, but
that the following issues should be addressed:
- Nationally consistent fuel
standards and their application to unincorporated suppliers have
not been achieved in all respects; there is thus a need for
complementary state and territory legislation.
- In order to reinforce the
monitoring and enforcement function of the Act, consideration
should be given to an ongoing review of resources for fuel sampling
and testing, coupled with cost-effective approaches such as the
inclusion of penalty notices.
- In order to ensure fuel
supply in an emergency, a procedure and an emergency provision for
off-specification fuel should be developed.
- To ensure that the
administrative effort required is in keeping with the objects of
the Act, the approvals systems need to be streamlined; and
procedures such as the delegation of duties to [the Department of
Environment and Heritage], notification obligations for Regulated
Persons, and the provision of geographical and seasonal variation
to standards need to be refined.
- In order to address
stakeholder concerns and ensure continued compliance, industry and
community communication and education need to be improved.
Chapter 5 also highlights a range of suggested
options to improve current administration and procedures, such as
revising sampling methods. These options will require further
investigation and review by DEH.
The recommendations are listed in full in Appendix 1 of this
At its meeting of 19 March 2009, the Senate Selection of Bills
Committee decided not to refer the Bill for review.
There appears to have been no commentary on the Bill by interest
groups or the press.
There appears to have been no public commentary on the Bill by
the non-government parties or independents.
The Explanatory Memorandum for the Bill states that the Bill
will have no financial impact.
A key aspect of the Bill relates to the process by which
approvals to vary fuel standards and / or fuel quality information
standards for specified fuel supplies are granted. In particular,
the Bill creates a process for urgent approvals where there is a
threat of a fuel supply shortfall. This measure, which is discussed
below, is in response to recommendation 1 of the 2005 report.
Item 6 replaces existing subsection 13(2) with
new subsections 13(2)-(6).
The Minister may grant an emergency approval if satisfied that a
number of circumstances exist: new subsection
13(2). Notably, these include that the anticipated fuel
shortfall will occur within two weeks, will be due to exceptional
and will have a serious impact on either the interests of consumers
or economic or regional development. However, no approval may be
granted if the Minister has previously granted an emergency
approval in respect of that shortfall : new subsection
The approval is not a legislative instrument under the
Legislative Instruments Act 2003 and hence not
disallowable: new subsection 13(6).
Emergency approvals are for a maximum of 14 days: item
7, new section 13A. However, the Minister may extend an
existing approval if the shortfall will otherwise continue after
the original approval expires and the Minister is satisfied that
the circumstances mentioned above in new subsection 13(2) exist:
item 11, new subsection 17F(1). In addition, under
new subsection 17F(3) the Minister must have
regard to existing 15(1), which sets out the matters that he or she
must take into account of when considering whether to approve a
fuel standard. These are:
- the protection of the environment
- the protection of occupational and public health and
- the interests of consumers, and
- the impact on economic and regional development.
When approving an extension, the Minister may also impose new
conditions, or vary or remove conditions: new subsection
The Minister cannot grant a new section 17F extension unless he
or she consults the Fuel Standards Consultative Committee:
item 15, new subsection 24B(1). No process or
minimum time for such consultation is set out by the Bill. However,
the Minister must have regard to any recommendations made by the
committee on the potential extension: new subsection
24B(2). An extension may also impose new conditions, or
vary or remove any conditions applying to the original subsection
13(2) emergency approval: new subsection 17F(4).
The extension is for a maximum of 14 days: new subsection
13A(4). The Bill is silent on whether an extension is a
legislative instrument under the Legislative Instruments Act
2003, although the Minister s decision must be published in
the gazette as soon as practical, along with the reasons for
Existing paragraph 16(b) makes an approval to vary a standard
relating to supply of specified fuel subject to, amongst other
matters, conditions contained in the approval. Item
10, which inserts new subsection 16(2),
will enable such conditions not to be restricted just to the supply
of fuel . The Explanatory Memorandum comments that this:
will provide the Minister with the power to set
conditions necessary to offset the adverse impacts of an approval
on the environment. For example, this amendment will enable the
Minister to require a company supplying sub-standard fuel under an
approval to fund an air quality monitoring program to monitor air
pollutants which may result from vehicle emissions. While this is
not directly linked to the supply of the fuel, the air quality
impacts arise from the use of the fuel in vehicles.
The above amendment does not seem to have been the subject of
the 2005 report.
