1. Mandatory & Voluntary
Reporting – emerging
trends and managing both
Chair: Wayne Wescott, Member, GRI Australian Advisory Group
Peter McVay, Audit Manager, Performance Audit, Australian Audit Office
Kate Phillips, Senior Associate, Baker & McKenzie
Tim Youngberry, First Assistant Secretary, Financial Reporting and Cash
Management, Department of Finance and Deregulation

2. Peter McVay
Senior Director
Australian National Audit Office
27 March 2012

3.  National Greenhouse and Energy Reporting
Act 2007 came into effect 1 July 2008.
 Administered by Dept of Climate Change &
Energy Efficiency.
 Aims to introduce a single national
reporting framework for data relating to
greenhouse gas emissions, and energy
production.
 2011 - 775 corporations met threshold
levels of emissions for registration.

4.  The 100 corporations with the largest direct
greenhouse gas emissions (Scope 1) account for
over 90% of total direct emissions reported.

5.  The objective of the audit was to assess the
effectiveness of DCCEE’s implementation and
administration of NGERS.
 The audit examined whether DCCEE had effectively
implemented the scheme; managed the integrity,
security and quality of scheme data; streamlined
reporting arrangements in line with the agreement
by governments and monitored industry
compliance with the provisions of the NGER Act.

6.  substantial and complex undertaking.
 challenging operating environment - CPRS 2010-11,
carbon price 2012, emissions trading scheme in 2015.
 workable scheme - a more accurate measurement of
greenhouse gas emissions and energy use compared
to previous surveys and programs.
 a positive relationship with the majority of registered
corporations. Over 50% of corporations indicated
tangible benefits have been obtained from measuring
their GH gases and energy use.

7. These include:
 enhancing the integrity of reported greenhouse
gas emissions and energy use data;
 improving data security;
 better managing compliance with the regulatory
requirements; and
 streamlining reporting obligations as intended
by COAG.

8.  Data integrity critical to the objectives of the NGER Act.
 Data quality of reports over the first two years of NGERS:
 material errors and gaps in the data;
 Year 1 (2008-09) more than half of all reports to the department
contained minor mistakes and about one per cent had major
errors; and
 Year 2 (2009-10) the department undertook a more in-depth
validation process. Of the 545 reports analysed, 72% contained
errors - 17% with serious material errors.
 manual spreadsheet problem, poor record keeping, problems
with contractors and lack of materiality threshold.
 Resubmission process and data quality improvement
strategy introduced by DCCEE to fix problems.

9.  Strict provisions in the legislation to protect data security.
 ANAO used IT consultant and conducted a penetration test.
 40 technical recommendations to DCCEE.
 8 recommendations classified as high priority.
Recommendations being implemented by DCCEE.
 Security concerns related to matters such as:
 formalising the security patch management process;
 hardening the protection of the servers running online reporting;
 limiting administrator access and privileges within the online
reporting environment; and
 ensuring that there is an adequate security around the network of
private service providers with administrator access.

10.  Streamlining Protocol signed by Prime Minister and Premiers in
July 2009.
 designed to reinforce objective of NGER Act to reduce
duplication and create a single national reporting framework
(e.g. 15 reports to reduce to one).
 No progress with most state governments after two
years; (Only QLD, NT & ACT have agreed; up to 10 reports still
required).
 Tensions over:
 potential conflicts in Commonwealth and state legislation;
 controls over the release of sensitive, commercial-in-confidence
information;
 limited warranties over the quality of data; and
 costs involved for state agencies in meeting Commonwealth
confidentiality and disclosure standards.

11.  Implementation of compliance and audit slower than
planned and constrained by limited resources.
 DCCEE have been effective in achieving compliance
with registration requirements and in achieving a high
rate of reporting.
 2006 cost of compliance estimated at up to $10,000.
 2011 - for most corporations capital costs were from
$5000 and recurrent costs from $1500.
 The top 100 corporations (in terms of emissions)
reported capital costs of up to $3 million and
recurrent costs up to $1.5 million.

12. Three recommendations were made to:
 reduce the compliance costs for industry - consider an
appropriate materiality threshold(s) for reporting by
registered corporations.
 address NGERS data sharing and access issues through a
forum of relevant stakeholders and complete outstanding
memoranda of understanding with data users.
 meet the objectives of Streamlining Protocol by involving
relevant state/territory jurisdictions in progressing the
agreed objective; and consulting with industry
representatives to implement streamlining initiatives and
to identify further streamlining opportunities.
 All recommendations were agreed by DCCEE.

13.  Streamlining and integration;
 Commonwealth/State cooperation;
 Data integrity and assurance;
 Focus on material matters;
 Managing costs of compliance;
 Recognising tangible benefits from measuring energy use
and production; and
 GRI as the basis for greater consistency in reporting
globally?