Federal Register of Legislation - Australian Government

Primary content

A Bill for an Act relating to the environmental management of industrial chemicals, and for other purposes
Administered by: Agriculture, Water and the Environment
For authoritative information on the progress of bills and on amendments proposed to them, please see the House of Representatives Votes and Proceedings, and the Journals of the Senate as available on the Parliament House website.
Registered 08 Dec 2020
Introduced HR 03 Dec 2020
Table of contents.

2019-2020

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

INDUSTRIAL CHEMICALS ENVIRONMENTAL MANAGEMENT (REGISTER) BILL 2020

 

 

EXPLANATORY MEMORANDUM

 

 

 

(Circulated by authority of the Minister for the Environment, the Hon. Sussan Ley MP)


INDUSTRIAL CHEMICALS ENVIRONMENTAL MANAGEMENT (REGISTER) BILL 2020

GENERAL OUTLINE

The Industrial Chemicals Environmental Management (Register) Bill 2020 (the Bill) would establish a national framework to manage the ongoing use, handling and disposal of industrial chemicals, in order to reduce impacts on the environment and limit people's exposure to industrial chemicals.

Industrial chemicals are used widely in a range of products and processes. These include items Australians encounter in their everyday lives such as plastics, paints, fuels, cleaning products, toiletries and cosmetics, as well as commercial and industrial processes such as mining and manufacturing.

Most chemicals in everyday use are of low concern to the environment. However, some chemicals may cause environmental damage if they are not managed appropriately.

Currently industrial chemicals are assessed for health and environmental risks through the Australian Industrial Chemical Introduction Scheme (AICIS) under the Industrial Chemicals Act 2019, which replaced the National Industrial Chemicals Notification and Assessment Scheme (NICNAS) under the Industrial Chemicals (Notification and Assessment) Act 1989 on 1 July 2020. Under AICIS (and formerly NICNAS), scientific risk assessments are undertaken on industrial chemicals proposed to be manufactured in or imported into Australia, and on new uses of industrial chemicals already in Australia. These risk assessments generally include recommendations to prevent harm to the environment and human health from environmental exposure to industrial chemicals.

Under the current regulatory framework for environmental risk management of industrial chemicals, there is no mechanism to consistently implement the recommendations for the management of risks to the environment made by AICIS (this was also the case under NICNAS). This is in contrast to other frameworks for worker and public health and safety, such as the Standard for the Uniform Scheduling of Medicines and Poisons (also known as the Poisons Standard).

Without a national approach, inconsistent implementation of recommendations for managing the risks from the use of industrial chemicals may lead to uncertainty, increased costs for business, and inadequate environmental protection. 

In 2008, the Productivity Commission released its Research Report on Chemicals and Plastics Regulation. This report highlighted that the management of environmental risks from industrial chemicals across jurisdictions was fragmented and inefficient, and less effective than other chemical risk management regimes. The Productivity Commission also found that existing national regulatory arrangements for industrial chemicals did not provide adequate environmental protection.

A key recommendation of the report was the establishment of a standards-setting body to develop nationally consistent risk management decisions for industrial chemicals (Recommendation 9.2).

In July 2015, the Commonwealth and states and territories agreed to establish a National Standard for the environmental risk management of industrial chemicals (the National Standard). The National Standard was intended to provide for a consistent, nation-wide approach to managing the risks that industrial chemicals may pose to the environment.

The National Standard was developed in collaboration with states and territories and consultation with industry stakeholders, and the design was agreed in principle by Environment Ministers in December 2017. More information is available at Australian Government Department of Agriculture, Water and the Environment’s webpage.

The establishment of the National Standard will drive national consistency in the way that environmental risks from industrial chemicals are managed. The risk-based, outcome-focussed standards it establishes will support effective management of the impact of chemicals on the environment using a transparent framework that is straightforward for industry to engage with.

The National Standard will make it simpler and more cost effective for industry to navigate how it manages industrial chemicals, removing the need to engage with multiple, often inconsistent management requirements across Australia.

The Bill provides the legislative basis for establishing the National Standard. The Bill will enable the Minister to:

(a)    establish, by legislative instrument, decision-making principles that set out characteristics for categorising industrial chemicals according to their level of concern to the environment based on their use. The Minister would be required to comply with the decision-making principles when making a scheduling decision.

(b)   make scheduling decisions in relation to an industrial chemical. A scheduling decision can categorise an industrial chemical and set out the controls applicable to the use, handling and disposal of an industrial chemical. Controls may include restrictions or prohibitions on the use or disposal of a chemical.

(c)    consult with the public and states and territories on matters relating to the making, variation or revocation of scheduling decisions or the decision-making principles.

(d)   establish, by legislative instrument, a register of scheduling decisions, which will record all scheduling decisions for industrial chemicals. Scheduling decisions will not be enforceable in and of themselves. Another law of the Commonwealth, or a law of a state or territory, may apply or adopt the Register and may make provision for the implementation and enforcement of the Register.

(e)    establish the Advisory Committee on the Environmental Management of Industrial Chemicals. The functions of the Advisory Committee would include advising the Minister about matters relating to the making, variation or revocation of scheduling decisions, the Register or the Principles.

(f)    provide mechanisms for sharing information, protecting information, and for the use and disclosure of protected information in limited circumstances.

(g)   delegate the Minister's functions and powers under the Bill.

(h)   make rules which may contain some additional operational detail of the Bill.

Following the establishment of this legislative framework, and as agreed in 2015, the Commonwealth and states and territories will be responsible for implementation of the scheduling decisions, recorded in the Register, within their jurisdictions. This will drive national consistency in the management of industrial chemicals through a more streamlined, transparent, efficient and predictable approach to environmental risk management, providing better protection for the environment.

FINANCIAL IMPACT STATEMENT

The measures in the Bill are estimated to have a minimal financial impact on the Australian Government Budget. The initial costs of implementing the National Standard have been funded by the measure ‘Environmental Management – the use and disposal of industrial chemicals’ which provides $9.1m for 5 years from 2019/20 (and $1.3 million per year ongoing) to set standards for how industrial chemicals that pose a risk to the environment should be managed through their life cycle. The Bill introduces arrangements to recover the cost of this measure through a levy applied alongside the annual registration charge for chemical introducers under the Industrial Chemicals Act 2019.

regulation impact statement

A Regulation Impact Statement (RIS) was prepared on the Environmental Risk Management of Industrial Chemicals in June 2015. The RIS is attached in full at the end of the Explanatory Memorandum.

 


 

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

The Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

The full statement of compatibility with human rights is attached to this explanatory memorandum.

 


 

INDUSTRIAL CHEMICALS ENVIRONMENTAL MANAGEMENT (REGISTER) BILL 2020

 

PART 1 – PRELIMINARY

GENERAL OUTLINE

1.      Chapter 1 would deal with how the Bill is to be cited (when enacted), when its provisions commence, and the objects of the Bill. Chapter 1 would also set out the Bill’s application to the Crown and external Territories and its relationship with State and Territory laws, contain a dictionary listing every term defined in the Bill and contain substantive definitions for a number of key terms that are signposted in the dictionary.

NOTES ON INDIVIDUAL CLAUSES

Clause 1 – Short title

2.      This clause would provide that the Bill may be cited as the Industrial Chemicals Environmental Management (Register) Act 2020.

Clause 2 – Commencement

3.      Clause 2 would provide that the Industrial Chemicals Environmental Management (Register) Act 2020 will commence on the day after the Bill receives the Royal Assent.

Clause 3 – Objects of this Act

4.      Clause 3 would set out the objects of the Bill.

 

5.      The objects of the Bill would be:

 

a.       to give effect to an intergovernmental scheme involving the Commonwealth and the States that relates to the establishment of nationally consistent standards to minimise risks to the environment from industrial chemicals;

 

b.      to provide for the Government of the Commonwealth, as the national government of Australia, to establish a register of scheduling decisions for relevant industrial chemicals;

 

c.       to provide for the Register to operate as a national scheme, in that another law of the Commonwealth, or a law of a State:

 

                                                  i.      may apply or adopt the Register (with or without modification); and

                                                ii.      may make provision for, or in relation to, its implementation and enforcement, as so applied or adopted;

 

d.      to reflect, through scheduling decisions for relevant industrial chemicals that are included in the Register, the views of the Commonwealth on the controls, including the risk management measures, that should be applied to those chemicals;

 

e.       to regulate the conduct of the Commonwealth, and persons employed or engaged by the Commonwealth, in connection with the Register;

 

f.       to contribute to meeting Australia’s international obligations in relation to industrial chemicals.

 

6.      References to States in the objects of the Bill include the Territories (see definition of State in clause 7).

Clause 4 – Simplified outline of this Act

7.      Clause 4 would provide a simplified outline of the Bill. The simplified outline is included to assist readers to understand the legislative framework that would be established by the Bill. The outline is not intended to be comprehensive. It is intended that readers will rely on the substantive clauses of the Bill.

Clause 5 – Crown to be bound

8.      Clause 5 would provide that the Bill binds the Crown in each of its capacities.

Clause 6 – Extension to External Territories

9.      Clause 6 would have the effect that the Bill will apply to all external Territories.

Clause 7 – Definitions

10.  Clause 7 would provide definitions of key terms that are used throughout the Bill. This clause would also include some ‘signpost’ definitions that refer readers to the clauses in which terms are substantively defined.

 

11.  Key definitions and concepts in the Bill include industrial chemical and the end use for an industrial chemical. Clause 7 would define industrial chemical by reference to the substantive definition of the term in clause 8. Clause 7 would also define the end use for an industrial chemical by reference to its meaning in the Industrial Chemicals Act 2019, being the purpose for which the industrial chemical can be applied. This is a key concept because the end use of an industrial chemical may be specified in a scheduling decision, and may have controls (including risk management measures) attached to it (see clause 11).

 

12.  Clause 7 would also define scheduling decision, for an industrial chemical, by reference to its substantive definition in subclause 11(3).

 

13.  Another key concept for the Bill is Commonwealth risk assessment. A Commonwealth risk assessment would be defined in clause 7 as any of:

 

a.       a report prepared under section 31, 57, 68 or 68A of the repealed Industrial Chemicals (Notification and Assessment) Act 1989; or

 

b.      an assessment statement within the meaning of the Industrial Chemicals Act 2019; or

 

c.       an evaluation statement within the meaning of the Industrial Chemicals Act 2019; or

 

d.     a risk assessment (however described) that is specified in the rules.

14.  The Commonwealth risk assessment will be critical to the scheduling process as it will generally be primary assessment document for an industrial chemical. The most recent relevant Commonwealth risk assessment for an industrial chemical will be a mandatory consideration for the Minister when deciding whether to make, vary or revoke a scheduling decision for that chemical.

 

15.  Another key definition for the Bill is the environment, which would include:

 

a.       ecosystems and their constituent parts, including people and communities; and

 

b.      natural and physical resources; and

 

c.       the quality and characteristics of locations, places and areas,

but would not include the social, economic or cultural aspects of the expression environment.

16.  This concept is key to the scope of the Bill, as the intergovernmental scheme that is given effect by this Bill is intended to manage and minimise the environmental risks posed by industrial chemicals to organisms, including humans. This definition of environment is intentionally broad to ensure that all relevant impacts posed by an industrial chemical (or use of an industrial chemical) are considered, and any identified risks to the physical health of organisms are managed and minimised through the scheduling decision. This is intended to ensure the scheme delivers outcomes that protect organisms (including human beings) that may be impacted by direct exposure to industrial chemicals, as well those that may be impacted by secondary exposure to industrial chemicals through the environment.

 

17.  Some concepts that are key to Part 4 of the Bill (dealing with confidentiality and information sharing) are protected information, confidential information and protected IC information. Protected information would be defined in clause 7 to include both confidential information and protected IC information. Confidential information would mean information in respect of which a person has made a request under clause 42 that the information not be publicly disclosed. Protected IC information would be defined as information that is, or is taken to be, protected information under the Industrial Chemicals Act 2019.

Clause 8 – Meaning of industrial chemical

18.  Clause 8 would define industrial chemical, for the purposes of the Bill, as having the same meaning as in section 10 of the Industrial Chemicals Act 2019.

 

19.  This is a key concept for the Bill, as scheduling decisions will only be able to be made for industrial chemicals (and therefore only industrial chemicals will be included in the Register).

 

20.  Section 10 of the Industrial Chemicals Act 2019 defines industrial chemical as any of the following:

 

a.       a chemical element that has an industrial use;

 

b.      a compound or complex of a chemical element that has an industrial use;

 

c.       a UVCB substance that has an industrial use;

 

d.      a chemical released from an article where the article has an industrial use;

 

e.       a naturally-occurring chemical that has an industrial use;

 

f.       any other chemical or substance prescribed by the rules that has an industrial use,

 

but not a chemical or substance that is prescribed by the rules as not being an industrial chemical.

 

21.  The term industrial use is defined in section 9 of the Industrial Chemicals Act 2019 as a use other than (or in addition to) one of the following uses:

a.      use as an agricultural chemical product (within the meaning of the Agvet Code) or in the preparation of such a product;

b.      use as a veterinary chemical product (within the meaning of the Agvet Code) or in the preparation of such a product;

c.       use as a substance or mixture of substances mentioned in paragraph 5(4)(a) of the Agvet Code (which deals with substances or mixtures of substances prepared by a pharmacist or veterinary surgeon) or in the preparation of such a substance or mixture of substances;

d.      use as a therapeutic good (within the meaning of the Therapeutic Goods Act 1989) or in the preparation of such a good;

e.      use as food intended for consumption by humans or in the preparation of such food;

f.        use as feed intended for consumption by animals or in the preparation of such feed;

g.      any use prescribed by the rules.

 

22.  This would mean that, if rules are made under the Industrial Chemicals Act 2019 prescribing additional chemicals or substances as industrial chemicals, or prescribing a particular chemical or substance (or class of chemicals or substances) not to be industrial chemicals for the purposes of that Act, those chemicals or substances would also be, or not be (as the case may be), industrial chemicals for the purposes of this Bill.

 

23.  Subclause 8(2) would clarify that the Bill will only apply in respect of industrial uses of an industrial chemical. In other words, if an industrial chemical has both industrial uses and non-industrial uses, scheduling decisions will only be able to be made in respect of the industrial uses (or proposed industrials uses) of that chemical.

Clause 9 – Vacancy in the office of an Advisory Committee member

24.  This clause would clarify that, for the purposes of a reference in this Bill to a vacancy in the office of an Advisory Committee member, or a reference in the Acts Interpretation Act 1901 to a vacancy in the membership of a statutory body, there are 8 offices of ‘member of the Advisory Committee’ in addition to the Chair.

 

25.  This means there will be one or more vacancies in the office of an Advisory Committee member whenever there are less than 8 appointed members in addition to the Chair.

PART 2 – REGISTER OF SCHEDULING DECISIONS FOR RELEVANT INDUSTRIAL CHEMICALS

GENERAL OUTLINE

26.  Part 2 of the Bill would provide for scheduling decisions, the Industrial Chemicals Environmental Management Register (the Register), and the decision-making principles.

 

27.  Division 2 of Part 2 of the Bill would set out matters relating to scheduling decisions. It would provide for the Minister to make one or more scheduling decisions for a relevant industrial chemical. A scheduling decision is intended to set out the controls applicable to the use and disposal of an industrial chemical and may include a decision to:

 

a.       list an industrial chemical in a particular Schedule or Schedules of the Register;

 

b.      prohibit or restrict the export, import, manufacture or an end use of an industrial chemical;

 

c.       specify an end use for an industrial chemical;

 

d.      specify one or more risk management measures for an industrial chemical or for an end use of an industrial chemical.

 

28.  In making, varying or revoking a scheduling decision for an industrial chemical, the Minister would be required to comply with the decision-making principles. The decision-making principles would be a legislative instrument and are intended to set out the criteria (called risk characteristics) used to determine which Schedule of the Register an industrial chemical (or use of an industrial chemical) should be listed in, according to its level of concern to the environment.

 

29.  In making, vary or revoking a scheduling decision for an industrial chemical, the Minister would also be required to have regard to a number of mandatory considerations, including the most recent relevant Commonwealth risk assessment, relevant information on the environmental risks posed by the chemical or an end use of the chemical, and any relevant advice provided by the Advisory Committee. Division 2 would also impose public consultation requirements in relation to proposed scheduling decisions. 