Amongst other things, Part 2 supplements existing criminal
offences in the Act by adding a range of enforcement measures such
as civil penalties, infringement notices, and enforceable
As such, these measures relate to recommendation 11 of the 2005
report, although they go beyond the suggestion for on-the-spot
fines for minor offences .
Civil penalties are imposed by courts, but are not criminal
offences, and hence only require the court to be satisfied on the
balance of probabilities (rather than the criminal standard of
beyond reasonable doubt ) that the relevant contravention occurred.
From this perspective, it may make an alleged contravention easier
Item 34, new section 12AA
creates a civil penalty for the supply of fuel that does not comply
with a fuel standard. The elements that have to be proven (on the
balance of probabilities) are essentially the same as the existing
criminal offence in section 12, and the maximum penalty for a
contravention is the same (500 penalty units ($55 000) for an
individual, and 2,500 penalty units ($275,000) for a
Similar civil penalty provisions are introduced to mirror
existing criminal offences for other aspects of the fuel quality
standards regime. These provisions cover:
- Supplying fuel that does not comply with fuel quality
information standards (item 37, new section
- Contravention of conditions of approval (item 40, new
- Supplying fuel without documentation (item 42, new
- Altering fuel the subject of a fuel standard (item 45,
item section 20A)
- Supplying a fuel additive covered by the Register of Prohibited
Fuel Additives (item 47, new section 30A)
- Importing a fuel additive covered by the Register of Prohibited
Fuel Additives (item 49, new section 31A)
The mechanics of the civil penalty scheme are inserted by
item 106, new Division 11. They appear to be
standard in form, and the points below touch on a few key
- Civil penalties are ordered by a court upon application by the
Minister. Applications may be made up to six years
after the actual contravention of the relevant civil penalty
- Persons who aid, abet, counsel, induce, procure a civil penalty
convention, or conspire to contravene one, are taken to have
contravened it and are thus themselves subject to penalty.
- No civil penalty order can be made if the person has already
been convicted of a criminal offence for substantially the same
conduct, nor can criminal proceedings be instituted if a civil
penalty order has been made. If any criminal proceedings are
underway, civil proceedings must be stayed. They can be resumed if
the criminal proceedings are unsuccessful.
- Evidence given by a person in civil proceedings against them is
not admissible in criminal proceedings against them where the
proceedings are in relation to substantially the same conduct.
However, evidence is admissible if the criminal proceedings are in
relation to giving false evidence. Presumably, evidence given in
(unsuccessful) criminal proceedings is admissible in subsequent
- Where the (DEHWA) Secretary suspects on reasonable grounds a
person can give information relevant to an application for a civil
penalty order, they can require that person (other than the
wrongdoer) to give all reasonable assistance in connection with
such an application . A Court may enforce compliance with such a
request and the penalty for failing to give assistance is a maximum
of 30 penalty units.
New Division 12 (item 106)
inserts an infringement notice scheme. A person that is alleged to
have either committed an offence, or contravened a civil penalty
provision, may pay an infringement notice penalty to the
Commonwealth as an alternative to criminal or civil prosecution.
The penalty must not exceed one-fifth of the maximum fine that a
court could impose following a successful prosecution of the
criminal offence or civil penalty provision, as the case maybe.
Infringement notices are issued by inspectors appointed under
the Act. Their payment is voluntary, rather than being imposed by a
court. Payment discharges any liability for the criminal offence or
civil penalty provision, as the case maybe. Payment is not regarded
as admission of guilt.
New Division 13 (item 106) inserts the option
of enforceable undertakings as a further enforcement measure. If
the Secretary considers a person has committed an offence against
the Act or has contravened a civil penalty provision, they may
enter into an undertaking with the relevant person. Such
undertakings may be cancelled by the Secretary, or the person may
withdraw from them or have them varied, although only with the
consent of the Secretary. In cases where the Secretary considers
the person has breached an undertaking, they may seek a variety of
court orders, including an order to comply, or payment of some form
of financial penalty or compensation.
