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KIMBERLEY LAND COUNCIL
ABN 96724252047 ICN 21
30 September 2022
Independent Review Panel c/- Department of Climate Change, Energy, the Environment and Water
Via email: ACCUReview@dcceew.gov.au
Submission to the Independent Review of Australian Carbon Credit Units
The KLC is an Aboriginal organisation established in 1978 for the purpose of working for and with Traditional
Owners to get back country, care for country and get control of the future. The KLC’s mandate is driven by its broad membership of Kimberley Aboriginal people, and delivered by a Board of culturally and regionally representative Directors.
As the native title representative body for the region, the KLC has achieved native title determinations across 97 per cent of the Kimberley, and there are currently 30 prescribed bodies corporate (PBCs) in the Kimberley managing native title rights and interests. The KLC works with PBCs to expand capacity and capability, as well as economic development opportunities and activities. The KLC also supports 18 Aboriginal ranger groups through the Kimberley Ranger Network, and conducts a range of land and sea management activities.
The KLC actively facilitates the registration and operation of Indigenous carbon projects on behalf of native title holders and other Kimberley Aboriginal people, including those holding pastoral leases. All projects supported by the KLC are owned directly by Traditional Owners (via the relevant Prescribed Body Corporate (PBC) / Aboriginal
Corporation). All revenue from these projects goes back to the proponents, is re-invested, and contributes directly to the regional economy, Aboriginal employment, PBC governance and capacity development, as well as ongoing and improved project operations and the co-benefits generated as a result.
The KLC has a long history of engaging in climate change policy and carbon method development, working with the
Australian Government on the development of the Carbon Farming Initiative and Emission Reduction Fund (ERF), and sharing experience in implementing carbon projects through the Indigenous Carbon Industry Network (ICIN),
International Savanna Fire Management Initiative (ISFMI), and other national and global forums.
In its representative capacity, the KLC plays a leading role amplifying the views and voices of Kimberley Aboriginal people locally, nationally and internationally. It is in this context that the KLC provides the following submission to the Independent Review of Australian Carbon Credit Units.
Yours sincerely
Tyronne Garstone
Chief Executive Officer
P.O. BOX 2145
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Experience with the ERF – Native title rights and interests
Having played a key role supporting six Indigenous owned and operated savanna fire management projects in the
Kimberley, the KLC has seen the dramatic effect that carbon projects can have on social, cultural, economic and environmental outcomes in a community. This opportunity has been transformative for many communities in the
Kimberley. Unfortunately, these benefits have not been shared equally across the Kimberley, and many communities have missed out due to the treatment of Native Title land in the Carbon Credits (Carbon Farming
Initiative) Act 2011 (the CFI Act). As a result, the ERF needs to address gaps in the protection of native title rights and interests, ensuring that native title is adequately considered, while also driving abatement and ensuring the scheme’s continued integrity, through the following:
Remove the ability to ‘conditionally’ register projects on native title lands (prior to obtaining Indigenous consent)
This is in line with Australia’s obligations under the United Nations Declaration on the Rights of Indigenous People under the Native Title Act 1993. The practice of only seeking approval (consent) after committing to an activity
(through project registration) is neither common nor best business practice, and risks significantly undermining the integrity of the scheme. Within an Indigenous context, it undermines relationships, disempowers Traditional
Owners by precluding free, prior and informed consent (FPIC), and creates a significant power imbalance. During the period between conditional project registration and the project being revoked in a case of non-consent, benefits are not being delivered and more appropriate carbon governance arrangements for the project area cannot be developed.
Resource Native Title Representative Bodies (NTRBs) to provide carbon advice to native title holders approached to provide EIH consent
Providing eligible interest holder (EIH) consent to undertake an ERF project involves committing to a project for up to 100 years. Once consent has been provided there are few opportunities for it to be revoked. Making an informed decision to provide consent means judiciously balancing economic, cultural, technical and legal risks and benefits. Through its carbon program, the Kimberley Land Council has been able to effectively educate and advise native title holders on the opportunities and risks associated with eligible interest holder consent. Other NTRBs, not having developed in-house carbon programs, may lack experience in the legal, technical and commercial dimensions of EIH consent. This puts PBCs at a significant disadvantage in negotiations, as they are unable to source independent advice.