 

30.  Once a scheduling decision is made, varied or revoked, that decision would be required to be recorded in the Register.

 

31.  Division 3 of Part 2 of the Bill would set out matters relating to the Register.

 

32.  Division 4 of Part 2 of the Bill would set out matters relating to the decision-making principles, including consultation requirements.

NOTES ON INDIVDUAL CLAUSES

Division 1 – Introduction

Clause 10 – Simplified outline of this Part

33.  Clause 10 would provide a simplified outline of Part 2 of the Bill. The outline is not intended to be comprehensive and has been included to assist readers to understand the substantive provisions of Part 2, rather than to replace these provisions. It is intended that readers will rely on the substantive clauses of the Part 2.

Division 2 – Scheduling decisions for relevant industrial chemicals

Clause 11 – Minister may make scheduling decision for relevant industrial chemical

34.  Clause 11 would provide for the making of scheduling decisions for industrial chemicals, which are intended to be the primary mechanism to apply controls on, for example, the use and disposal of such chemicals.

 

35.  Subclause 11(1) would allow the Minister to make one or more scheduling decisions for an industrial chemical. A scheduling decision would be defined in subclause 11(3) as any of the following:

 

a.       a decision to list the chemical in a particular Schedule or Schedules of the Register;

 

b.      a decision to specify any one or more of the following for a chemical that is listed on the Register:

 

                                                  i.      that the export, import or manufacture of the chemical is prohibited or restricted, in all circumstances or in specified circumstances;

 

                                                ii.      that all or any end uses for the chemical are prohibited or restricted, in all circumstances or in specified circumstances;

 

                                              iii.      one or more end uses for the chemical;

 

                                              iv.      one or more risk management measures for the chemical or for a specified end use of the chemical;

 

c.       a decision relating to the chemical that is of a kind specified in the rules.

 

36.  Industrial chemicals vary widely in their properties and the ways in which they are used. It is therefore appropriate to have a selection of management options available to the Minister in making a scheduling decision. Listing a chemical or end use of a chemical in a Schedule of the Register will indicate the level of concern it poses to the environment. In many cases, few or no risk management measures will be necessary to manage the risks posed by a particular chemical. In some cases, it will be possible to manage the risks posed by certain end uses of a chemical, but not others. When there are significant risks posed by a particular chemical, regardless of end use, and it is not possible to manage those risks, it may be necessary to ban all end uses of the chemical, as well as its import and manufacture. In some instances, such as to comply with Australia’s international obligations, it may also be necessary to ban the export of certain chemicals.    

37.  The Minister would be required to comply with the decision-making principles when making, varying or revoking a scheduling decision (see clause 13).

 

38.  Subclause 11(2) would require the Minister to record all scheduling decisions for an industrial chemical in the Register. This would ensure that all scheduling decisions are recorded in a single, easily accessible repository. The Register is provided for in clause 22 of the Bill.

 

39.  It is anticipated that there will be seven schedules of the Register, based on increasing levels of concern to the environment, reflecting the risk characteristics set out in the decision-making principles.

 

40.  It is intended that all industrial chemicals for which a scheduling decision is made will be listed in one or more Schedules of the Register. It is also intended that an industrial chemical will generally be listed by reference to a particular end use. This is because it will generally be the end use of an industrial chemical that determines the level of concern that chemical poses to the environment, and that has been assessed in a risk assessment (such as a Commonwealth risk assessment undertaken pursuant to the Industrial Chemicals Act 2019). Which Schedule is appropriate for a particular industrial chemical or use of that chemical will depend on the risk characteristics of that chemical. This would be determined by reference to both the inherent characteristics of the chemical and its proposed use.  This means that different end uses of the same chemical could be listed in different Schedules of the Register. This is appropriate because different end uses of an industrial chemical may have different levels of environmental concern associated with them.

 

41.  Generally, it will be the risk management measures that contain the controls on the industrial chemical (or use of the chemical) that the intergovernmental scheme envisages will be implemented and enforced by states and territories (and the Commonwealth) under their own legislation. Subclause 11(6) would clarify the scope of a risk management measure that can be specified in a scheduling decision. A risk management measure may:

 

a.       prohibit or restrict particular conduct or things in all circumstances or in specified circumstances;

 

b.      require particular conduct or things in all circumstances or in specified circumstances;

 

c.       impose an obligation in relation to particular conduct or things in all circumstances or in specified circumstances;

 

d.      apply from or until a particular date or for a particular period.

 

42.  Risk management measures aim to prevent harm to the environment from the use or disposal of an industrial chemical. For example, risk management measures may relate to the protection of land or the marine environment, the protection of surface or ground water, the protection of biodiversity, the storage, handling and containment of the chemical, or the treatment or disposal of the chemical.

 

43.  Scheduling decisions that impose risk management measures will usually relate to a particular end use of the industrial chemical. This means different end uses of an industrial chemical may have different risk management measures imposed. It will often be appropriate to set different controls for different end uses of the chemical, even if both uses are listed in the same Schedule (and even more so when the uses are listed in different Schedules). For example, if an industrial chemical is listed for both its end use in textile dyes and its end use in batteries, it may be appropriate to impose different management controls for the different uses.

 

44.  However, risk management measures may also relate to the chemical itself and apply to all end uses of that chemical. This may be appropriate for risk management measures that deal with, for example, issues such as storage or disposal of the chemical, where the level of concern to the environment is not necessarily tied to the end use of that chemical, but rather to its inherent characteristics.

 

45.  In addition to risk management measures, a scheduling decision may also impose certain controls directly on the industrial chemical, or on all industrial chemicals in a particular Schedule. It is anticipated that this mechanism would be primarily used to implement Australia’s obligations under international conventions relating to high concern chemicals. For instance, a scheduling decision might be made to prohibit the import, export and manufacture of all industrial chemicals listed in Schedule 7, or to only allow the import, export or manufacture of all industrial chemicals listed in Schedule 6 in the circumstances allowed by the relevant conventions. Similarly, a scheduling decision might be made to prohibit or restrict a particular end use of an industrial chemical, or a particular end use of all industrial chemicals listed in Schedules 6 or 7. The power to impose prohibitions or restrictions on the import, export, manufacture or end use of an industrial chemical is not limited to the implementation of Australia’s international obligations, and may also be used in other circumstances where the Minister considers it appropriate.

 

46.  Subclause 11(4) would clarify that, for the purpose of identifying an industrial chemical in a Schedule of the Register, the Minister may identify the chemical in a single way or in multiple ways. For example, a scheduling decision may include one or more of the following identifiers for an industrial chemical:

 

a.       the chemical’s unique numerical identifier assigned by the Chemical Abstracts Service (CAS number) – for example CAS: 7758-99-8;

 

b.      the chemical’s scientific name – for example Copper (II) sulfate pentahydrate;

 

c.       the chemical’s associated or common name – for example Copper (II) sulfate/sulphate, Cupric sulfate/sulphate;

 

d.      the chemical’s molecular formula – for example CuSO4·5H2O.

 

47.  This would ensure that the listed industrial chemical (or class of industrial chemicals) can be accurately identified, and will also aid in the accessibility and transparency of the Register (which is intended to be adopted or applied by jurisdictions). The first note following subclause 11(4) would give some additional examples of ways a chemical might be identified.

 

48.  The chemical name or end use may also be ‘masked’ under the Industrial Chemicals Act 2019 in certain circumstances to protect confidential business information. In such circumstances, clause 14 of the Bill (see below) would require the Minister to identify the chemical by the AACN (short for AICIS approved chemical name) or the end use by the generalised end use (as the case may be), until the period of protection ends. The second note following subclause 11(4) would alert the reader to this requirement.

 

49.  Both the AACN and the generalised end use would be defined in clause 7. Clause 7 would provide that both terms have the same meaning as in the Industrial Chemicals Act 2019. Section 9 of the Industrial Chemicals Act 2019 provides that the AACN means a name for an industrial chemical determined by the Executive Director under paragraph 108(3)(a) of that Act. Section 9 of the Industrial Chemicals Act 2019 also defines generalised end use as a generalised description of an end use for an industrial chemical determined by the Executive Director under paragraph 108(4)(a) of that Act.

 

50.  Subclause 11(5) would clarify that the Minister may make a scheduling decision listing a particular industrial chemical in a particular Schedule of the Register even if it is already included in a class of industrial chemicals that is listed in that Schedule or a different Schedule of the Register. Again, this is to ensure that chemicals can be listed in different Schedules (or the same Schedule) of the Register at the same time by reference to different end uses of that chemical.

 

51.  The Minister would not be required to make a scheduling decision at a particular time, and the Bill does not provide a formal mechanism by which a person may apply to the Minister to make a scheduling decision for an industrial chemical. Rather, it is anticipated that the Minister would generally initiate the processes under this Bill for making one or more scheduling decisions for an industrial chemical in circumstances such as:

 

a.       a Commonwealth risk assessment has been completed for the chemical (outside of this Bill – such as under the framework of the Industrial Chemicals Act 2019);

 

b.      the Minister receives information from a State or Territory, a Commonwealth entity, industry or a member of the public that identifies potential environmental risks associated with a chemical introduction or use;

 

c.       an international regulatory body advises that a chemical is being prohibited or restricted in another country, but the chemical is able to be introduced in Australia without comparable controls;

 

d.      Australia intends to ratify an international convention that imposes controls on one or more industrial chemicals.

 

52.  These examples are not intended to be exhaustive of when a scheduling decision may be made for an industrial chemical, and there may be other reasons that the Minister considers it appropriate to make a scheduling decision.

 

53.  As a scheduling decision will have legislative character, it is not appropriate to be merits reviewable. It will also not be judicially reviewable under the Administrative Decision (Judicial Review) Act 1977.

Clause 12 – Variation or revocation of scheduling decision made for relevant industrial chemical

54.  Clause 12 would allow the Minister to vary or revoke a scheduling decision for a relevant industrial chemical.

 

55.  If a scheduling decision is varied, the Minister would be required to ensure that the varied decision is recorded in the Register. If a scheduling decision is revoked, the Minister would be required to ensure the decision is removed from the Register.

 

56.  Examples of circumstances where the Minister may decide to vary or revoke a scheduling decision include:

 

a.       where new information becomes available about the environmental risks associated with the industrial chemical, the form in which it is proposed to be used, or the proposed use of the chemical;

 

b.      where a relevant risk assessment has been varied or a new risk assessment undertaken;

 

c.       as a result of post-implementation concerns raised by states and territories, such as when monitoring and compliance activities highlight that a particular risk management measure is not achieving the desired outcome;

 

d.      where a ‘masked’ chemical (i.e. an industrial chemical that is identified by an AACN in lieu of its proper name because of a successful application under the Industrial Chemicals Act 2019 for the proper name to be treated as confidential business information) is ‘unmasked’ and it is appropriate to substitute the AACN for the proper name;

 

e.       where a ‘masked’ use of an industrial chemical (i.e. where the use of the chemical is identified by a generalised end use in lieu of its proposed end use because of a successful application under the Industrial Chemicals Act 2019 for the end use to be treated as confidential business information) is ‘unmasked’ and it is appropriate to substitute the generalised end use for the end use;

 

57.  Generally, a variation or revocation of a scheduling decision for an industrial chemical will need to comply with the same requirements as the original making of the scheduling decision. This includes the mandatory considerations in clause 15, the permitted considerations in clause 16 and the public consultation requirements in clause 17. However, the requirements in clauses 15 and 17 will not apply to variations of a minor nature (see subclause 15(2) and 17(3)).

Clause 13 – Compliance with decision-making principles etc

58.  Subclause 13(1) would prevent the Minister from making a scheduling decision for a relevant industrial chemical unless the decision-making principles are in force.

 

59.  Subclause 13(2) would require the Minister, when making, varying or revoking a scheduling decision, to comply with the decision-making principles.

 

60.  The requirement to comply with the decision-making principles reflects that the process is  intended to give effect to an intergovernmental scheme agreed between all Australian jurisdictions, and that the decision-making principles will be prepared in consultation with states and territories as part of the implementation of that agreement. In addition, it will ensure that scheduling decisions are consistent, transparent and predictable.

 

61.  The notes for clause 23 of the Bill deal with the making of the decision-making principles and their intended content.

Clause 14 – Minister must specify AACN, or generalised end use, for industrial chemical in certain circumstances

62.  Clause 14 is intended to deal with the circumstance where the proper name of an industrial chemical, or its proposed end use, have been ‘masked’.

 

63.  This will be the case where the introducer has successfully applied, under the Industrial Chemicals Act 2019, for this information to be treated as confidential business information and not disclosed publicly for a period of five years. Where this is the case, the Executive Director will determine an AACN (short for AICIS approved chemical name) in lieu of the chemical’s proper name, or a generalised end use, in lieu of the proposed end use for the chemical, for that industrial chemical. It is the AACN and the generalised end use that is then published in the Register established under the Industrial Chemicals Act 2019, while the confidential business information period is in effect. Once that period has concluded, the chemical or use becomes ‘unmasked’ and the relevant listing on that Register is varied to substitute the proper name of the chemical or the assessed end use (as the case may be).

 

64.  Subclause 14(1) would have the effect of requiring the Minister, when making, varying or revoking a scheduling decision for an industrial chemical that has had an AACN determined under the Industrial Chemicals Act 2019, to identify the chemical only by the AACN (rather than by its proper name) during the period in which the AACN has effect.

 

65.  Subclause 14(2) would have the effect of requiring the Minister, when making, varying or revoking a scheduling decision for an industrial chemical that has had a generalised end use determined under the Industrial Chemicals Act 2019, to specify the generalised end use (rather than by the end use) during the period in which the generalised end use has effect.

 

66.  The purpose of this provision is to ensure that information that is protected under the Industrial Chemicals Act 2019 is not disclosed under this Bill during the period it is protected, while still allowing scheduling decisions to be made for such industrial chemicals (or end uses of industrial chemicals).

 

67.  Once the protection period under that Act has concluded, it is intended that the relevant scheduling decisions made under this Bill will be varied to substitute the proper name of the chemical or the end use (as the case may be). Such variations will be considered minor variations and will not need to comply with the requirements of clauses 15 and 17 (see subclauses 15(3) and (4) and 17(4) and (5)).

Clause 15 – Minister must have regard to certain matters in making etc. scheduling decision

68.  Clause 15 would set out the mandatory considerations for the Minister when deciding whether to make, vary or revoke a scheduling decision.

 

69.  The mandatory considerations set out in clause 15 would be:

 

a.       the most recent relevant Commonwealth risk assessment for the industrial chemical (if there is one);

 

b.      any relevant risks that the chemical, or and end use of the chemical, poses (or may pose) to the environment and how any such risks may be minimised;

 

c.       any relevant advice given to the Minister by the Advisory Committee;

 

d.      any relevant international obligations Australia has under an international agreement that is specified in the rules;

 

e.       any relevant submissions provided as part of public consultation on the proposed scheduling decision under clause 17 of this Bill.

 

f.       any relevant information given to the Minister under clause 19 or 20 of this Bill;

 

g.      any other matters that are specified in the rules.

 

70.  The matters set out in clause 15 (other than the matters specified in the rules) all refer to ‘relevance’. This means the Minister would only be required to have regard to these matters where they are relevant to the making, varying or revoking of the proposed scheduling decision for the particular industrial chemical. For example, a Commonwealth risk assessment that has been undertaken for a different end use of the same industrial chemical may not be relevant. Similarly, Advisory Committee advice on whether the decision-making principles should be varied may not be relevant to a proposed scheduling decision for a particular industrial chemical.

 

71.  The majority of industrial chemicals to be scheduled under this Bill will have relevant Commonwealth risk assessments, which will be the primary source of information for the Minister on the environmental risks posed by the industrial chemical.

 

72.  Under clause 7, a Commonwealth risk assessment would generally cover a risk assessment conducted under the Industrial Chemicals Act 2019 or its precursor, the Industrial Chemicals (Notification and Assessment) Act 1989. Risk assessments under these Acts are undertaken at a national level, consistent with internationally recognised best practice approaches to scientific assessment of chemical risks and with regard to Australian-specific considerations in determining environmental risks. The definition in clause 7 would also allow other Commonwealth risk assessments to be prescribed in the rules.

