California Code of Regulations › Title 17 - Public Health › Division 3 - Air Resources › Chapter 1 - Air Resources Board › Subchapter 10 - Climate Change › Article 2 - Mandatory Greenhouse Gas Emissions Reporting › Subarticle 4 - Requirements for Verification of Greenhouse Gas Emissions Data Reports and Requirements Applicable to Emissions Data Verifiers; Requirements for Accreditation of Emissions Data and Offset Project Data Report Verifiers › Section 95133 - Conflict of Interest Requirements for Verification Bodies

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The conflict of interest provisions of
						this section shall apply to verification bodies, lead verifiers, and verifiers
						accredited by ARB to perform verification services for reporting entities. Any
						individual person or company that is hired by a reporting entity to contract
						with a verification body on behalf of the reporting entity is subject to the
						conflict of interest assessment in this article. In such instances, the
						verification body must assess the potential conflict of interest between itself
						and the contracting entity as well as between itself and the reporting entity,
						and must also address the potential conflict of interest between the
						contracting entity and the reporting entity, including a written assessment
						provided and signed by the contracting entity.
(b) The potential for a conflict of interest
						must be deemed to be high where:
(1) The
						verification body and reporting entity share any management staff or board of
						directors membership, or any of the senior management staff of the reporting
						entity have been employed by the verification body, or vice versa, within the
						previous five years; or
(2) Any
						employee of the verification body, or any employee of a related entity, or a
						subcontractor who is a member of the verification team has provided to the
						reporting entity any of the following services within the previous five years:
(A) Designing, developing, implementing,
						reviewing, or maintaining an inventory or information or data management system
						for facility air emissions, or, where applicable, electricity or fuel
						transactions, unless the review was part of providing greenhouse gas
						verification services;
(B)
						Developing greenhouse gas emission factors or other greenhouse gas-related
						engineering analysis, including developing or reviewing a California
						Environmental Quality Act (CEQA) greenhouse gas analysis that includes facility
						specific information;
(C) Designing
						energy efficiency, renewable power, or other projects which explicitly identify
						greenhouse gas reductions as a benefit;
(D) Designing, developing, implementing,
						conducting an internal audit, consulting, or maintaining a GHG emissions
						reduction or GHG removal offset project as defined in the cap-and-trade
						regulation;
(E) Owning, buying,
						selling, trading, or retiring shares, stocks, or emissions reduction credits
						from an offset project that was developed by or resulting reduction credits are
						owned by the reporting entity;
(F)
						Dealing in or being a promoter of credits on behalf of an offset project
						operator or authorized project designee where the credits are owned by or the
						offset project was developed by the reporting entity;
(G) Preparing or producing greenhouse
						gas-related manuals, handbooks, or procedures specifically for the reporting
						entity;
(H) Appraisal services of
						carbon or greenhouse gas liabilities or assets;
(I) Brokering in, advising on, or assisting
						in any way in carbon or greenhouse gas-related markets;
(J) Directly managing any health, environment
						or safety functions for the reporting entity;
(K) Bookkeeping or other services related to
						accounting records or financial statements;
(L) Any service related to development of
						information systems, including consulting on the development of environmental
						management systems, such as those conforming to ISO 14001 or energy management
						systems such as those conforming to ISO 50001, unless those systems will not be
						part of the verification process;
(M) Appraisal and valuation services, both
						tangible and intangible;
(N)
						Fairness opinions and contribution-in-kind reports in which the verification
						body has provided its opinion on the adequacy of consideration in a
						transaction, unless the resulting services will not be part of the verification
						process;
(O) Any actuarially
						oriented advisory service involving the determination of amounts recorded in
						financial statements and related accounts;
(P) Any internal audit service that has been
						outsourced by the reporting entity or offset project operator that relates to
						the reporting entity's internal accounting controls, financial systems or
						financial statements, unless the result of those services will not be part of
						the verification process;
(Q)
						Acting as a broker-dealer (registered or unregistered), promoter or underwriter
						on behalf of the reporting entity;
(R) Any legal services;
(S) Expert services to the reporting entity,
						a trade or membership group to which the reporting entity belongs, or a legal
						representative for the purpose of advocating the reporting entity's interests
						in litigation or in a regulatory or administrative proceeding or
						investigation.
(T) Verification
						services that are not conducted in accordance with, or equivalent to, section
						95133 requirements, unless the
						systems and data reviewed during those services, as well as the result of those
						services, will not be part of the verification process.
"Member" for the purposes of this section means any
						  employee or subcontractor of the verification body or related entities of the
						  verification body. "Member" also includes any individual with majority equity
						  share in the verification body or its related entities. "Related entity" for
						  the purposes of this section means any direct parent company, direct
						  subsidiary, or sister company.
(3) The potential for conflict of interest
						shall be deemed to be high when any staff member of the verification body
						provides any type of non-monetary incentive to a reporting entity to secure a
						verification services contract.
(4)
						The potential for a conflict of interest shall also be deemed to be high where
						any staff member of the verification body has provided verification services
						for the reporting entity except within the time periods in which the reporting
						entity is allowed to use the same verification body as specified in section
						95130(a).