Recognise native title claimants as eligible interest holders
The CFI Act currently provides protections for Registered Native Title Body Corporates (RNTBCs), but not registered claimants. Given that a native title determination does not create new native rights, but confirms the existence
(subject to extinguishment) of existing native title rights, registered native title claimants should be afforded the same rights as native title holders who have received a determination, especially as CFI projects can operate for
25-100 years. This approach would be consistent with the approach taken in the Native Title Act 1993 (Cth), and improve project integrity, as it would ensure future rights holders have given permission (legal right) for and consented to the future potential impact on their land, for example through the application of a carbon maintenance obligation (for a given permanence period).
This means engaging with native title claimants in the same way as with native title holders, prior to project registration. Otherwise, in relation to legal right, where exclusive possession native title is determined after project registration, this may affect whether the project proponent still holds the legal right. In relation to eligible interest
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holder consent, where native title is determined and an RNTBC established prior to the issuance of ACCUs, the
RNTBC will be an eligible interest holder, and must still provide consent.
Clarify that registering sequestration projects is a Future Act
The declaration of a sequestration project gives rise to a statutory power for the Clean Energy Regulator to issue a
Carbon Maintenance Obligation (CMO) over the project. As a CMO has the power to affect native title rights and interests by granting the Clean Energy Regulator a contingent right to control activities over that land area, the declaration of a sequestration project is a Future Act. The native title rights and processes which apply will depend on the application of Part 2, Division 3 of the Native Title Act 1993 (Cth). This should apply to both exclusive and non‐exclusive possession native title areas, as well as in relation to areas where claims have been made but not yet determined, or where no claim has been made but where tenure is non‐exclusive and a claim might be made in the future.
Additionally, s 24MD of the Native Title Act 1993 (Cth) requires that for acts which pass the freehold test, native title holders must be given the same procedural rights as holders of freehold title. Under the CFI, holders of freehold title must provide permission (legal right) for the project to occur (in addition to EIH consent), and therefore native title holders should be given the same right.
It is recommended that an ILUA is the most appropriate form to evidence native title permission for sequestration projects, particularly in light of permanence obligations, as an ILUA binds future generations. The ILUA must be obtained prior to the Future Act which is the project declaration. If an ILUA is not obtained prior to project declaration, the CER is limiting its ability to issue a CMO in the future. This risks undermining the integrity of the
ERF as a whole, as the regulating body is not able to exercise its enforcement powers and thereby ensure carbon stocks remain sequestered. The approach of requiring an ILUA for sequestration projects would bring the carbon industry in line with the practice of other industries operating on native title land, including pastoralism and mining. It would also ensure compliance with the United Nations Declaration on the Rights of Indigenous People.
Consider avenues to allow non-exclusive possession native title holders to become project proponents
While exclusive possession native title holders benefit from provisions which deem them to have the right to register projects, there is no such recognition for non-exclusive possession native title holders, making it difficult for them to participate in the ERF and generate carbon credits. The ERF should recognise the intersection of rights that are recognised by non-exclusive possession native title (such as access, protecting significant sites, gathering resources and performing ceremonies) with ERF methods (particularly savanna burning). This would ensure that native title rights are recognised when the Clean Energy Regulator determines whether the person identified on an application for an ERF project is the project proponent.
Clarify that the Crown does not have legal right and is not an EIH for exclusive possession native title land
Exclusive possession native title includes the right to possess and occupy an area to the exclusion of all others.
Project proponents who hold legal right to carry out a project on the basis that the land is exclusive possession native title land should not be required to seek permission from the Crown to carry out that project.
Experience with the ERF – Access
Land based ERF projects necessarily operate in remote parts of Australia, where access to telecommunications, community facilities and education is limited. This is particularly the case for Indigenous participants, who often live in the most remote, disadvantaged communities in Australia. There are a number of changes which could be made to scheme legislation, and its administration, which could alleviate these disadvantages:
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Improve certification requirements
The Australian National Registry of Emissions Units Regulations 2011 (ANREU Regulations) sets out strict requirements for establishing a persons’ identity. This includes a requirement for certified copies of documents.
While we support the need for robust identity checks, the current list of people who can certify copies of documents is extremely limited compared to comparable legislation. The ANREU Regulations could be amended to allow for certification of copies by persons before whom a statutory declaration may be made under the Statutory
Declarations Regulations 2018. This would reduce the need for participants in remote communities to have to travel to regional centres (and often stay overnight) to get certified copies of documents made.
Improve signing requirements
The Clean Energy Regulator’s Client Portal currently requires forms to be printed and signed with wet ink signatures. This sometimes means that individuals are required to make multiple trips to complete a single form.
Allowing digital signing would alleviate the need to make multiple long-distance trips to complete forms.