 

73.  Commonwealth risk assessments may include recommendations on the level of concern that the industrial chemical (or end use of the chemical) poses to the environment and suggested risk management measures to address the environmental risks identified. These matters will be relevant to which schedule of the Register the Minister decides to list the chemical in, and what risk management measures are imposed. While it is intended that the majority of scheduling decisions will be made consistently with the risk management recommendations in a relevant Commonwealth risk assessment for the chemical, the Minister would have the flexibility to depart from the recommendations where appropriate (such as where additional information or advice supports scheduling the chemical in a higher or lower schedule, or imposing different risk management measures).

 

74.  It is possible that some chemicals will have had more than one relevant Commonwealth risk assessment. For instance, a chemical that was first assessed under the Industrial Chemicals (Notification and Assessment) Act 1989 and was then re-assessed under the Industrial Chemicals Act 2019. In such circumstances, it is considered appropriate that the Minister only be required to have regard to the most recent Commonwealth risk assessment, as it should be informed by the most up to date science. However, he or she will also be able to consider other (less recent) Commonwealth risk assessments as well (see clause 16).

 

75.  The Minister would also be separately required to consider any relevant risks that the chemical, or an end use of the chemical, poses (or may pose) to the environment and how any such risks may be minimised. Relevant environmental risks may range from local impacts at the point of discharge or on a particular species, to broader risks such as biodiversity decline or ecosystem damage.

 

76.  While this information will generally be included in the relevant Commonwealth risk assessment for the industrial chemical, the purpose of listing it as a separate mandatory consideration is to ensure that, when making, varying or revoking a scheduling decision for an industrial chemical, both:

 

a.       the environmental risks are considered, even when not included in a relevant Commonwealth risk assessment (including when there is no relevant Commonwealth risk assessment for the industrial chemical); and

 

b.      any other relevant information on the environmental risks posed by the chemical (or use of the chemical) is also considered, in addition to the information included in the relevant Commonwealth risk assessment. For example, this might include information on the environmental risks of a chemical obtained during consultation with state and territory Environment Ministers on the proposed scheduling decision. It will be a matter for the Minister as to what additional information (if any) is relevant. It is not, however, intended that this provision impose on the Minister a duty to take proactive steps to investigate what the relevant environmental risks of an industrial chemical may be, over and above properly considering the information obtained through the ordinary mechanisms of this Bill.

 

77.  The Minister would be required to have regard to any relevant advice from the Advisory Committee. The Advisory Committee would be an independent expert group established under Part 3 of the Bill and will have the function of, among other things, providing advice on proposed scheduling decisions. 

 

78.  While the Minister will not be required to refer specified matters to the Advisory Committee, it is anticipated that most industrial chemicals that are considered to be of high concern (such as those recommended for inclusion in the proposed Schedules 6 or 7 of the Register) would be referred to the Advisory Committee for advice prior to the making, varying or revoking of a scheduling decision for that chemical. This is because high concern chemicals may be prohibited or restricted in use, and (in any event) are likely to require bespoke risk management measures that are developed on a case-by-case basis, considering a number of factors including the chemical’s properties, relevant environmental risks, socio-economic factors, and Australia’s international obligations (where relevant).

79.  It is also anticipated that advice from the Advisory Committee may be sought in respect of low or medium concern chemicals where the relevant Commonwealth risk assessment is ambiguous or does not cover all aspects or risks, or where the Minister is proposing to depart from the recommendations in the Commonwealth risk assessment.

 

80.  The requirement for the Minister to have regard to any relevant obligations Australia has under an international agreement prescribed in the rules is intended to ensure that scheduling decisions will not be inconsistent with Australia’s international obligations.

 

81.  The requirement for the Minister to have regard to any relevant international obligations Australia has under an international agreement prescribed in the rules is intended to ensure that scheduling decisions will not be inconsistent with Australia’s international obligations, and will instead contribute to Australia meeting those obligations.

 

82.  Subclause 15(2) would have the effect that the matters in clause 15 would not be mandatory considerations for a variation of a scheduling decision that is of a minor nature. Subclauses 15(3) and (4) would clarify that a variation of a scheduling decision that does no more than change the way the chemical or the end use is identified is taken to be a variation of a minor nature. This would allow, for example, variations to the listing of a chemical to correct a typographical error, add an identifier or substitute the proper name of the chemical or the end use (from the AACN or generalised end use) once the protection period has ended, to be made without having to reconsider all the matters set out in clause 15. This is considered appropriate because such variations would not affect the substance of the original scheduling decision.

 

83.  Subclauses 15(3) and (4) are not intended to be an exhaustive statement of what could be characterised as a variation of a minor nature; other proposed variations and their potential effect would need to be assessed on case-by-case basis.


 

Clause 16 – Minister may have regard to certain matters in making etc. scheduling decison

84.  Clause 16 would set out the matters that the Minister may have regard to when deciding whether to make, vary or revoke a scheduling decision. Unlike the matters in clause 15, the matters listed in clause 16 would not be mandatory considerations for the Minister.

 

85.  The discretionary matters set out in clause 16 would be:

 

a.       earlier Commonwealth risk assessments in relation to the chemical;

 

b.      a risk assessment in relation to the chemical that is undertaken by a Commonwealth entity but that does not fall within the definition of Commonwealth risk assessment in clause 7;

 

c.       a risk assessment in relation to the chemical that is undertaken by a State or Territory government body, a foreign government body or a public international organisation;

 

d.      any environmental, social or economic matter that the Minister considers relevant to the making, varying or revoking (as the case may be) of the scheduling decision.

 

e.       any relevant information given to the Minister by an entrusted IC person for the purposes of this Bill;

 

f.       any other matters that are specified in the rules;

 

g.      any other matters the Minister considers relevant.

 

86.   Most new chemicals for which a scheduling decision is made will have had a risk assessment done that is covered by the definition of Commonwealth risk assessment in clause 7. This is particularly the case for chemicals that have been assessed under the framework of the Industrial Chemicals Act 2019.

 

87.  However, it may be that a particular industrial chemical has had more than one Commonwealth risk assessment, or one or more additional risk assessments by different government or international bodies. This is more likely to be the case for older chemicals, or chemicals that have multiple uses. Clause 16 would allow the Minister to have regard to these additional risk assessments, in addition to being required (by clause 15) to consider the most recent Commonwealth risk assessment for the chemical. This will ensure that the Minister can consider information that he or she considers relevant to the scheduling decision, even if it is in an earlier, or non-Commonwealth, risk assessment. For instance, a risk assessment by a State or Territory government body may specifically address environmental risks posed to that jurisdiction, or an international risk assessment may more broadly consider the risks posed by the chemical to the international community.

 

88.  There may also be limited circumstances where the industrial chemical concerned does not have a Commonwealth risk assessment (within the meaning of clause 7). This could be, for example, because the chemical has been exempted from being assessed under the Industrial Chemicals Act 2019, or because its introduction to Australia pre-dated any of the assessments that are covered by the definition of Commonwealth risk assessment. In such circumstances, clause 16 would allow the Minister to consider other risk assessments that have been conducted for the chemical by government or international bodies.

 

89.  Clause 16 would also allow the Minister to have regard to any environmental matters he or she considers relevant to the making, varying or revoking of the scheduling decision. The reference to environmental matters in clause 16 differs from the requirement in clause 15 to consider any environmental risks posed by the industrial chemical or end use of the industrial chemical. The requirement in clause 15 refers to the risk posed by the chemical (or end use of the chemical) generally, whereas clause 16 would allow the Minister to consider any environmental matters (including risks) associated with the scheduling decision itself. For example, the environmental risks that would be associated with listing the chemical in Schedule 4 rather than Schedule 5 or the environmental risks that would be associated with imposing (or deciding not to impose) a particular risk management measure.

 

90.  Clause 16 would also allow the Minister to have regard to any social or economic matters he or she considers relevant to the making, varying or revoking of the scheduling decision. Social and economic matters are particularly likely to be relevant to the scheduling of high concern chemicals, however will not generally form part of a Commonwealth risk assessment (within the meaning of clause 7). Social and economic matters that could potentially be relevant to a scheduling decision include human health and public safety considerations, economic impacts on particular industries, whether there is an essential use for the chemical in Australia, or how the scheduling may impact on the use of other scheduled chemicals.

 

91.  Subclause 16(2) would provide that in determining whether any environmental, social or economic matter is relevant to the making, varying or revoking of a scheduling decision, it is to be assumed that the Commonwealth and each State or Territory has made a law applying or adopting the Register and making provision for, or in relation to, the implementation and enforcement of the Register, as so applied or adopted. The purpose of this provision is to ensure that the consequences of scheduling decisions can be properly considered by the Minister prior to the scheduling decision being made, varied or revoked. This is because a scheduling decision included on the Register does not, in and of itself, have any legal effect in jurisdictions until it is adopted and enforced by the relevant jurisdiction. For example, restricting the use of an industrial chemical by listing it in Schedule 6 would not have any environmental, social or economic impact until the scheduling decision was given effect to, and enforced, by a Commonwealth, State or Territory law.

Clause 17 – Public consultation about scheduling decision for relevant industrial chemical

92.  Subclause 17(1) would require the Minister to undertake public consultation before making, varying or revoking a scheduling decision. This consultation must be conducted by way of a notice on the website of the Department administering the Bill (Environment Department), currently the Government Department of Agriculture, Water and the Environment inviting submissions on the proposed scheduling decision, or the proposed variation or revocation of a scheduling decision, in the manner and timeframe specified in the notice. The timeframe to provide submissions to the Minister must be no less than 20 business days (subclause 17(2)).

 

93.  Public consultation in relation to scheduling decisions is considered necessary and appropriate as:

 

a.       it provides the public with the opportunity to comment on the proposed regulation of an industrial chemical in Australia, which may have environmental, social or economic impacts on the community;

 

b.      it will help ensure the Minister’s decisions are transparent and take into account all relevant information;

 

c.       more targeted consultation (for example, a request for information under clause 19) may not be possible or practical for existing chemicals in use in Australia, as it is unlikely that all manufacturers or users of the chemical would be known.

 

94.  Subclause 17(3) would have the effect that the public consultation requirements in clause 17 do not apply to a variation of a scheduling decision that is of a minor nature. Subclauses 17(4) and (5) would clarify that a variation of a scheduling decision that does no more than change the way the chemical or the end use is identified is taken to be a variation of a minor nature. This would allow, for example, variations to the listing of a chemical to correct a typographical error, add an identifier or substitute the proper name of the chemical or the end use (from the AACN or generalised end use) once the protection period has ended, to be made without having to undertake public consultation again. This is considered appropriate because such variations would not affect the substance of the original scheduling decision.

 

95.  Subclauses 17(4) and (5) are not intended to be an exhaustive statement of what could be characterised as a variation of a minor nature; other proposed variations and their potential effect would need to be assessed on case-by-case basis.

Clause 18 – Consultation about scheduling decision for particular industrial chemical to which assessment certificate relates

96.  Clause 18 would provide an alternative consultation mechanism to clause 17 for the Minister when making scheduling decisions that relate to an industrial chemical for which an assessment certificate has been issued. An assessment certificate would be defined in clause 7 as an assessment certificate within the meaning of the Industrial Chemicals Act 2019.

 

97.  Where the Minister proposes to make a scheduling decision for an industrial chemical for which an assessment certificate has been issued, the Minister would not be required to consult publicly about the making of the scheduling decision, but may still consult the holder of the assessment certificate if he or she considers it appropriate to do so.

 

98.  Mandatory public consultation in these circumstances is not considered necessary. An assessment certificate issued under the Industrial Chemicals Act 2019 relates to the proposed introduction to Australia (by import or manufacture) of a new industrial chemical or a new use of an industrial chemical. The proposed new chemical or use will have already been the subject of consultation under that Act and further public consultation will not generally be considered useful. A newly introduced chemical or use may also be the subject of confidential business information protections, making public consultation inappropriate. However, targeted consultation with the holder of the assessment certificate (the proposed introducer) may still be considered appropriate or necessary in the particular circumstances.

 

99.  Subclause 18(2) would clarify that the public consultation requirements in clause 17 do not apply in such circumstances, unless the Minister determines otherwise. This would allow the Minister to determine that, despite the alternative mechanism provided by clause 18, public consultation may still be appropriate for the making of a scheduling decision for a particular industrial chemical for which an assessment certificate has been issued. This will provide the Minister with flexibility to adapt the level of consultation to the particular circumstances and chemical involved.

 

100.          For example, it may be appropriate for public consultation to occur for a new introduction where the chemical is widely known in the international or Australian community, is not the subject of confidential business information protections, and there is a public interest in whether, or how, it is used in Australia.

Clause 19 – Minister may request information relevant to the making etc. of scheduling decision

101.          Subclauses 19(1) and (2), combined, would allow the Minister to request information from a specific person that is relevant to the making, variation or revocation of a scheduling decision. The request must be made by written notice and may request the information be provided in the manner and timeframe specified in the notice (provided the specified timeframe is not less than 20 days).

 

102.          This power may be used in circumstances where the Minister is aware that a particular person is likely to have access to information that is relevant to a proposed scheduling decision. For example, a request under clause 19 may be made to an introducer of an industrial chemical, a relevant industry body, a Commonwealth body or Department or an independent expert.  The ordinary operation of the Acts Interpretation Act 1901 will ensure that the Minister will be able to exercise this power on more than one occasion in relation to a proposed scheduling decision.

 

103.          Subclause 19(3) would provide that the person may give the Minister information in accordance with the request. The purpose of this provision is to provide a statutory authorisation for the relevant person to provide the information to the Minister, in the event such a disclosure may be prohibited under another law. For example, if the requested information included personal information within the meaning of the Privacy Act 1988, subclause 19(3) would operate as an authorisation for the purposes of Australian Privacy Principle 6.2.

 

104.          However, clause 19 is not intended to be a coercive power, and the Minister would not be able to compel a person to provide information in response to a request made under subclause 19(1).

Clause 20 – Minister may invite persons to give information relevant to the making etc. of scheduling decision

105.          Clause 20 is intended to provide a mechanism for the Minister to make a public call for information relevant to the making, varying or revoking of a scheduling decision. The ordinary operation of the Acts Interpretation Act 1901 will ensure that the Minister will be able to exercise this power on more than one occasion in relation to a proposed scheduling decision.

 

106.          The call for information must be made by way of a notice published on the Environment Department’s website inviting any persons who have specified information (or a specified type of information) that is relevant to the making, variation or revocation of a scheduling decision for a relevant industrial chemical to provide that information to the Minister. The notice may request the information be provided in a specified manner and within a specified timeframe (provided the specified timeframe is not less than 20 days) (subclauses 20(1) and (2)).

 

107.          Subclause 20(3) would provide that a person may give the Minister information in accordance with the invitation. The purpose of this provision is to provide a statutory authorisation for the relevant person to provide the information to the Minister, in the event such a disclosure may be prohibited under another law.

 

108.          However, clause 20 is not intended to be a coercive power, and the Minister would not be able to compel a person to provide information in response to an invitation made under subclause 20(1).

Clause 21 – Consultation with State Environment Ministers

109.          Clause 21 would allow the Minister to consult with State Environment Ministers prior to making, varying or revoking a scheduling decision. As State would be defined in the Bill to include the territories (see clause 7), this clause would also have the effect of allowing consultation with Territory Environment Ministers.

 

110.          Consultation with states and territories prior to making, varying or revoking scheduling decisions is not intended to be mandatory. This is appropriate because the Minister will be required to comply with the decision-making principles when making, varying or revoking a scheduling decision (see clause 13).

 

111.          However, depending on the particular chemical or risks involved, it may be appropriate for the Minister to undertake additional consultation with states and territories (or a particular state or territory) when deciding whether to make, vary or revoke a specific scheduling decision.

 

112.          For instance, consultation with states and territories is likely to be appropriate where the proposed risk management measures require state-specific considerations, or in relation to high concern chemicals (such as those recommended to be included in the proposed Schedules 6 and 7). Such chemicals may require bespoke risk management measures which states and territories will generally not have previously been consulted on.

 

113.          This clause is not intended to limit the matters for which the Minister may consult states and territories for the purposes of the performance of his or her functions and powers under this Bill.

Division 3 – Register of scheduling decisions for relevant industrial chemicals

Clause 22 – Register of scheduling decisions for relevant industrial chemicals

114.          Subclause 22(1) would allow the Minister, by legislative instrument, to establish a register of scheduling decisions for industrial chemicals. It is intended that the Register will be divided into seven Schedules reflecting increasing risk of harm to the environment.

