Clean Energy Finance Corporation (Cth) 

Act: Clean Energy Finance Corporation Act 2012 (Cth).¹

Established: The Act establishes the Corporation as a body corporate that must have a seal and may sue and be sued, and notes expressly that the Public Governance, Performance and Accountability Act 2013 applies to it as a corporate Commonwealth entity.

Purpose: Section 3 states the object — to establish the Corporation to facilitate increased flows of finance into the clean energy sector and to facilitate the achievement of Australia's greenhouse gas emissions reduction targets.

Why this factsheet does not ask the usual question

Most articles in this family close by asking whether the body is a prosecuting authority. That question does not apply here, and the reason is worth stating rather than skipping.

The CEFC does not regulate anybody. It invests. It has no enforcement jurisdiction, no offence provisions to prosecute, and no regulated population. It is a corporate Commonwealth entity in the same statutory category as a number of regulators, which shows that the category tells you about legal personality and financial framework — not about function. See Kinds of Commonwealth statutory authority.

The investment function

Section 58 provides that the Corporation's investment function is to invest, directly and indirectly, in clean energy technologies — including in businesses or projects for their development or commercialisation, and in businesses supplying goods or services needed for them.

Section 10 then does something a student should notice: it provides that the Corporation may perform its functions only in accordance with that section, and sets out the constitutional bases on which it may act. The principal basis is the external affairs power, including giving effect to the Climate Change Convention and the Paris Agreement. An express constitutional-limits provision is unusual, and it means a question about what the Corporation may do is partly a constitutional question rather than purely a question of statutory construction.

The Investment Mandate

This is the accountability mechanism worth understanding, because it is not the one that applies to a regulator.

Under s 64 the responsible Ministers — the Minister administering the Act and the Finance Minister — may give the Board directions about the performance of the investment function by legislative instrument, and must give at least one. Those directions together constitute the Investment Mandate.

Three features follow:

• The direction power is exercised over the function, at the level of policy, rather than over a particular transaction.
• Because the Mandate is a legislative instrument, it is registered, published and subject to the scrutiny that attaches to delegated legislation — a different and more visible form of accountability than an internal ministerial instruction.
• It is varied from time to time, so the current instrument must be checked rather than described from memory or from an article.

Where accountability sits

Ministerial direction through the Mandate, the governance and reporting obligations the PGPA Act imposes on corporate Commonwealth entities, and the Board as accountable authority together do the work that enforcement powers and merits review do for a regulator. Asking "who reviews its decisions?" without first asking what kind of decision is in issue — a commercial investment decision is not an exercise of regulatory power over a person — will produce the wrong analysis.

Self-check

• Have I identified the Corporation as a corporate Commonwealth entity, and said what follows for legal personality?
• Have I checked s 10 before assuming the Corporation may act on a given basis?
• Have I read the current Investment Mandate rather than relying on a description of it?