Improve visibility
The Australian National Registry of Emissions Units (ANREU) does not allow read-only access to account information and holdings. As a matter of principle, the KLC, as a carbon service provider (but not a project proponent or ACCU holder) would never seek to appoint a KLC staff member to an authorised representative role for its proponents’ ANREU accounts as this could undermine ownership of the account. We currently independently track ACCU holdings in order to provide ACCU sales support services to proponents. There is a risk that our tracking falls out of line with the ANREU account. Providing a facility for read only access would allow the
KLC to properly advise our proponents while ensuring their autonomy in managing ACCU holdings.
Improve consultation
Consultation processes for the ERF often fail to include stakeholders other than carbon service providers. The KLC, along with other land councils and ICIN, endeavours to ensure that Indigenous stakeholders’ voices are heard. It is exceedingly difficult to provide fulsome responses to the complex issues that arise in the ERF when consultation timeframes are short (often less than one month), submission deadlines fall on public holidays and consultation channels favour written responses. Where face-to-face workshops are held, they favour the eastern states, despite the significant proportion of ERF projects (by number, ACCU volume, and area) in WA.
The KLC recommends all bodies involved in administration of the ERF recognise the geographic, technological and cultural challenges that many ERF participants and stakeholders face and commit to more appropriate consultation processes including face-to-face workshops in regional areas across Australia.
Governance of the ERF
As a carbon service provider supporting projects which are internationally recognised for their integrity the KLC supports strong governance of the ERF and believes that the following recommendations will ensure transparency and integrity in administration of the scheme:
Maintain method development functions within the Clean Energy Regulator
The KLC’s experience with method development under the Department of Industry, Science, Energy and Resources
(now DCCEEW) was disappointing. The development of the Carbon Credits (Carbon Farming Initiative—Savanna
Fire Management—Sequestration and Emissions Avoidance) Methodology Determination 2018 was marred by a
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lack of communication and transparent information. Ultimately the KLC and Arnhem Land Fire Abatement (ALFA) commissioned their own investigation of the method, uncovering technical issues which rendered the method unviable for many proponents.
To date the Clean Energy Regulator has endeavoured to improve on this for the development of the new savanna fire management method, holding appropriately timed co-design workshops, field trips and one-on-one consultations with technical experts. While the most recent co-design workshops for the method (scheduled for
July) have been delayed, we understand this is due to delays in development of new carbon accounting tools
(SavCAM) and supporting materials which are the responsibility of DCCEEW.
While there have been some recent claims that co-locating method development and scheme administration functions within the Clean Energy Regulator creates a conflict of interest, we believe this is misguided. Ensuring documentation from the method development process is available to inform interpretation and administration of the method once it has been released is key for creating certainty in the market and ensuring that regulatory decisions are predictable, justified and consistent. Having the same organisation that writes the rules and administers the rules creates a strong incentive for that organisation to create rules that are practical and enforceable.
Move Emissions Reduction Assurance Committee secretariat and ERF auctions and contract functions out of the
Clean Energy Regulator
Emissions Reduction Assurance Committee (ERAC) secretariat functions do not sit well with method development functions. There is a perceived conflict of interest where the Clean Energy Regulator may be seen as setting ERAC’s agenda in a way that prevents them from inquiring about risks to offsets integrity that a new method (or an existing method) may create. There is also a risk that the method development process is directed by ERAC rather than by all ERF stakeholders. Method development and scheme regulatory functions also create conflicts of interest when the Clean Energy Regulator procures ACCUs. The Regulator cannot be seen to be making reasonable judgements about the integrity of projects and ACCUs when it is also responsible for purchasing lowest cost abatement. For this reason we believe procurement of ACCUs should not sit with the Clean Energy Regulator, and may be better placed with an organisation with a financial function, such as the Clean Energy Finance Corporation.
Clarify the governance of supplementary tools and materials
Project proponents are able to invest in project development thanks to the certainty that the CFI Act provides with respect to the applicable methodology determination. Part 9 Division 2 Subdivision E of the CFI Act makes it clear that a project can remain on a methodology determination even if it is revoked or varied after a project is registered.
Many ERF methods are accompanied by tools for calculating abatement (such as FullCAM and SavBAT) and supporting guidance (FullCAM Guidelines, Technical Guidance Documents) which are supplementary to the methodology determination itself. While the KLC appreciates the need for flexibility in setting technical rules and calculations to take advantage of new science and techniques, changes to supporting materials can significantly affect the viability of already running projects. In some cases, such as FullCAM, these tools may be updated for reasons unrelated to the ERF and so it is unclear how ERF stakeholders’ needs are considered when decisions are made. These changes are not subject to the applicable methodology determination provisions in the CFI Act and undermine the certainty that they provide.