 

115.          Scheduling decisions for industrial chemicals are made by the Minister under clause 11, and are varied or revoked under clause 12. The effect of subclauses 11(2), 12(2) and 12(3) is that any scheduling decision that is made or varied is required to be recorded in the Register, and any scheduling decision that is revoked is required to be removed from the Register.

 

116.          The Register would, therefore, be a comprehensive, accessible and publicly available record of all the controls and measures that are considered appropriate for each industrial chemical that has been the subject of a scheduling decision.

 

117.          The first note following subclause 22(1) would explain that the Minister will be able to vary or revoke the Register in reliance on subsection 33(3) of the Acts Interpretation Act 1901.

 

118.          The second note following subclause 20(1) would explain that, despite being a legislative instrument, the Register would be exempt from disallowance and sunsetting due to the operation of subsections 44(1) and 54(1) (respectively) of the Legislation Act 2003. This is because the enabling legislation for the Register (being this Bill) facilitates the establishment or operation of an intergovernmental scheme involving the Commonwealth and one or more States, and authorises the instrument to be made for the purposes of the scheme.

 

119.          Subclause 22(2) would clarify that the Register may also include explanatory information relating to the Register or a scheduling decision, or any other information specified in the rules. This might include additional information concerning an industrial chemical or its use, descriptions of the Schedules, relevant guidelines or management plans, or additional information that is intended to assist in the interpretation and implementation of the risk management measures specified for a particular industrial chemical.

 

120.          Subclause 22(4) would clarify that the Register does not, of itself, create prohibitions, restrictions or other obligations that are enforceable in judicial or other proceedings. Rather, consistent with the intergovernmental agreement between all Australian jurisdictions, it is intended that each State and Territory (and the Commonwealth) will, under their own laws, adopt or apply the Register and thereby be responsible for implementing and enforcing the contents of the scheduling decisions listed in the Register in their jurisdiction. In other words, the prohibitions and restrictions that are listed in the Register for an industrial chemical will not be enforceable except as they are adopted or applied in the relevant jurisdiction. This is explained in the note following subclause 22(4).

 

121.          It is intended that adoption of the Register by all jurisdictions will deliver greater certainty and consistency in regulation for industrial chemical users and introducers in Australia. It will also allow for better protection of the environment through improved management of the environmental risks posed by industrial chemicals.

 

122.          Subclause 22(3) would override subsection 14(2) of the Legislation Act 2003 by allowing the Register to apply, adopt or incorporate any written material (with or without modification) as in force or existing from time to time. This is appropriate because the types of materials that are likely to be incorporated by reference in the Register (including by way of a scheduling decision) include inter-jurisdictional, international and national environmental management guidelines and management plans. This will be key to ensuring a national, risk-based and consistent approach to the environmental management of industrial chemicals. It may be necessary for such documents to be incorporated as existing from time to time, as changes are likely to be made to these documents over time and it will be important for the Register to remain current and reliable, without the need to amend the Register (and the relevant scheduling decision) to reflect every update in these documents.

 

123.          In adopting non-legislative instruments as existing from time to time, consideration has been given to the fundamental principle of the Legislation Act 2003, and of access to justice, that people are easily able to understand their rights and obligations at law. It is intended that any document incorporated by reference in the Register will be either made available on, or be accessible through, the Environment Department’s website, at no cost.

 

124.          Additionally, in order to comply with paragraph 15J(2)(c) of the Legislation Act 2003, the explanatory statements for the Register will contain a description of the relevant incorporated material and indicate how it may be obtained. This will include details of the Environment Department’s website where the list of incorporated documents will be published.

Division 4 – Decision-making principles

Clause 23 – Decision-making principles

125.          Subclause 23(1) would allow the Minister to determine principles to be complied with in making, varying or revoking scheduling decisions (the decision-making principles).

 

126.          The decision-making principles would be a legislative instrument for the purposes of the Legislation Act 2003 and would be available on the Federal Register of Legislation.

 

127.          The decision-making principles would need to be in force before the Minister is able to make a scheduling decision. The Minister would be required to comply with the decision-making principles when making, varying or revoking a scheduling decision (clause 13).

 

128.          In this respect, the decision-making principles would be the foundation that guides the making, varying and revoking of scheduling decisions. They would provide for a nationally consistent, transparent, predictable and streamlined approach to the environmental risk management of industrial chemicals for governments, industry and the community.

 

129.          It is anticipated that the decision-making principles will set criteria that outline the risk characteristics of the chemicals that are to be listed in each Schedule.

 

130.          It is intended that the risk characteristics would be determined by considering the level of concern to the environment arising from the inherent characteristics, and the proposed use, of an industrial chemical. The risk characteristics would be based on information considered during an environmental risk assessment, such as information relating to the proposed volume and use of the industrial chemical.

 

131.          For example, it is intended a chemical will have Schedule 1 risk characteristics if a risk assessment for the chemical states that the chemical is not hazardous or has an environmental hazard that is categorised as low, and the chemical does not meet the risk characteristics for any other Schedule. It is intended that a chemical will have Schedule 5 risk characteristics if the chemical is persistent and bioaccumlative or is persistent and toxic.

 

132.          It is intended that if an industrial chemical, or a particular use of an industrial chemical, is classified as having the risk characteristics for a particular Schedule, the decision-making principles will require the Minister, when making a scheduling decision for that chemical, to list the chemical (or use of the chemical) in that Schedule of the Register. This will ensure that scheduling decisions are made in a consistent, transparent and predictable way.

 

133.          Different uses of the same industrial chemical may have risk characteristics appropriate to different Schedules of the Register. This is because each proposed use of an industrial chemical may pose different risks to the environment.

 

134.          It is also intended that the decision-making principles will deal with the risk management measures appropriate for chemicals listed in each Schedule of the Register. In particular, it is anticipated that the decision-making principles will be supported by guidance detailing a standard suite of risk management measures for each Schedule that have been developed in consultation with states and territories and key stakeholders.

 

135.          While it is anticipated that the Minister will generally select the appropriate risk management measures for a particular industrial chemical from the standard suite for the relevant Schedule, it is intended that the decision-making principles will provide the Minister with appropriate flexibility. This means that, in some circumstances, the Minister may be able to impose risk management measures for a chemical that would generally fall within the standard suite for a different Schedule, or to tailor risk management measures to address the specific risks associated with a particular industrial chemical or use of the industrial chemical.

 

136.          It is expected that decision-making principles will acknowledge that high concern chemicals (primarily those listed in Schedules 6 and 7) will more often have bespoke risk management measures applied due to the nature of the environmental risks associated with these chemicals.

 

137.          Subclause 23(2) would allow the Minister to vary or revoke the decision-making principles.

 

138.          The note following both subclauses 23(1) and 23(2) would explain that, despite being a legislative instrument, the decision-making principles (and a variation or revocation of the decision-making principles) would be exempt from disallowance and sunsetting due to the operation of subsections 44(1) and 54(1) (respectively) of the Legislation Act 2003. This is because the enabling legislation for the principles (being this Bill) facilitates the establishment or operation of an intergovernmental scheme involving the Commonwealth and one or more States, and authorises the instrument to be made for the purposes of the scheme.

 

139.          Subclause 23(2) would override subsection 14(2) of the Legislation Act 2003 by allowing the decision-making principles to apply, adopt or incorporate any written material (with or without modification) as in force or existing from time to time. This is appropriate because the types of materials that are likely to be incorporated by reference in the decision-making principles include inter-jurisdictional, international and national environmental management guidelines, which will be key to ensuring a national, risk-based and consistent approach to the environmental management of industrial chemicals. It may be necessary for such documents to be incorporated as existing from time to time, as changes are likely to be made to these documents over time and it will be important for the decision-making principles to remain current, without the need to amend the instrument to reflect every update in these documents.

 

140.          This approach will also facilitate scheduling decisions without compromising environmental standards, as it ensures that the Minister must comply with decision-making principles that reflect the most up to date information relevant to the environmental management of industrial chemicals. This will, in turn, increase the probability that scheduling decisions will be appropriate and fit for purpose as they will be based on all relevant information. 

 

141.          In adopting non-legislative instruments as existing from time to time, consideration has been given to the fundamental principle of the Legislation Act 2003, and of access to justice, that people are easily able to understand their rights and obligations at law. It is intended that any document incorporated by reference in the decision-making principles will be either made available on, or be accessible through, the Environment Department’s website, at no cost.

 

142.          Additionally, in order to comply with paragraph 15J(2)(c) of the Legislation Act 2003, the explanatory statements for the decision-making principles will contain a description of the relevant incorporated material and indicate how it may be obtained. This will include details of the Environment Department’s website where the list of incorporated documents will be published.

Clause 24 – Public consultation about decision-making principles

143.          Subclause 24(1) would require the Minister to undertake public consultation before making, varying or revoking the decision-making principles. This consultation must be conducted by way of a notice on the Environment Department’s website inviting submissions on the proposed decision-making principles, or the proposed variation or revocation of the decision-making principles in the manner and timeframe specified in the notice. The timeframe to provide submissions to the Minister must be no less than 20 business days (subclause 24(2)).

 

144.          Subclause 24(1) would also require the Minister, when deciding whether to make, vary or revoke the decision-making principles, to consider any submissions that are made in accordance with the invitation and that are relevant to the proposed making, variation or revocation of the decision-making principles.

 

145.          Requiring public consultation before the Minister makes, varies or revokes the decision-making principles is considered necessary and appropriate to ensure that the principles (including any requirements for scheduling criteria and risk characteristics) remain consistent, appropriate and predictable. Public consultation will allow submissions to be received from industry (including, but not limited to, introducers of chemicals) as well as from environmental experts and the wider community. This will provide the Minister with a broader understanding of the use of the relevant industrial chemicals in the community and the environmental risks associated with that use, and will allow the Minister to make a more informed decision whether to make, vary or revoke the decision-making principles as proposed.

 

146.          Subclause 24(3) would provide that the public consultation requirements in clause 24 do not apply to a variation of the decision-making principles that is of a minor nature. An example of a variation of a minor nature may be a variation to correct a typographical error or to change the name of a Schedule.

Clause 25 – Consultation with State Environment Ministers

147.          Clause 25 would require the Minister to consult with State Environment Ministers prior to making, varying or revoking the decision-making principles. As State would be defined in the Bill to include the territories (see clause 7), this clause would also have the effect of requiring consultation with Territory Environment Ministers.

 

148.          Mandatory consultation with states and territories on the decision-making principles is considered appropriate because the principles are integral to the intergovernmental scheme of nationally consistent standards that would be created by the Bill. All scheduling decisions must comply with the decision-making principles, which are intended to be predictable, transparent and consistent.

 

149.          Subclause 25(2) would have the effect that the requirement to consult with states and territories in clause 25 does not apply to a variation of the decision-making principles that is of a minor nature. An example of a variation of a minor nature may be a variation to correct a typographical error or to change the name of a Schedule.

PART 3 – ADVISORY COMMITTEE ON THE ENVIRONMENTAL MANAGEMENT OF INDUSTRIAL CHEMICALS

GENERAL OUTLINE

150.          Part 3 of the Bill would set out matters relating to the Advisory Committee on the Environmental Management of Industrial Chemicals. The Advisory Committee’s primary role would be to provide independent expert advice to the Minister about matters that have been referred to it, including in relation to scheduling decisions or the decision-making principles.

NOTES ON INDIVIDUAL CLAUSES

Division 1 – Introduction

Clause 26 – Simplified outline of this Part

151.          Clause 26 would provide a simplified outline of Part 3 of the Bill. The outline is not intended to be comprehensive and has been included to assist readers to understand the substantive provisions of Part 3, rather than to replace these provisions. It is intended that readers will rely on the substantive clauses of the Part 3.


 

Division 2 – Establishment and functions of the Advisory Committee

Clause 27 – Advisory Committee on the Environmental Management of Industrial Chemicals

152.          Clause 27 would establish the Advisory Committee on the Environment Management of Industrial Chemicals (the Advisory Committee).

Clause 28 – Functions of the Advisory Committee

153.          Clause 28 would set out the functions of the Advisory Committee. These functions are:

 

a.       to advise the Minister about matters that are referred to the Advisory Committee by the Minister and that relate to the making, variation or revocation of any of the following:

 

                                                  i.      a scheduling decision for a relevant industrial chemical;

 

                                                ii.      the Register;

 

                                              iii.      the decision-making principles;

 

b.      any other functions conferred on the Advisory Committee by the rules;

 

c.       to do anything incidental to the performance of the above functions.

 

154.          The Advisory Committee’s primary role is to provide independent expert advice to the Minister about matters that have been referred to it. While the Minister will not be required to refer specified matters to the Advisory Committee, in practice it is anticipated that most industrial chemicals that are considered to be of high concern (such as those recommended for the proposed Schedules 6 or 7 of the Register) will be referred to the Advisory Committee for advice prior to the making, varying or revoking of a scheduling decision for that chemical. This is because high concern chemicals are likely to require bespoke risk management measures that are considered on a case-by-case basis in light of a number of factors including the chemical’s properties, relevant environmental risks and socio-economic factors and Australia’s international obligations (where relevant).

 

155.          The Minister would be required to have regard to any relevant advice received from the Advisory Committee when making, varying or revoking a scheduling decision (see clause 15).

Division 3 – Membership of the Advisory Committee

Clause 29 – Membership of the Advisory Committee

156.          Clause 29 would require the Advisory Committee to consist of a Chair and at least 3, but no more than 8, other members.


 

Clause 30 – Appointment of Advisory Committee members

157.          Clause 30 would set out matters relating to the appointment of Advisory Committee members.

 

158.          Subclause 30(1) would provide that Advisory Committee members will be appointed on a part-time basis by the Minister by way of written instrument. The note following subclause 30(1) would explain that section 33AA of the Acts Interpretation Act 1901 will then allow for an Advisory Committee member to be reappointed following their initial term in the office.

 

159.          Subclause 30(2) would have the effect that an Advisory Committee member holds office for the period specified in the instrument of appointment, provided that the period is no longer than 5 years.

 

160.          Subclause 30(3) would set out the pre-conditions to being appointed as an Advisory Committee member. A person would only be eligible to be appointed as an Advisory Committee member if the Minister was satisfied that the person has substantial experience or knowledge, and significant standing, in any of the following fields:

 

a.       industrial chemistry;

 

b.      ecotoxicology;

 

c.       environmental risk management;

 

d.      environmental health;

 

e.       human toxicology;

 

f.       applied socio-economic analysis;

 

g.      ecology;

 

h.      chemical regulation;

 

i.        environmental regulation;

 

j.        any other appropriate field of expertise.

 

161.           These fields are considered appropriate given the types of matters that the Advisory Committee will primarily be advising on, particularly in relation to the environmental risks of industrial chemicals and their end uses.

 

162.          The requirement for members to have both substantial experience or knowledge and significant standing in their relevant field reflects the high level of expertise that is considered necessary to provide independent expert advice to the Minister on these matters in the context of an intergovernmental scheme to create consistent national standards for the environmental regulation of industrial chemicals.

 

163.          Subclause 30(4) would require the Minister to ensure that, in appointing the Advisory Committee members, the Advisory Committee has an appropriate balance of experience or knowledge in the above fields. The purpose of this subclause is to ensure that the Advisory Committee’s advice is properly informed by an appropriate range of expertise across the relevant fields.

Clause 31 – Acting appointments

164.          Clause 31 would deal with acting appointments in relation to the Advisory Committee.

 

165.          Subclause 31(1) would allow the Minister to appoint an Advisory Committee member to act as the Chair of the Advisory Committee when the Chair is absent or unable to perform the duties of the Chair, or where there is a vacancy in the office of the Chair. The acting appointment may be for a single period, or for all periods when the Chair is absent or unable to perform his or her duties.

 

166.          Subclause 31(2) would allow the Minister to appoint a person to act as a member of the Advisory Committee when an Advisory Committee member is absent or unable to perform his or her duties as an Advisory Committee member, or where there is a vacancy in the office of Advisory Committee member. The acting appointment may be for a single period, or for all periods when an Advisory Committee member is absent or unable to perform his or her duties.