Inspectors appointed under the Act currently have certain powers
under section 41 for the purpose of monitoring compliance with the
Act. Existing subsection 40(2) only allows inspectors to enter
premises (in order to exercise monitoring powers) with either the
permission of the occupier or enter under warrant. Items
54-59 amend the Act to make a differentiation between
exercising section 41 monitoring powers at premises in general, and
exercising new section 41A monitoring powers in
the public area of business premises when the premises are
open to the public [emphasis added]. Under these amendments,
inspectors can enter and exercise new section 41A monitoring powers
in public area of business premises without having a warrant or
seeking the permission of the occupier. However, the occupier may
refuse permission for the inspectors to enter or remain in the
public area of business premises: item 56, new subsection
40(3). The Explanatory Memorandum comments:
The rights of the occupier in relation to
inspectors in these circumstances are consistent with the rights of
the occupier to refuse entry to any member of the public.
Notably, the inspector s new section 41A monitoring powers
include the taking of samples of fuel or fuel additives. Entry into
non-business premises and the non-public area of business premises
continues to be only with permission of the occupier or under
warrant. The issue of inspectors exercising monitoring powers on
business premises was dealt with by recommendation 10 of the 2005
The review panel recommends that fuel emergencies which
potentially affect fuel quality should, as far as possible, be
dealt with under purpose-designed provisions under the Fuel
Quality Standards Act 2000. An emergency provision should be
included to allow the Minister to grant an approval if satisfied
that the following criteria are met:
There is an emergency potentially affecting fuel
quality and it is appropriate to deal with it under this law rather
The Fuel Standards Consultative Committee and the
National Oil Supply Emergency Committee have been consulted to the
extent practicable give the nature of the emergency.
The overall balance of public interest lies in
granting an approval.
Appropriate disincentives, such as cost penalties, should be
developed to ensure that the potential for a relaxation of fuel
quality standards is not abused by fuel companies.
Once the review of Liquid Fuel Emergency Act is
finalised, DEH will develop appropriate policy and procedures for
approvals related to fuel emergencies. This will ensure that
provisions of the Liquid Fuel Emergency Act and the Fuel Quality
Standards Act are consistent and are cross-referenced. These
procedures would be revised should the recommendation above be
The review panel recommends that there be no change to the
current operation of the Act (regarding external territories:
The review panel recommends that discussions be instituted with
the states and territories on regulation of Reid Vapour Pressure,
with a view to introducing a national standard that takes into
account climatic and seasonal factors as appropriate.
The review panel recommends that approvals of a minor nature be
The review panel recommends that the Regulated Persons provision
The review panel recommends no
change to the current operation of the Act (regarding
test methods: regulation 21).
The review panel recommends
non-statutory consultations before the making of
The review panel recommends that the section on expert advisers
The review panel recommends that the Act be amended to empower
contractors to collect samples of fuel.
The review panel recommends that the Act be amended to remove
the requirement for an inspector to first obtain the occupier s
permission before exercising monitoring powers.
The review panel recommends that the Act be amended to allow for
provision of on-the spot fines for minor offences.
The review panel recommends that the Act be amended by
broadening section 67A to include matters in relation to the
Excise Act 1901.
The review panel recommends that regulation 17 covering the
method of collecting a fuel sample include provisions on
practicability and that a new section 58C be inserted in the Act,
providing for an evidentiary certificate of sampling
The review panel recommends that the definition of fuel be
amended to allow the Minister to make a determination excluding
certain fuels in special circumstances, for example, fuel used in
defence vehicles, from the Act.
The review panel recommends that regulations 5 and 6 be
redrafted to allow the waiver of applications for an approval to be
solely on the basis of financial hardship and that the fee
exemption for Commonwealth, state and territory entities be
The review panel recommends that regulation 24(2) be amended to
include an additional requirement that a record must be available
for access and copying by an inspector at the location of the
supply of fuel.
The review panel recommends no change to the legislation
(regarding synchronisation of fuel and emission standards).
The review panel recommends that the Department of the
Environment and Heritage approach the states and territories with a
view to them passing complementary legislation to achieve national
harmonisation of fuel standards.
The review panel recommends that, resources permitting, an
education campaign be undertaken to fully inform suppliers and
retailers of their responsibilities under the Act. The general
public needs to be advised of the existence of fuel quality
standards and the operation of the Act.
The review panel recommends that the Department of the
Environment and Heritage s database be finalised as soon as
practicable, and the location of retail sites be kept up to date.
The sampling and procedure manual should continue to be updated as
required and should be complemented by workshops. The method for
sampling at depots should be included, when available.
The review panel recommends that the level of resources for fuel
sampling and testing be kept under review to ensure that adequate
resourcing is maintained in order to continue to achieve the
objects of the Act.
Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277
4 May 2009
Bills Digest Service
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