To ensure that participants in the ERF have the certainty they need to undertake projects for up to 100 years all organisations involved in administration of the ERF (DCCEEW, CER, ERAC, MAP) should publish clear guidelines explaining who is responsible for updates to supplementary material, as well as setting principles, timelines and processes for updating the materials.
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Rigour and integrity of ERF methods and projects
The KLC supports Indigenous project proponents who benefit from the ERF’s reputation as a high-integrity carbon offsetting scheme. We recognise the importance of quality offsets (particularly those that carry ecological and social benefits) to Australia’s commitment to reach net-zero by 2050. We believe that at least some of the recent criticisms of ERF methods come from a philosophical opposition to offsetting. These criticisms (such as whether clearing would have occurred in the absence of an ERF project) are deliberately crafted to be unfalsifiable in order to maximise controversy and throw the entire concept of carbon offsetting under a cloud. This is deleterious even for high integrity projects which carry significant cultural, social, economic12 and environmental34 benefits such as savanna burning projects.
The KLC believes the best way to address these criticisms is through increased transparency around how abatement is calculated and how the Clean Energy Regulator makes decisions about projects and adopting approaches that encourage scheme participants to share as much information about the integrity and benefits of their projects.
Default approaches to calculating abatement
The KLC believes that all methods should have publicly accessible, conservative, easy to use tools for determining eligible area and calculating abatement (similar to LOOC-C5). These could provide a yardstick with which to measure the performance of projects and could inform Regulator initiated audits. The public could compare the abatement issued to projects using these conservative tools and where there is overperformance (whether at a project or portfolio level) proponents could be held to account in a transparent way.
This has been the case for savanna fire management methods since the beginning of the scheme, with SavBAT6 providing a default map of vegetation across all eligible areas which allows anyone to interrogate the performance of a savanna fire management project with a reasonable degree of certainty. This has served the savanna fire method well, with projects attracting a price premium thanks to the methods’ reputation for high technical integrity.7
Audits and transparency
While the KLC recognises that a key part of many commercial carbon service providers’ value proposition are proprietary techniques for estimating abatement, the current audit framework for ERF audits does not recognise the risk (perceived and actual) that less transparent projects pose. It is impossible for the Regulator to be able to independently assess these different techniques when they often employ different criteria for success.
1
Sangha, K. K., Evans, J., Edwards, A., Russell-Smith, J., Fisher, R., Yates, C., & Costanza, R. (2021). Assessing the value of ecosystem services delivered by prescribed fire management in Australian tropical savannas. Ecosystem Services, 51, 101343.
2
Edwards, A., Archer, R., De Bruyn, P., Evans, J., Lewis, B., Vigilante, T., ... & Russell-Smith, J. (2021). Transforming fire management in northern Australia through successful implementation of savanna burning emissions reductions projects.
Journal of environmental management, 290, 112568.
3
Bowman, D. M., MacDermott, H. J., Nichols, S. C., & Murphy, B. P. (2014). A grass–fire cycle eliminates an obligate‐seeding tree in a tropical savanna. Ecology and evolution, 4(21), 4185-4194.
4
Weier, A., Radford, I. J., Oliveira, S. L., & Lawes, M. J. (2016). Recently but infrequently burnt breeding sites are favoured by threatened Gouldian finches (Erythrura gouldiae). International Journal of Wildland Fire, 25(12), 1281-1290.
5
https://looc-c.farm/
6
https://savbat.environment.gov.au/
7
For a full outline of the technical integrity of savanna fire management projects please see the submission from Arnhem Land
Fire Abatement Limited.
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An audit framework which recognised that projects which deviate from default approaches to determining eligible areas and calculating abatement should be required to make their approaches publicly available and freely accessible for use by the public. Where participants refuse to do this, they should be subjected to increased scrutiny to alleviate some of the technical integrity concerns raised about the ERF.
Publish rulings
The CFI Act and its delegated legislation are highly complex and technical rulesets which often sit at the cutting edge of applied science. The Clean Energy Regulator is regularly required to make project-level judgements on technical and interpretative issues. Outside of the project proponent, there is limited visibility of what rulings the
Regulator has made, and for what reasons. This sets up pitfalls for future proponents who may unknowingly fall afoul of the Regulator’s established interpretations.