 

167.          A person who is not a member of the Advisory Committee cannot be appointed to act as the Chair of the Advisory Committee.

 

168.          In addition, a person can only be appointed to act as a member of the Advisory Committee if he or she is eligible to be appointed as a substantive member of the Advisory Committee under clause 30 (subclause 31(3)). This requirement would have the effect of ensuring all acting Advisory Committee members have the appropriate knowledge or experience, and standing, in one or more of the relevant fields. This will ensure the integrity of advice provided by the Advisory Committee to the Minister.

 

169.          The ordinary operation of the Acts Interpretation Act 1901 is also relevant to acting appointments to the Advisory Committee as it has the effect that while an acting appointee is in office (whether as a member of the Advisory Committee or the Chair), that person has all the powers and functions of the holder of the office. This means that persons acting as members of the Advisory Committee, or as the Chair, will be entitled to the same remuneration, and be subject to the same requirements (such as disclosure of potential conflicts of interest), as other members.


 

Clause 32 – Remuneration and allowances

170.          Clause 32 would deal with the remuneration and allowances of Advisory Committee members.

 

171.          Subclause 32(1) would have the effect that Advisory Committee members are entitled to be paid at the rate that is determined by the Remuneration Tribunal or, if no rate has been determined, the amount that is prescribed in the rules. 

 

172.          Advisory Committee members would also be entitled to the allowances prescribed in the rules (subclause 32(2)).

 

173.          Subclause 32(3) would clarify that this clause has effect subject to the Remuneration Tribunal Act 1973. This means that any requirements relating to remuneration determined by the Remuneration Tribunal will apply to members of the Advisory Committee, even if inconsistent with clause 32.

Clause 33 – Leave of absence

174.          Clause 33 would set out the arrangements of leaves of absence from the Advisory Committee.

 

175.          For ordinary members of the Advisory Committee, the Chair may grant a leave of absence. For the Chair of the Advisory Committee, only the Minister will be able to grant a leave of absence. A leave of absence granted under clause 33 would be subject to the terms and conditions that the Chair, or Minister (as the case may be) determines.

Clause 34 – Disclosure of interests to the Minister

176.          Clause 34 would require an Advisory Committee member to give the Minister written notice of all interests (pecuniary or otherwise) that he or she has or acquires and that conflict or could conflict with the proper performance of the member’s functions.

 

177.          This purpose of this clause is to ensure the Minister is aware of any conflicts of interest (or potential conflicts of interest) that may affect the Advisory Committee’s performance of its functions. This will allow the Minister to make an informed decision about the appropriate action to take (if any) to resolve any such conflicts.

Clause 35 – Disclosure of interests to the Advisory Committee

178.          Clause 35 is also intended to avoid potential conflicts of interest.

 

179.          Subclause 35(1) would require Advisory Committee members to disclose to a meeting of the Committee the nature of any interests (pecuniary or otherwise) that he or she has in a matter being considered by the Committee. This disclosure must be made as soon as possible after the member becomes aware of the relevant facts (subclause 35(2)) and must be recorded in the minutes of the relevant Advisory Committee meeting (subclause 35(3)).

 

180.          Subclauses 35(4)-(6) would set out the processes that must be followed by the Advisory Committee once a member has disclosed an interest under subclause 35(1). The general rule would be that the affected Advisory Committee member must not be present during deliberations about the matter and must not participate in any decision of the Committee with respect to that matter.

 

181.          However, an exception may be made if determined by the Committee. Any such determination must be deliberated on and made without the presence or participation of the affected member and must be recorded in the minutes of the relevant Committee meeting. The ability for the Advisory Committee to make an exception to the general rule on a case-by-case basis is considered appropriate due to the potential variance in the nature of a member’s interests and the relevance of that person’s expertise to the matter being considered.

Clause 36 – Other paid work

182.          Clause 36 would prevent an Advisory Committee member from engaging in paid work that conflicts, or could conflict, with the proper performance of the person’s duties as an Advisory Committee member.

 

183.          This requirement is considered appropriate to avoid conflicts of interests and ensure the integrity of the Advisory Committee function under the Bill.

Clause 37 – Resignation

184.          Clause 37 would set out the process for resignation from the Advisory Committee.

 

185.          An Advisory Committee member would be able to resign his or her appointment by giving the Minister a written resignation. The resignation would take effect on the day it is received by the Minister, or on a later day specified in the resignation.

Clause 38 – Termination of appointment

186.          Clause 38 would set out the circumstances in which the Minister may terminate the appointment of an Advisory Committee member. These circumstances include misbehavior, where the member is unable to perform their duties because of physical or mental incapacity, being absent for 3 consecutive meetings without being granted a leave of absence, failure to comply with the requirements of clauses 34, 35 or 36 (dealing with conflicts of interest) and various scenarios relating to bankruptcy or insolvency of the member.

Clause 39 – Other terms and conditions

187.          Clause 39 would allow the Minister to set additional terms and conditions that apply to the office of an Advisory Committee member. Any additional terms or conditions must be determined in writing.

 

188.          Allowing additional terms and conditions to be set by the Minister would provide flexibility to tailor the terms and conditions to specific members or for specific functions, as considered appropriate. It would also allow the Minister to respond to changing circumstances that affect the performance of the Advisory Committee’s functions.

Division 4 – Procedures of the Advisory Committee

Clause 40 – Procedures of the Advisory Committee

189.          Clause 40 would deal with the procedures of the Advisory Committee. Generally, the Advisory Committee will be able to determine its own procedures. However, this will be subject to a direction given by the Minister, which will be able to override the Advisory Committee’s procedures.

 

190.          Subclause 40(3) would clarify that a direction given by the Minister concerning the Advisory Committee’s procedures is not a legislative instrument. This is declaratory of the law and is included to assist readers. It is not intended to be an exemption for the purposes of the Legislation Act 2003.

PART 4 – CONFIDENTIALITY AND INFORMATION SHARING

GENERAL OUTLINE

191.          Part 4 of the Bill would deal with confidential information, the use and disclosure of protected information and other information sharing matters.

 

192.          An entrusted person would not be able to use or disclose protected information unless the use or disclosure is authorised by this Bill, the rules, or another Commonwealth law. Protected information would include both information that was protected under the Industrial Chemicals Act 2019 and information that a person has provided to the Minister under this Bill but has requested not be publicly disclosed.

 

193.          Division 2 of Part 4 would create a regime where a person who provides information to the Minister under this Bill can request that information not be publicly disclosed. If the Minister wants to publicly disclose that information at a later date, he or she would be required to follow the process set out in Division 2 first, which includes a public interest test. The exception is where the information is proposed to be disclosed for one of the other permitted disclosures in Division 3.

 

194.          Division 3 of Part 4 would set out a number of permitted uses and disclosures for protected information.

 

195.          Division 4 of Part 4 would deal with other information sharing matters, including disclosure of protected information and personal information to the Minister by a person who is an entrusted person under the Industrial Chemicals Act 2019.

 

196.          Division 5 of Part 4 would trigger Part 4 of the Regulatory Powers (Standard Provisions) Act 2014 for the purposes of the civil penalty provisions in Part 4 of the Bill (concerning the unauthorised use and disclosure of protected information).


 

NOTES ON INDIVIDUAL CLAUSES

Division 1 – Introduction

Clause 41 – Simplified outline of this Part

197.          Clause 41 would provide a simplified outline of Part 4 of the Bill. The outline is not intended to be comprehensive and has been included to assist readers to understand the substantive provisions of Part 4, rather than to replace these provisions. It is intended that readers will rely on the substantive clauses of the Part 4.

Division 2 – Confidential information

Clause 42 – Request that information not be publicly disclosed

198.          Subclause 42(1) would allow a person who gives information to the Minister in relation to the making, variation or revocation of a scheduling decision to request that the Minister not publicly disclose that information. Subclause 42(2) would set out the requirements for an application under subclause 42(1), including that the request must include a nominated person.

 

199.          Information that is the subject of a request under subclause 42(1) is considered confidential information (see clause 7). Confidential information is a subset of protected information. Protected information would be defined in clause 7 as both protected IC information and confidential information. This means that information that is the subject of a request under subclause 42(1) could only be disclosed in accordance with the authorised disclosures listed in Division 3 of Part 4 (clause 51-61).

 

200.          The purpose of this provision is to allow a person who provides relevant information to the Minister to let the Minister know that they consider the information to be confidential. For example, a person may submit, as part of the public consultation under clause 17 or in response to a request under clause 19 or 20, information about an industrial chemical (or use) that includes commercial information such as test data or manufacturing information. The person may, under subclause 42(1), request that such information be kept confidential. A request under subclause 42(1) can be made at any time, including after the information has been provided to the Minister.

 

201.          That information would be treated in the same way as other protected information unless and until the Minister proposes to publicly disclose that information. In most cases, the Minister would not be intending to publish the information because it would not form part of the scheduling decision that is recorded on the Register. However, there may be circumstances in which the Minister proposes to publish the information to (for example) inform the public of risks to human health or the environment associated with the chemical or use, but where the proposed disclosure does not meet the requirements of clause 60 (which relates to the disclosure of protected information to reduce a serious risk to human health or the environment).

 

202.          If the Minister does later propose to publish the information in question (under clause 61), then he or she would be required to first follow the process set out in clauses 43-49. This process would allow a nominated person to formally apply for the information to be kept confidential and, in the event such an application is made, require the Minister to assess whether the information should be kept confidential in accordance with the public interest test in clause 46.

 

203.          This will mean the Minister would only be required to assess the commercial sensitivity of information submitted in confidence if he or she proposes to publicly disclose that information and the nominated person objects to the disclosure at that time.

 

204.          Clause 42 would only apply to information given directly to the Minister (either under this Bill or another law). This means that (for example) information provided to the Executive Director for the purposes of the Industrial Chemicals Act 2019, which is then later disclosed to the Minister by the Executive Director or an entrusted person under that Act, will not be able to be confidential information for the purposes of the Bill. This is considered appropriate as such information will either already be protected information (and thus will already be protected under the Bill) or will already be able to be publicly disclosed under that Act.

 

205.          For the same reason, a person would not be able to make a request under subclause 42(1) in respect of particular information if:

 

a.       an application had previously been made in respect of the same information under subsection 113(2) of the Industrial Chemicals Act 2019, and the application was not approved; or

 

b.      an application under subsection 113(2) of the Industrial Chemicals Act 2019 could have been made in respect of the information, and was not made in the required timeframe.

 

206.          A person who discloses confidential information otherwise than in accordance with Division 3 would be committing an offence or contravention of a civil penalty provision (clauses 50 and 52).

Clause 43 – Notice of proposed public disclosure of confidential information

207.          Clause 43 would provide the mechanism for the Minister to notify the nominated person in respect of confidential information that he or she proposes to disclose that information publicly under clause 61. The purpose is to provide an opportunity for the nominated person to apply, under clause 44, for the information not to be publicly disclosed.

 

208.          Such a notification must be in writing and must state that:

 

a.       the Minister proposes to publicly disclose the information under clause 61; and

b.      the nominated person may apply under clause 44 for the information not to be publicly disclosed; and

c.       if an application under clause 44 is not made within the time limit specified in the notice, the Minister will be able to publicly disclose the information in accordance with clause 61.

 

209.          The time limit for the nominated person to apply under clause 44 must not be less than 20 business days.

Clause 44 – Application for confidential information not to be publicly disclosed

210.          Clause 44 would provide the mechanism for a nominated person who has received a notice under clause 43 in respect of confidential information to apply for that information not to be publicly disclosed.

 

211.          The note following subclause 44(1) would explain that if the person does not make an application within the time limit specified in the clause 43 notice, the Minister would be able to publicly disclose the information in accordance with clause 61.

 

212.          Subclauses 44(2) and (3) would set out the requirements for an application under clause 44, including that the application must be accompanied by the prescribed fee (if any). These provisions would also clarify that the application may be made by the nominated person alone or jointly with another person.

 

213.          This would allow a joint application to be made where appropriate, for example, where the information in question contains commercial sensitivities relating to more than one person. In such circumstances, a joint application would require the Minister to have regard to the commercial interests of each applicant, rather than just the commercial interests of the nominated person (see subclause 46(2)).

 

214.          Subclause 44(4) would clarify that any fee charged must not be such as to amount to taxation.

 

215.          Subclause 44(5) would create a rule-making power that would allow the Minister to make rules for, or in relation to, the refund, remission or waiver of an application fee that is prescribed in the rules.

Clause 45 – Minister may request further information in relation to application

216.          Clause 45 would allow the Minister to request further information from the nominated person in respect of an application made under clause 45.

 

217.          The request must be made by written notice and could only be made if the Minister needs the further information in order to make a decision on the application.

 

218.          The notice may specify a time limit (of not less than 20 business days) for the nominated person to provide the requested further information. If the nominated person does not provide the requested information within the specified time limit, the application under clause 44 is taken to have been withdrawn. This would mean the information concerned would be able to be disclosed under clause 61.

 

219.          The effect of a failure to provide the requested information within the specified timeframe (including that the information will be able to be disclosed under clause 61) must be set out in the notice.

Clause 46 – Decision on application for confidential information not to be publicly disclosed

220.          Clause 46 would set out matters relating to the Minister’s decision on whether to approve an application made under clause 44 for confidential information not to be publicly disclosed.

 

221.          Subclause 46(1) would require the Minister, on receiving an application under subclause 44(1), to decide whether or not to approve the application.

 

222.          If the Minister decides to approve the application, the confidential information in question would not be able to be publicly disclosed under clause 61. If the Minister decides not to approve the application, the effect would be that the information would be able to be publicly disclosed in accordance with clause 61 (that is, once all review rights in clauses 47 and 48 have expired or been exhausted).

 

223.          Given that this would be a lawful public disclosure, once it has been disclosed under clause 61, the information would then be able to be further disclosed by an entrusted person for any purpose under clause 55.

 

224.          Subclause 46(2) would set out the mandatory considerations for the Minister when deciding whether to approve the application. These would be:

 

a.       whether public disclosure of the confidential information could reasonably be expected to substantially prejudice the commercial interests of an applicant; and

 

b.      whether the prejudice outweighs the public interest in the public disclosure of the confidential information.

 

225.          This is a public interest test, which would require the Minister to balance the potential commercial detriment for an applicant against the public interest in disclosing the confidential information. Whether the expected prejudice to the applicant outweighs the public interest in disclosing the information would be assessed on a case by case basis, and will depend on a number of factors, including the content of the information, the likely consequences of publicly disclosing that information, and the reason for the proposed disclosure.

 

226.          The reference in subclause 46(2) to ‘an applicant’ means that if a joint application is made under clause 44, the Minister would be required to have regard to the commercial interests of each applicant in the joint application (not just the commercial interests of the nominated person).

 

227.           Subclause 46(3) would set out the circumstances in which the Minister would be required to refuse an application made under clause 44. The Minister could not approve an application not to publicly disclose confidential information if the information is:

 

a.       physical and chemical data about a relevant industrial chemical that does not reveal the chemical’s composition; or

 

b.      summaries of data relating to risks to human health or the environment from the export, import, manufacture or use of a relevant industrial chemical.

 

228.          It is appropriate for information falling within subclause 46(3) to not be prevented from being publicly disclosed, because this information is already able to be publicly disclosed under the Industrial Chemicals Act 2019. Preventing its disclosure under this Bill would therefore be ineffective, if it is able to be made public under the Industrial Chemicals Act 2019.

 

229.          Subclauses 46(4) and (5) would set out the Minister’s obligations after deciding to approve or not approve an application made under clause 44.

 

230.          If the Minister approves the application, he or she would be required to notify each applicant in writing of the decision within 14 days.

 

231.          If the Minister decides not to approve the application, he or she would be required to notify each applicant in writing, within 14 days, of:

 

a.       the decision;

 

b.      the reasons for the decision;

 

c.       the effect of clause 61; and

 

d.      information regarding their review rights under clauses 47 and 48.

 

232.          The note following subclause 46(5) would explain that if the Minister decides not to approve the application, he or she cannot publicly disclose the information under clause 61 until the review rights in clauses 47 and 48 are exhausted or have expired. 

Clause 47 – Reconsideration of decision not to approve application for confidential information not to be publicly disclosed

233.          Clause 47 would provide an internal review mechanism in respect of a decision of the Minister under clause 46 not to approve an application to prevent public disclosure of confidential information.

 

234.          Subclause 47(1) would have the effect that an application for reconsideration of the decision may be made by a person whose interests are affected by the decision. Generally, this will be the person or persons who made the application under clause 44. However, it is not restricted to such persons and it may be that another person has interests affected by decision (for example, a third party whose commercial interests would be affected by public disclosure of the confidential information, but who did not join the clause 44 application).

 

235.          Subclause 47(2) would require a request for reconsideration under subclause 47(1) to be made in writing and given to the Minister within 20 business days of receiving notification of the original decision. However, the Minister would be able to allow a longer period.

 

236.          Subclause 47(3) would require the internal review to occur within 70 business days of the request being made. Subclause 47(3A) would require that, in the event that a delegate of the Minister conducts the internal review, that person must not have been involved in the original decision and must be of at least the same level as the original decision-maker. This would also have the effect that if the Minister were the person who made the original decision, he or she would be required to conduct the internal review personally.

 

237.          Subclause 47(4) would require the Minister to either confirm the decision, vary the decision or set the decision aside and substitute a new decision.

 

238.          Subclause 47(5) would provide that the reconsideration decision (whether that is to confirm, vary or make a new decision) takes effect on the day it is made.

 

239.          Subclause 47(6) would require the Minister to provide written notice of the decision, and the reasons for it, to the person who made the request. The note following subclause 47(6) would explain that section 27A of the Administrative Appeals Tribunal Act 1975 also requires the person to be notified of their Administrative Appeals Tribunal review rights.

 

240.          The requirements that apply to the Minister in this clause would also apply to any delegate of the Minister who conducted an internal review.

Clause 48 – Review by Administrative Appeals Tribunal

241.          Clause 48 would provide that applications may be made to the Administrative Appeals Tribunal for external merits review of a reconsideration decision made by the Minister (or a delegate) under clause 47.

 

242.          Subsection 27(1) of the Administrative Appeals Tribunal Act 1975 will operate to limit the persons who may apply to the Administrative Appeals Tribunal for review of a reconsideration decision to those persons whose interests are affected by the decision. An application may be made to the Administrative Appeals Tribunal by or on behalf of such persons.


 

Clause 49 – Disclosure of confidential information under Division 3 not prevented

243.          Clause 49 would have the effect that information that is subject to the protections in Division 2 of Part 4 may still be used or disclosed at any time in accordance with any of the permitted uses and disclosures in Division 3 of Part 4 except for clause 61.

 

244.          The purpose of this provision is to clarify that the protections in Division 2 are not intended to override the permitted uses and disclosures in Division 3.

 

245.          Accordingly, a person may still use or disclose protected information in accordance with a permitted disclosure in Division 3 (other than clause 61) even if, for example, a decision has not yet been made under clause 46 in respect of an application concerning that information, or if a person’s review rights in respect of that information have not yet expired.

Division 3 – Use or disclosure of protected information

Clause 50 – Prohibition on use or disclosure of protected information

246.          Subclause 50(1) would set out a general prohibition on the use or disclosure of protected information by a person who is, or has been, an entrusted person and who obtained the protected information in his or her capacity as an entrusted person.

 

247.          Protected information would be defined in clause 7 as both protected IC information and confidential information. Protected IC information is information that is protected information (or is taken to be protected information) under the Industrial Chemicals Act 2019, while confidential information is information in respect of which a person has made a request under clause 42 not to publicly disclose.

 

248.          An entrusted person would be defined in clause 7 as the Minister, the Secretary or an APS employee in the Environment Department, the Executive Director or an APS employee of the Health Department, an Advisory Committee member, a consultant engaged under clause 73, a person engaged or employed by the Environment Department, or a person who is a member of the Minister’s staff.

 

249.          Subclause 50(2) would provide that the prohibition in subclause 50(1) does not apply if the use or disclosure is authorised by the Bill or the rules, or by another law of the Commonwealth.

 

250.          The note to this subclause would explain that the defendant bears an evidential burden to show that the use or disclosure of information was authorised. The reversal of the burden of proof is justified in this instance, as the matter to be proved (that is, that the use of disclosure of information was authorised by Commonwealth law) is a matter that would be peculiarly in the knowledge of the defendant. Further, there are a number of authorised uses and disclosures set out in Division 3 of Part 4 of the Bill and across Commonwealth law generally. In the event of a prosecution, it would be significantly more difficult and costly for the prosecution to disprove all possible circumstances than it would be for a defendant to establish the existence of one potential circumstance. Consequently, in order to effectively protect information under clause 50, it is reasonable, necessary and proportionate to reverse the burden of proof and limit the right to the presumption of innocence.

 

251.          The authorised uses and disclosures in the Bill are set out in clauses 51-61.  The authorised uses and disclosures in these clauses are reasonable, necessary and proportionate, because they are generally directed at the performance of functions and powers under legislation (including this Bill), the enforcement of Australian laws, or are matters of public interest with a high threshold that must be met in order to rely on them (such as being necessary to prevent or lessen a serious threat to human health or the environment).

 

252.          It is not expected that the protected information will generally include personal information within the meaning of the Privacy Act 1988. However, should that be the case, the circumstances set out in clauses 51 - 61 are intended to constitute an authorisation for the purposes of Australian Privacy Principle 6.2 (see Schedule 1 to the Privacy Act 1988) and other relevant laws including common law and equitable protections for confidentiality (because the relevant clause will authorise the use or disclosure of the information by or under an Australian law).

 

253.          Subclause 50(3) would have the effect that a person who contravenes the prohibition in subclause 50(1), and the use or disclosure is not authorised by a Commonwealth law, would be committing a fault-based offence. The maximum penalty for the offence would be 300 penalty units.

 

254.          Subclause 50(4) would have the effect that a person who contravenes the prohibition in subclause 50(1), and the use or disclosure is not authorised by a Commonwealth law, would also be committing an offence of strict liability with a maximum penalty of 60 penalty units.

 

255.          Strict liability is proposed for this offence having regard to A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and the Senate Scrutiny of Bills Committee Sixth Report of 2002: Application of Absolute and Strict Liability Offences in Commonwealth Legislation. Consistent with these documents, strict liability is considered appropriate as:

 

a.       the offence is not punishable by imprisonment;

 

b.      the offence is subject to a maximum penalty of 60 penalty units for an individual;

 

c.       the actions which trigger the offence are simple, readily understood and easily defended. The offence is triggered if an entrusted person uses or discloses protected information and the use or disclosure is not authorised by a Commonwealth law;

 

d.      offences relating to the unauthorised use or disclosure of information need to be dealt with efficiently to ensure industry and community confidence in the regulatory regime;

 

e.       the absence of strict liability may adversely affect the capacity to prosecute offenders. Whether or not a defendant intentionally, recklessly or negligently used or disclosed protected information without a relevant authorisation is generally a matter that is peculiarly within the knowledge of the defendant alone. Proving the contrary beyond reasonable doubt may require significant and difficult to obtain indirect and circumstantial evidence.

 

f.       the use of protected information will play an important role in informing the Commonwealth Minister in relation to those matters covered by the objects of the Bill (particularly in relation to scheduling decisions). This will assist in ensuring that the Bill remains an effective and efficient mechanism to realise its intended environmental benefits. If protected information is used or disclosed without authorisation it may deter other persons from providing such information to the Commonwealth in the future.

 

g.      the person affected will be placed on notice to guard against the possibility of contravention, which is likely to significantly enhance the effectiveness of the enforcement regime in deterring the conduct in question.

 

h.      the defence of honest and reasonable mistake of fact is available for strict liability offences (see sections 6.1 and 9.2 of Schedule 1 to the Criminal Code Act 1995) and the existence of strict liability does not make any other defence unavailable (see subsection 6.1(3) of Schedule 1 to the Criminal Code Act 1995).

 

256.          Subclause 50(5) would have the effect of establishing a mirror civil penalty provision which is contravened in circumstances where a person who contravenes the prohibition in subclause 50(1) and the use or disclosure is not authorised by a Commonwealth law. The maximum penalty would be 300 penalty units.

 

257.          It is considered that the combination of fault-based offence, strict liability offence and civil penalty provision will provide an adequate deterrent from undertaking conduct which has the potential to cause such harm. It is also considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected criminal proceedings will be brought for conduct that contravenes subclause 50(1) and is at the more serious end of the spectrum or that involves a higher degree of malfeasance   

Clause 51 – Use or disclosure of protected information by entrusted persons

258.          Clause 51 would authorise the use or disclosure of protected information by an entrusted person for the purposes of:

 

a.       the Bill, or legislative instruments made under the Bill (the Register, the decision-making principles, or the rules); or

 

b.      any of the Industrial Chemicals Environmental Management (Register) Charge (Customs) Bill 2020, Industrial Chemicals Environmental Management (Register) Charge (Excise) Bill 2020 or Industrial Chemicals Environmental Management (Register) Charge (General) Bill 2020 (if these Bills are enacted) or the regulations made under these Bills.

 

259.          As set out above, an entrusted person would be defined in clause 7, and would include the Minister and relevant public servants. The purpose of this exception is to allow persons performing, or assisting in the performance of, powers and functions under the proposed intergovernmental scheme given effect by this Bill, to use and disclose protected information as necessary for the performance of those powers and functions. This would help ensure effective administration of the Bill and associated legislation.

Clause 52 – Disclosure of protected information to Commonwealth entities

260.          Subclause 52(1) would authorise the disclosure of protected information to a Commonwealth entity if the Minister is satisfied that the disclosure will assist the entity to perform its functions or powers.

 

261.          Clause 7 would define a Commonwealth entity as having the same meaning as in the Public Governance, Performance and Accountability Act 2013, being a Department of State, a Parliamentary Department, a listed entity or a body corporate established by a Commonwealth law.

 

262.          For example, the Minister may decide to disclose protected information to the Department of Health if satisfied that the particular information would assist in the administration of legislation under that portfolio, such as the Industrial Chemicals Act 2019.

 

263.          Subclause 52(2) would provide a general prohibition for a person who is (or has been) an official of a Commonwealth entity, and who obtained protected information in that capacity, to use or disclose the information other than for the purpose for which it was disclosed to the entity.

 

264.          Subclause 52(3) would have the effect that a person who contravenes the prohibition in subclause 52(2) would be committing a fault-based offence. The maximum penalty for the offence would be 300 penalty units.

 

265.          Subclause 52(4) would have the effect that a person who contravenes the prohibition in subclause 52(2) would also be committing an offence of strict liability with a maximum penalty of 60 penalty units.

 

266.          Strict liability is proposed for this offence having regard to A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and the Senate Scrutiny of Bills Committee Sixth Report of 2002: Application of Absolute and Strict Liability Offences in Commonwealth Legislation. Consistent with these documents, strict liability is considered appropriate as:

 

a.       the offence is not punishable by imprisonment;

 

b.      the offence is subject to a maximum penalty of 60 penalty units for an individual;

 

c.       the actions which trigger the offence are simple, readily understood and easily defended. The offence is triggered if an official of a Commonwealth entity uses or discloses protected information for a purpose other than the purpose that the information was disclosed to the entity;

 

d.      offences relating to the unauthorised disclosure of information need to be dealt with efficiently to ensure industry and community confidence in the regulatory regime;

 

e.       the absence of strict liability may adversely affect the capacity to prosecute offenders. Whether or not a defendant intentionally, recklessly or negligently disclosed protected information for a particular purpose is generally a matter that is peculiarly within the knowledge of the defendant alone. Proving the contrary beyond reasonable doubt may require significant and difficult to obtain indirect and circumstantial evidence.

 

f.       the use of protected information will play an important role in informing the Commonwealth Minister in relation to those matters covered by the objects of the Bill (particularly in relation to scheduling decisions). This will assist in ensuring that the Bill remains an effective and efficient mechanism to realise its intended environmental benefits. If protected information is used for purposes other than those for which they are disclosed to Commonwealth entities, it may deter other persons from providing such information to the Commonwealth in the future.

 

g.      the person affected will be placed on notice to guard against the possibility of contravention, which is likely to significantly enhance the effectiveness of the enforcement regime in deterring the conduct in question.

 

h.      the defence of honest and reasonable mistake of fact is available for strict liability offences (see sections 6.1 and 9.2 of Schedule 1 to the Criminal Code Act 1995) and the existence of strict liability does not make any other defence unavailable (see subsection 6.1(3) of Schedule 1 to the Criminal Code Act 1995).

 

267.          Subclause 52(5) would have the effect of establishing a mirror civil penalty provision which is contravened in circumstances where a person contravenes the prohibition in subclause 52(2). The maximum penalty would be 300 penalty units.

 

268.          It is considered that the combination of fault-based offence, strict liability offence and civil penalty provision will provide an adequate deterrent from undertaking conduct which has the potential to cause such harm. It is also considered appropriate to include both civil and criminal penalties in order to provide flexibility for the Commonwealth to enforce the prohibition appropriately without always needing to pursue criminal penalties (noting that conviction for a criminal offence carries with it a range of consequences beyond the immediate penalty). It is expected that criminal proceedings will be brought for conduct that contravenes subclause 52(2) and is at the more serious end of the spectrum or that involves a higher degree of malfeasance.

Clause 53 – Disclosure of protected information to State Environment Minister or State government body

269.          Clause 53 would authorise the Minister to disclose protected information to states and territories in certain circumstances. The disclosure would need to be to the State or Territory Environment Minister, or a State or Territory government body.

 

270.          Protected information would only be able to be disclosed under clause 53 if each of the following conditions are met:

 

a.       the Minister is satisfied the disclosure is necessary for the purposes of performing his or her functions or powers under the Bill, the decision-making principles or the rules;

 

b.      the relevant State or Territory Environment Minister or government body has given an undertaking only to use or disclose that information consistently with a relevant agreement between the Commonwealth and the State or Territory;

 

c.       the Minister is satisfied that the information will only be used or disclosed in accordance with such an agreement.

 

271.          The purpose of this provision is to ensure that protected information is able to be shared with State or Territory governments where it is necessary to do so to in order to properly perform functions and powers under the Bill or associated instruments, while maintaining appropriate protections for that information. It is necessary to provide such protections via an agreement because of constitutional issues related to imposing offence provisions on State governments or government officials.  

Clause 54 – Use or disclosure of protected information with consent

272.          Clause 54 would authorise the use or disclosure of protected information by an entrusted person if the person to whose affairs the information relates has consented to the use or disclosure, and provided the use or disclosure is in accordance with the consent provided.

 

273.          This exception recognises that there is no reason to prevent the use or disclosure of information where the person concerned consents to the use or disclosure.

Clause 55 – Disclosure of protected information that is publicly available

274.          Clause 55 would authorise the disclosure of protected information by an entrusted person if the information has already lawfully been made public.

 

275.          This exception recognises that there is no reason to prevent the disclosure of information that is publicly available and therefore already accessible.

Clause 56 – Disclosure of protected information to person whom protected information relates

276.          Clause 56 would authorise the disclosure of protected information by an entrusted person to the person to whom the information relates.

 

277.          This exception recognises that the interests of the person to whom the protected information relates will not be adversely affected by disclosure of the information to him or herself.

Clause 57 – Disclosure to person from whom protected information was obtained

278.          Clause 57 would authorise the disclosure of protected information by an entrusted person to the person from whom the information was obtained.

 

279.          This exception recognises that there is no reason to prevent the disclosure of information to the person who provided it in the first place, as that person will have already seen the information.

Clause 58 – Disclosure of protected information to a court, tribunal etc.

280.          Clause 58 would authorise the disclosure of protected information by an entrusted person for the purposes of court proceedings, or proceedings of a tribunal, authority or person that has the power to require the answering of questions or the production of documents. Clause 58 would also authorise the disclosure of protected information by an entrusted person in accordance with a court order, or an order of such a tribunal, authority or person.

 

281.          This clause is not intended to have the effect of requiring an entrusted person to disclose protected information to a court, tribunal, authority or person. Rather, its intent is to ensure that persons who are required or permitted to provide information to a court, or to a tribunal, authority or person with the power to require or request the information, will not be committing an offence or the contravention of a civil penalty provision (under clause 50 or 52) if they do so.

Clause 59 – Disclosure of protected information for the purposes of law enforcement etc.