Where the Clean Energy Regulator has made a technical or interpretative ruling it should develop a process for making these rulings publicly available. This should include both a high-level explanation of the issue, the
Regulator’s ruling and any consequences which may arise, as well as the reason for the Regulator’s ruling. The
Regulator could borrow from the Australian Tax Office’s rulings to inform its framework.8
ERF Benefits
Offsets projects supported by the KLC carry significant environmental, social and cultural benefits. For Traditional
Owners and Indigenous rangers, ACCUs are merely a way to achieve their self-determined healthy country objectives rather than be beholden to grants and philanthropy. The KLC is hesitant to support ‘top-down’ co- benefits verification frameworks due to the risk that they may well take away this means of self-determination.
There is a risk that any co-benefits framework will devalue the benefits that many projects achieve and the KLC could not support any framework that did not effectively manage this risk. This devaluation could occur through a variety of mechanisms:
• Benefits which are not included in the scheme will not be considered ‘real’ benefits
• Benefits that cannot be measured will not be considered ‘real’ benefits
• Developers will ‘game’ or otherwise design projects to ‘check a box’ under the framework rather than
design the project to maximise benefits determined by the communities and ecosystems that are affected
• Benefits generated by projects run by less advantaged proponents won’t be recognised due to the costs of
verification
• More influential proponents will drive the form, structure and value of different co-benefits to suit their
needs.
The KLC believes the role of Government in co-benefits is to assist buyers to have genuine engagement with project proponents about the benefits of their projects (and the communities that benefit) rather than allowing
‘off-the-shelf’ co-benefits which commodify (and potentially devalue) those benefits. This could include publishing buyer’s guides for ACCUs with co-benefits similar to buyer’s guides published by the Australian Competition and
Consumer Commission.9 The Government could support projects which carry co-benefits to identify and engage with buyers through industry groups like the Indigenous Carbon Industry Network or the Environment Institute of
Australia and New Zealand.
Climate Active
8
https://www.ato.gov.au/general/ato-advice-and-guidance/ato-advice-products-(rulings)/
9
https://www.accc.gov.au/consumers/health-home-travel/buying-or-renting-a-car
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Well-designed international offsetting schemes like Verified Carbon Standard and Gold Standard play an important role in setting internationally recognised standards for offsetting. This does not mean that companies should be able to make claims about achieving carbon neutrality or ‘net-zero’ buy purchasing credits from projects located offshore. This is a colonial approach which will make it harder for developing countries to achieve their own greenhouse gas reduction goals and will artificially deflate the price of emitting greenhouse gases in Australia. KLC does not support allowing Climate Active participants to meet their commitments using offsets generated by projects operating overseas. Requiring Climate Active participants to source credits from Australian projects
(whether through the ERF or a comparable international scheme) will ensure that the cost of greenhouse gas emissions are properly priced.
Future of the ERF
The Kimberley Land Council has been at the front and centre of the Carbon Farming Initiative since the beginning of the scheme, pioneering policy and method development for savanna fire management through its carbon program. This has positioned the KLC to effectively support the interests of Indigenous people as project proponents and as eligible interest holders in third-party carbon projects. The KLC provides site-specific carbon advice to native title holders and produces education materials for scheme participants both independently and through ICIN. Most recently this includes the Carbon Projects: Eligible Interest Holder Consent brochure10 and the
ICIN Seeking Free Prior and Informed Consent from Indigenous Communities for Carbon Projects Guide.11 These contributions bolster the integrity of the ERF and ensure that benefits from carbon projects flow to Indigenous communities.
This was made possible in part through Government support for Indigenous carbon policy and project development, as well as fire management operations. We note that many other Native Title Representative Bodies did not take advantage of this opportunity, often because savanna fire management methods were not viable. This has meant that Indigenous stakeholders in other parts of Australia have been disadvantaged, particularly when it comes to eligible interest holder consent negotiations.
We believe that Native Title Representative Bodies play a key role in the integrity of the Emissions Reduction Fund by ensuring that the rights of Indigenous people, particularly native title holders and native title claimants are protected. Native Title Representative Bodies also play a critical role securing economic, cultural and social benefits for Indigenous people by supporting the registration and management of Indigenous owned carbon projects. We therefore recommend that the Government provides financial support for carbon project development by native title holders, as well as financial resources for Native Title Representative Bodies to provide appropriate, localised carbon advice and educational resources for native title holders and Indigenous communities across Australia.
10
https://www.klc.org.au/s/Carbon-Project-Eligible-Interest-Holder-Consent-booklet.pdf
11
https://www.icin.org.au/resource_files
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