282.          Clause 59 would authorise the disclosure of protected information by the Minister to an enforcement body if:

 

a.       the Minister reasonably believes the disclosure is necessary for the enforcement of a criminal law or a law imposing a pecuniary penalty (such as a civil penalty provision), or for the protection of the public revenue; and

 

b.      the relevant enforcement body’s functions include that enforcement or protection; and

 

c.       the information is disclosed for that purpose.

 

283.          An enforcement body, for the purposes of clause 59, would include a Commonwealth, State or Territory government body, the Australian Federal Police or State or Territory police force or service (see subclause 59(2)).

 

284.          It is appropriate that the power to disclose protected information in these circumstances be vested in the Minister, rather than an entrusted person. This is because the exception in clause 59 involves a matter of public interest, being the enforcement of Australian laws.

Clause 60 – Disclosure of protected information to reduce serious risk to human health and the environment

285.          Clause 60 would authorise the disclosure of protected information by the Minister if he or she reasonably believes that the disclosure is necessary to prevent or lessen a serious risk to human health or the environment, and the disclosure is for the purposes of preventing or lessening that risk.

 

286.          It is appropriate that the power to disclose protected information in these circumstances be vested in the Minister, rather than an entrusted person. This is because the exception in clause 60 involves a matter of public interest with a high bar to satisfy (the risk must be serious, and there must be a reasonable belief the disclosure is necessary to prevent or lessen the risk) and is likely to only be applicable in exceptional circumstances.

Clause 61 – Public disclosure of confidential information by the Minister

287.          The exception in clause 61 would only apply to the subset of protected information that is confidential information. Confidential information would be defined under clause 7 as information in respect of which a request for confidentiality has been made under subclause 42(1). Protected information that does not fall within the definition of confidential information in clause 7 (for instance, information that was protected under the Industrial Chemicals Act 2019) would not be able to be disclosed under clause 61.

 

288.          Clause 61 would authorise the disclosure of protected information that is confidential information by the Minister if:

 

a.       the Minister has given a notice under subclause 43(1) proposing to disclose the information; and

 

b.      no successful application is made under subclause 44(1) to maintain the confidentiality of the information.

 

289.          This means that if an application under subclause 44(1) is made, clause 61 would only authorise the disclosure of the confidential information if the Minister approves the application under clause 46, and all reconsideration and review rights in respect of that application have been exhausted or expired.

 

290.          In other words, clause 61 would only authorise the disclosure of protected information that is confidential information after the process in clauses 42-48 (Division 2 of Part 4) has concluded.

Division 4 – Other information sharing matters

Clause 62 – Public disclosure of Advisory Committee recommendations

291.          Clause 62 would allow the Minister to publicly disclose a recommendation made by the Advisory Committee in advising the Minister on the making, variation or revocation of a scheduling decision, the Register or the decision-making principles.

 

292.          For example, after a scheduling decision has been made by the Minister and recorded in the Register, the Minister may, if he or she considers it appropriate, publish the relevant recommendation of the Advisory Committee in order to provide transparency as to why the chemical was listed in a particular schedule or why particular risk management measures were specified.

Clause 63 – Disclosure of protected IC information to the Minister

293.          Clause 63(1) would authorise an entrusted IC person to disclose protected IC information to the Minister if the person reasonably believes the disclosure of the information would assist in the performance of the Minister’s functions or powers under the Bill, the decision-making principles or the rules.

 

294.          Subclause 63(2) would authorise an entrusted IC person to disclose protected IC information to the Minister for the purposes of Industrial Chemicals Environmental Management (Register) Charge (Customs) Bill 2020, the Industrial Chemicals Environmental Management (Register) Charge (Excise) Bill 2020 or the Industrial Chemicals Environmental Management (Register) Charge (General) Bill 2020, or regulations made under those Bills (once enacted).

 

295.          Protected IC information would be defined in clause 7 as protected information (or information that is taken to be protected information) within the meaning of the Industrial Chemicals Act 2019, and is a subset of protected information under this Bill (see definition of protected information in clause 7).

 

296.          An entrusted IC person would be defined in clause 7 as an entrusted person within the meaning of the Industrial Chemicals Act 2019. This includes the Executive Director and the Secretary and staff of the Health Department.

 

297.          Subsection 115(1) of the Industrial Chemicals Act 2019 prohibits an entrusted person (within the meaning of that Act) from disclosing protected information that the person obtained in their capacity as an entrusted person, to another person, unless that disclosure is authorised by, or in compliance with, a requirement under that Act, another Commonwealth law, or a prescribed State or Territory law.

 

298.          This means that neither the Executive Director nor officers of the Department of Health are able to disclose protected information to the Minister (for the purposes of the Minister’s powers and functions under this Bill) unless authorised to do so by a Commonwealth law.

 

299.          Clause 63 is intended to operate as an authorisation for the purposes of the offence in subsection 115(1) of the Industrial Chemicals Act 2019.

 

300.          It is important that the Minister is able to access protected information held by an entrusted IC person for the purposes of the Minister’s powers and functions under this Bill, and associated legislation. This is because the Executive Director and the Department of Health are likely to hold information that is relevant to making, varying or revoking a scheduling decision for a new industrial chemical or a new use of an existing industrial chemical.

 

301.          There will be no separate application made by introducers under this Bill; rather the process will be triggered (administratively) when a risk assessment for a new industrial chemical, or a new use of an existing industrial chemical, is published under the Industrial Chemicals Act 2019. This means that any information provided by the introducer concerning the new chemical or use will have been provided to the Executive Director and Department of Health for the purposes of the application and assessment processes under Industrial Chemical Act 2019. This information will not generally be publicly available, and is likely to include protected IC information, that is relevant for the purposes of a scheduling decision under this Bill.

 

302.          Additionally, while the assessment statement for a new chemical or use will be publicly available, other information pertaining to the assessment of the chemical or use that is held by the Executive Director will generally not be. Such information may also include protected IC information that is relevant for the purposes of a scheduling decision under this Bill.

 

303.          Clause 63 would authorise an entrusted IC person to disclose the relevant protected IC information to the Minister in both of these circumstances.

 

304.          The use of protected IC information by the Minister or an entrusted person would be authorised under clause 51 of the Bill, provided the use is for the purpose of performing, or assisting in the performance of, powers and functions under the proposed intergovernmental scheme given effect by this Bill.

 

305.          Clause 63, in conjunction with clause 51, will help ensure effective administration of the Bill and associated legislation.

Clause 64 – Disclosure of personal information to the Minister etc

306.          Subclause 64(1) would authorise an entrusted IC person to disclose personal information to the Minister if the person reasonably believes the disclosure of the information would assist in the performance of the Minister’s functions or powers under the Bill, the decision-making principles or the rules.

 

307.          Subclause 64(2) would authorise an entrusted IC person to disclose personal information to the Minister for the purposes of Industrial Chemicals Environmental Management (Register) Charge (Customs) Bill 2020, the Industrial Chemicals Environmental Management (Register) Charge (Excise) Bill 2020 or the Industrial Chemicals Environmental Management (Register) Charge (General) Bill 2020, or regulations made under those Bills (once enacted).

 

308.          It is considered necessary for an entrusted IC person to be able to disclose personal information to the Minister for the purposes of this Bill and associated legislation. This is because there will be no separate application made by introducers for scheduling decisions under this Bill; rather the process will be triggered (administratively) when a risk assessment for a new industrial chemical, or a new use of an existing industrial chemical is published under the Industrial Chemicals Act 2019. As such, the Minister will not generally have access to the personal information (including contact information) of the introducer of the new industrial chemical (or new use of an existing industrial chemical) for which he or she proposes to make a scheduling decision. That information will sit with the Executive Director and the Health Department, as it would form part of the application made by the introducer under the Industrial Chemicals Act 2019.

 

309.          However, there may be circumstances where the Minister needs to contact the introducer. For example, where the Minister considers that the introducer likely has additional information that the Minister considers necessary in order to properly make a scheduling decision for that chemical or use. In such circumstances, clause 62 would authorise the disclosure of the personal information of the introducer from an entrusted IC person to the Minister.

 

310.          The use and disclosure of this information by an entrusted person would then be authorised by subclause 64(3) provided the use or disclosure is for the purposes of:

 

a.       the Bill, or legislative instruments made under the Bill (the Register, the decision-making principles or the rules); or

 

b.      any of the Industrial Chemicals Environmental Management (Register) Charge (Customs) Bill 2020, Industrial Chemicals Environmental Management (Register) Charge (Excise) Bill 2020 or Industrial Chemicals Environmental Management (Register) Charge (General) Bill 2020 (once these Bills are enacted) or the regulations made under any of these Bills.

 

311.          The authorisations in subclauses 64(2) and (3) would both constitute authorisations for the purposes of Australian Privacy Principle 6 (see Schedule 1 to the Privacy Act 1988) and other relevant laws including common law and equitable protections for confidentiality (because the relevant clauses will authorise the use or disclosure of the information by or under an Australian law).

 

312.          Clause 64 would help ensure effective administration of the Bill and associated legislation.

Division 5 – Civil penalties

Clause 65 – Civil penalty provisions

313.          Clause 65 would trigger the standard provisions of Part 4 of the Regulatory Powers (Standard Provisions) Act 2014. Part 4 of the Regulatory Powers (Standard Provisions) Act 2014 creates a framework for allowing the civil penalty provisions of the Bill to be enforced by obtaining an order for a person to pay a pecuniary penalty.

 

314.          The only relevant civil penalty provisions are located in clauses 50 and 52 of the Bill and concern the unauthorised use or disclosure of information.

 

315.          Subclause 65(2) would provide that the Minister is the ‘authorised applicant’ for the purposes of Part 4 of the Regulatory Powers (Standard Provisions) Act 2014. This means it is the Minister who would be able to apply to a court for an order for a person to pay a civil penalty in relation to a contravention of this Bill.

 

316.          Subclause 65(3) would extend the operation of Part 4 of the Regulatory Powers (Standard Provisions) Act 2014 to every external territory. This is necessary because the Regulatory Powers (Standard Provisions) Act 2014 does not apply to external territories of its own accord.

PART 5 – SCHEDULING CHARGE

GENERAL OUTLINE

317.          Part 5 of the Bill would set out matters relating to the scheduling charge, including who would be liable, when the charge is due for payment and the collection and recovery of the charge.

NOTES ON INDIVIDUAL CLAUSES

Clause 66 – Simplified outline of this Part

318.          Clause 66 would provide a simplified outline of Part 5 of the Bill. The outline is not intended to be comprehensive and has been included to assist readers to understand the substantive provisions of Part 5, rather than to replace these provisions. It is intended that readers will rely on the substantive clauses of the Part 5.


 

Clause 67 – Liability to pay the scheduling charge

319.          Clause 67 would set out who is liable to pay the scheduling charge. The scheduling charge would be imposed under the Industrial Chemicals Environmental Management (Register) Charge (Customs) Bill 2020, the Industrial Chemicals Environmental Management (Register) Charge (Excise) Bill 2020 or the Industrial Chemicals Environmental Management (Register) Charge (General) Bill 2020 (once enacted), because of the constitutional requirements to impose taxes and levies in separate taxing legislation.

 

320.          A person who is a registered introducer for a registration year would be liable to pay the scheduling charge for the registration year. The terms registered introducer and registration year would be defined in clause 7. A person will be a registered introducer for a registration year if he or she is registered under section 17 of the Industrial Chemicals Act 2019 for that year. A registration year will be the annual 12-month period from 1 September to 31 August, with 1 September 2021 being the start of the first registration year if the Bill is in force at that time. If the Bill is not yet in force on 1 September 2021, then the start of the first registration year will be the 1 September after the Bill comes into force. For example, if the Bill came into force on 9 November 2021, the start of the first registration year would be 1 September 2022.

 

321.          In practice, this will mean that a person who is liable under the Industrial Chemicals Act 2019 to pay a registration charge in respect of the introduction of a new industrial chemical (or a new use of an existing industrial chemical) would also be liable to pay a scheduling charge under this Bill. This is appropriate as it recognises that there will be no separate application to assess a new industrial chemical (or a new use of an existing industrial chemical) under the Bill for the purposes of making a scheduling decision. Rather, it is intended that an application for registration of a new industrial chemical (or a new use of an existing industrial chemical) under the Industrial Chemicals Act 2019 will be a trigger for the Minister to assess the environmental risks of the proposed chemical or use for the purposes of making one or more scheduling decisions under the Bill.

Clause 68 – When scheduling charge is due for payment

322.          Clause 68 would set out when a scheduling charge is due for payment.

 

323.          A scheduling charge payable by a registered introducer for a registration year will be due and payable at the same time the registration charge for the person is due and payable. The term registration charge would be defined in clause 7 as having the same meaning as the Industrial Chemicals Act 2019.

 

324.          This means that a registered introducer will be required to pay both the registration charge (under the Industrial Chemicals Act 2019) and the scheduling charge (under this Bill) at the same time. .

 

325.          Under section 16 of the Industrial Chemicals Act 2019, the registration charge is required to accompany a registered introducer’s application for registration. It is intended that the Industrial Chemicals Legislation Amendment Bill 2020 would amend this section to require applications for registration to also include the scheduling charge.

Clause 69 – Rules may make provision for etc. the collection and recovery of scheduling charge

326.          Clause 69 would enable the Minister to make rules for, or in relation to, certain matters concerning the collection and recovery of the scheduling charge.

 

327.          Rules will be able to make provision for, and in relation to, any of the following:

 

a.       the payment of a penalty for the late payment of a scheduling charge;

 

b.      the refund, remission or waiver of a scheduling charge;

 

c.       the overpayment or underpayment of a scheduling charge;

 

d.      the payment of a penalty for the underpayment of a scheduling charge;

 

e.       the giving of information or keeping of records relating to a person’s liability to pay a scheduling charge.

 

328.          This is not intended to be an exhaustive statement of the matters that may be covered by rules concerning the collection and recovery of the scheduling charge.

 

329.          It is necessary to prescribe the requirements for collection and recovery of the scheduling charge and associated matters in the rules, to ensure there is flexibility to prescribe different requirements for the different scheduling charges that may be imposed. Consistent with the Australian Government Charging Framework, the amount of the scheduling charge imposed under the relevant charges Bills would be determined through a Cost Recovery Implementation Statement. The amount will also be required to recover no more than the Commonwealth’s likely costs and, as such, will be limited in amount to the approximate cost of services rendered by the Commonwealth.

Clause 70 – Recovery of scheduling charge and late payment penalty etc

330.          Clause 70 will have the effect that a scheduling charge, or a penalty for late payment of a scheduling charge that is due and payable may be recovered by the Executive Director as a debt due to the Commonwealth in the Federal Court, the Federal Circuit Court or a court of a State or Territory that has jurisdiction in relation to matters arising under the Bill.

 

331.          The recovery of charges and penalties through a relevant court will ensure the Commonwealth can recover costs for services provided from a person who is liable to pay such amounts but fails to do so.


 

PART 6 – MISCELLANEOUS

GENERAL OUTLINE

332.          Part 6 of the Bill would deal with miscellaneous matters including conferring additional functions on the Executive Director, the engagement of consultants, delegation, and a rule-making power for the Bill.

NOTES ON INDIVIDUAL CLAUSES

Clause 71 – Simplified outline of this Part

333.          Clause 71 would provide a simplified outline of Part 6 of the Bill. The outline is not intended to be comprehensive and has been included to assist readers to understand the substantive provisions of Part 6, rather than to replace these provisions. It is intended that readers will rely on the substantive clauses of the Part 6.

Clause 72 – Functions of Executive Director relating to this Act etc.

334.          Section 142 of the Industrial Chemicals Act 2019 confers a number of functions on the Executive Director concerning that operation of that Act. Clause 72 would confer a number of additional functions on the Executive Director concerning the operation of this Bill and the instruments to be made under it.

 

335.          The additional functions conferred on the Executive Director by clause 72 would be:

 

a.       to assist the Minister in the performance of functions and powers under the Bill, the decision-making principles or the rules;

 

b.      to collect and recover a scheduling charge payable by a registered introducer for a registration year;

 

c.       to perform any other functions conferred on the Executive Director by the rules.

 

336.          It is considered appropriate for these functions to be performed by the Executive Director given his or her role in the operation of the regime created by the Industrial Chemicals Act 2019 and the connection between that regime and the intergovernmental scheme given effect by this Bill (and the instruments to be made under it).

 

337.          It is anticipated that, in accordance with subclause 72(a), the Executive Director would assist the Minister through such activities as the provision of information.

Clause 73 – Engagement of consultants to assist the Minister

338.          Clause 73 would permit the Minister to engage consultants to assist him or her in the performance of his or her powers and functions under the Bill, the decision-making principles or the rules.

 

339.          This does not mean the Minister would be able to outsource his or her powers or functions; only the Minister (or the Minister’s delegate where appropriate) will be able to actually exercise the Minister’s powers or functions (such as making, varying or revoking scheduling decisions). However, the Minister may, for example, engage consultants to provide advice on matters relating to the exercise of his or her powers or functions or on specific relevant subject matters. Where relevant, the Minister will be able to have regard to such advice when making, varying or revoking a scheduling decision (see paragraph 16(1)(i)).

Clause 74 – Delegation by the Minister

340.          Subclause 74(1) would enable the Minister to delegate any or all of his or her powers (except those specified in subclause 74(2)) under the Bill, the decision-making principles or the rules, to the Secretary of the Environment Department, an SES employee or acting SES employee of the Environment Department, or an APS employee of the Environment Department who holds or is acting in an Executive Level 1 or 2 (or equivalent) position.

 

341.          The ability for the Minister to delegate his or her powers and functions does not extend to the power to make the decision-making principles, appoint members of the Advisory Committee, terminate the appointment of members of the Advisory Committee or make the rules (subclause 74(2)). These powers are not appropriate for delegation given their importance to, and role in, the intergovernmental scheme.

 

342.          Subclause 74(3) would also allow the Minister to delegate his or her powers and functions under the Regulatory Powers (Standard Provisions) Act 2014, as applied by this Bill, to the Secretary of the Environment Department, an SES employee or acting SES employee of the Environment Department, or an APS employee of the Environment Department who holds or is acting in an Executive Level 1 or 2 (or equivalent) position. The Minister’s powers and functions under the Regulatory Powers (Standard Provisions) Act 2014 relate to Part 4 of that Act (civil penalties), which would be applied by section 65 of this Bill.

 

343.          In performing functions or exercising powers, delegates must comply with any directions of the Minister (subclause 74(4)). This will ensure that powers and functions exercised by delegates are exercised appropriately and consistently.

 

344.          Effective delegation is a fundamental component of good governance and risk management. It enables powers and functions (including decision-making) to be exercised by persons other than the person to whom the power or function is vested in circumstances where it is not practical or reasonable for the one person to exercise the power or function themselves. For example, it is anticipated that in excess of 100 industrial chemicals will be scheduled annually and it may not be reasonable or practical for the Minister to have to make each decision personally.

 

345.          Limiting delegations to officials at the Executive level ensures that only persons with appropriate seniority and expertise would be exercising any legislative powers or functions, including decision-making powers. Delegating powers and functions to Executive Level 1 officers is consistent with the Australian Administrative Law Policy Guide which suggests that it may be appropriate for more junior officers to make decisions involving a limited exercise of discretion, or under provisions which will give rise to a high volume of decisions. This would not prevent significant decisions being made by persons of higher classifications (such as SES employees or acting SES employees) and it is intended that such limitations would be operationally imposed in the administration of this Bill and the instruments made under it.

 

346.           As an additional safeguard to ensure the appropriate and reasonable use of delegations, the giving of delegations and the exercise of delegated powers are also the subject to fraud control procedures, risk management processes and other protocols. These are designed to ensure delegated decision-making is made at the appropriate level and in a transparent and accountable manner.

Clause 75 – Delegation by Executive Director

347.          Subclause 75(1) would enable the Executive Director to delegate any or all of his or her powers under the Bill or the rules to an SES employee or acting SES employee of the Environment Department or Health Department, or an APS employee of the Environment Department or Health Department who holds or is acting in an Executive Level 1 or 2 (or equivalent) position.

 

348.          Subclause 75(1) would also enable the Executive Director to delegate any or all of his or her powers under the Bill, or the rules, to an SES employee or acting SES employee of the Health Department or the Environment Department or an APS employee of the Health Department or the Environment Department who holds or is acting in an Executive Level 1 or 2 (or equivalent) position. It is appropriate for the Executive Director to have the ability to delegate powers and functions to both Health Department officials and Environment Department officials where appropriate given the synergies between the intergovernmental scheme given effect by this Bill and the regime under the Industrial Chemicals Act 2019.

 

349.          In performing functions or exercising powers, delegates must comply with any directions of the Executive Director (subclause 75(2)). This will ensure that powers and functions exercised by delegates are exercised appropriately and consistently.

 

350.          Similar to clause 74, limiting delegations to officials at the Executive level ensures that only persons with appropriate seniority and expertise would be exercising any legislative powers or functions, including decision-making powers. Delegating powers and functions to Executive Level officers is consistent with the Australian Administrative Law Guide which provides that it may be appropriate for more junior officers to make decisions involving a limited exercise of discretion, or under provisions which will give rise to a high volume of decisions. Again, this would not prevent significant decisions being made by persons of higher classifications (such as SES employees or acting SES employees) and it is intended that such limitations would be operationally imposed in the administration of this Bill and the instruments made under it.

Clause 76 – Rules

351.          Subclause 76(1) enables the Minister to make rules prescribing matters required or permitted by the Bill to be prescribed by the rules, or matters that are necessary or convenient to be prescribed for carrying out or giving effect to this Bill. Rules made under clause 76 would be a legislative instrument for the purposes of the Legislation Act 2003 and will be available on the Federal Register of Legislation.

 

352.          The Bill would provide for the following matters to be prescribed in the rules:

 

a.       other risk assessments that will be characterised as Commonwealth risk assessments (definition of Commonwealth risk assessment in clause 7);

 

b.      international agreements under which Australia has obligations in relation to industrial chemicals. The Minister must have regard to any international agreement prescribed in the rules when making, varying or revoking a scheduling decision (clause 15);

 

c.       other matters the Minister must have regard to when making, varying or revoking a scheduling decision (clause 15);

 

d.      other matters the Minister may have regard to when making, varying or revoking a scheduling decision (clause 16);

 

e.       additional functions of the Advisory Committee (clause 28) or the Executive Director (clause 72);

 

f.       matters relating to collecting and recovering the scheduling charge (clause 69).

 

353.          Allowing these matters be prescribed in rules rather than set out in the Bill itself will ensure the Minister has flexibility to adapt decision-making processes under the Bill to take account of changes in scientific understanding and technology, as well as providing the ability to differentiate (where appropriate) between chemicals of different properties and risks. For instance, it may be appropriate for the Minister to have regard to additional matters for the purposes of scheduling decisions for particular industrial chemicals, or for particular uses of industrial chemicals.

 

354.          The note following subclause 76(1) explains that, despite being a legislative instrument, the rules would be exempt from disallowance and sunsetting due to the operation of subsections 44(1) and 54(1) (respectively) of the Legislation Act 2003. This is because the enabling legislation for the rules (being this Bill) facilitates the establishment or operation of an intergovernmental scheme involving the Commonwealth and one or more States, and authorises the instrument to be made for the purposes of the scheme.

 

355.          Subclause 76(2) would preclude the rules from creating an offence or civil penalty, or from providing powers of arrest or detention or powers of entry, search or seizure. Further, the rules would not be able to impose a tax, set an amount to be appropriated from the Consolidated Revenue Fund or directly amend the text of the Bill.

 

356.          Subclause 76(3) would override subsection 14(2) of the Legislation Act 2003 by allowing the Minister to make rules applying, adopting or incorporating any written material (with or without modification) as existing from time to time. This is considered appropriate because the types of materials that are likely to be incorporated by reference in the rules include international agreements or relevant standards that apply to an industrial chemical which may be amended or updated from time to time. This would enable the rules to incorporate such agreements or standards as in force from time to time, which will require (or allow) the Minister to have regard to the most up to date version of the document without the need to amend the rules to reflect an update in those international agreement or standards. This approach will facilitate scheduling decisions without compromising environmental standards, as it ensures that the most up to date information relating to the chemical will be considered by the Minister. This will, in turn, ensure that scheduling decisions will be appropriate and fit for purpose as they will be based on all relevant information. 

 

357.          In adopting non-legislative instruments as existing from time to time, consideration has been given to the fundamental principle of the Legislation Act 2003, and of access to justice, that people are easily able to understand their rights and obligations at law. It is intended that any document incorporated by reference in the rules will be either made available on, or be accessible through, the Department’s website.

 

358.          Additionally, in order to comply with paragraph 15J(2)(c) of the Legislation Act 2003, the explanatory statements for the rules will contain a description of the relevant incorporated material and indicate how it may be obtained. This will include details of the Department’s website where the list of the incorporated documents will be published.

 


 


Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Industrial Chemicals Environmental Management (Register) Bill 2020

 

This Bill is compatible with human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Bill

The Industrial Chemicals Environmental Management (Register) Bill 2020 (the Bill) would establish a national and consistent framework to manage the ongoing use and disposal of industrial chemicals, in order to reduce impacts on the environment and limit people’s exposure to industrial chemicals.

In July 2015, the Commonwealth, states and territories agreed to establish a National Standard for the environmental risk management of industrial chemicals (the National Standard). The National Standard was intended to provide for a consistent, nation-wide approach to managing the risks that industrial chemicals may pose to the environment.

The National Standard was developed in consultation with states, territories and industry stakeholders, and agreed in principle by Environment Ministers in December 2017.

The Bill would provide a framework to give effect to the National Standard and fill the existing gap in managing the use, release to land, air and water, and disposal of industrial chemicals. It would also strengthen the environmental risk management responses available to all jurisdictions by enabling environmental management conditions to be imposed on an industrial chemical across its lifecycle.

The Bill would enable the Minister to:

(a)    make scheduling decisions in relation to an industrial chemical. A scheduling decision sets out the controls applicable to the use and disposal of an industrial chemical. Controls may include restrictions or prohibitions on the use or disposal of a chemical;

 

(b)   establish, by legislative instrument, decision-making principles that set out the risk characteristics to categorise industrial chemicals, or their use, according to their level of concern to the environment. The Minister would be required to comply with the decision-making principles when making a scheduling decision;

 

(c)    consult with the public and states and territories on matters relating to the making, variation or revocation of scheduling decisions or the decision-making principles;

 

(d)   establish, by legislative instrument, a register of scheduling decisions, which will record all scheduling decisions for industrial chemicals. It is intended that a law of the Commonwealth, or a law of a State or Territory, will then apply or adopt the Register and make provision for the implementation and enforcement of scheduling decisions in the Register;

 

(e)    establish the Advisory Committee on the Environmental Management of Industrial Chemicals. The functions of the Advisory Committee include advising the Minister about matters relating to the making, variation or revocation of scheduling decisions, the Register or the decision-making principles;

 

(f)    provide mechanisms for sharing information, protecting information, and for the use and disclosure of protected information in limited circumstances;

 

(g)   delegate the Minister's functions and powers under the Bill;

 

(h)   make rules containing additional operational detail for the legislative framework provided by the Bill.

Following the commencement of this Bill, the Commonwealth and states and territories will be responsible for implementation of the scheduling decisions, recorded in the Register, within their jurisdictions. This will drive national consistency in the management of industrial chemicals, reducing costs to industry and providing better protection for the environment.

Human rights implications

This Bill engages the following human rights:

·         the right to health in Article 12(1) of the International Covenant on Economic, Social and Cultural Rights (the ICESCR);

·         the right to a fair trial and fair hearing in Article 14(1) of the International Covenant on Civil and Political Rights (the ICCPR);

·         the right to the presumption of innocence in Article 14(2) of the ICCPR;

·         the right to privacy in Article 17 of the ICCPR.

Right to health

Article 12(1) of the ICESCR makes provision in relation to the right to health, specifically the right to the enjoyment of the highest attainable standard of physical and mental health.

Article 12(2)(b) includes the improvement of all aspects of environmental hygiene as a step to be taken to achieve the full realisation of the right to health. In its General Comment No 14 (August 2000), the United Nations Committee on Economic, Social and Cultural Rights stated that this encompasses the prevention and reduction of human exposure to harmful substances (at [15]).

A key objective of the Bill would be to establish a national framework to manage the ongoing use and disposal of industrial chemicals, in order to reduce impacts on the environment and limit people’s exposure to industrial chemicals. The Bill would achieve this by:

·         enabling the Minister to make scheduling decisions in relation to an industrial chemical. In doing so, the Minister must have regard to risks that the chemical, or its end use, poses, or may pose, to the environment and how such risks may be minimised by setting controls on their use and disposal (see clauses 11 and 15(1)); and

 

·         establishing the Advisory Committee with expertise in environmental management, toxicology and chemistry (among others) to advise the Minister when making certain decisions (see clauses 28 and 30(3)). This would ensure that the Minister’s decision-making is informed and takes into account information relating to the prevention and reduction of potential environmental impacts and people’s exposure to harmful substances.

Therefore, the Bill promotes the right to health under Article 12 of the ICESCR. It positively engages this right by ensuring that, where relevant, environmental risks are considered in decision-making. This would ensure that human exposure to industrial chemicals are minimised.

Right to a fair trial and fair hearing

Article 14(1) of the ICCPR guarantees the right to a fair trial and fair hearing in relation to both criminal and civil proceedings.

The Bill would provide for two civil penalty provisions relating to the unauthorised use or disclosure of protected information by different Commonwealth officials (subclauses 50(5) and 52(5)).

Clause 65 would trigger the standard provisions of Part 4 of the Regulatory Powers (Standard Provisions) Act 2014. These standard provisions create a framework for allowing the civil penalty provisions of the Bill to be enforced by obtaining an order for a person to pay a pecuniary penalty.

Civil penalty provisions may engage criminal process rights under Article 14 of the ICCPR if the imposition of civil penalties is classified as ‘criminal’ under international human rights law. Article 14 of the ICCPR requires that, in the determination of criminal charges, everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law.

Determining whether penalties could be considered criminal under international human rights law requires consideration of the classification of the penalty provisions under Australian domestic law, the nature and purpose of the penalties, and the severity of the penalties.

The civil penalty provisions of the Bill would expressly classify the penalties as civil penalties. The provisions create solely pecuniary penalties in the form a debt payable to the Commonwealth. The purposes of these civil penalties would be to encourage compliance with the Bill and protect the confidentiality of the protected information. The civil penalty provisions would not impose criminal liability and would not be dependent on a finding of guilt. A finding by a court that they have been contravened would not lead to the creation of a criminal record. The penalties only apply in the context of the regulatory regime of the Bill rather than the public in general. These factors all suggest that the civil penalties imposed by the Bill are civil and not criminal in nature.

The maximum penalty that may be imposed in civil penalty orders is 300 penalty units. Under subsection 82(5) of the Regulatory Powers (Standard Provisions) Act 2014, as applied by clause 65, the maximum penalty that applies to individuals are those specified in the civil penalty provision of the Bill and the corporate multiplier rule applies to body corporates. This means that the maximum penalty for body corporates will be no more than five times the penalty specified in the civil penalty provision, that is, 1500 penalty units.

The civil pecuniary penalties for the proposed civil penalty provisions in the Bill have been set by reference to the Guide. They reflect the importance of the use of protected information in informing the Commonwealth Minister in relation to those matters covered by the objects of the Bill (particularly in relation to scheduling decisions), which is a necessary part of ensuring that the Bill remains an effective and efficient mechanism to realise its intended environmental benefits. If protected information is used or disclosed without authorisation it may deter other persons from providing such information to the Commonwealth in the future.

Therefore, the civil penalties provided for by the Bill would not amount to a criminal penalty for the purposes of the ICCPR and does not limit the right to a fair and public hearing and other criminal process rights and minimum guarantees in Article 14 of the ICCPR.

Right to the presumption of innocence

Article 14(2) of the ICCPR ensures that everyone charged with a criminal offence shall have the right to be presumed innocent until proven guilty according to law.

Strict liability

Strict liability offences engage and limit the presumption of innocence as they allow for the imposition of criminal liability without the need to prove fault. However, strict liability offences will not necessarily be inconsistent with the presumption of innocence, provided that the removal of the presumption of innocence pursues a legitimate objective and is reasonable, necessary and proportionate to achieving that objective. It is also important to note that the defence of honest and reasonable mistake of fact is still available and the existence of strict liability does not make any other defence unavailable.

The Bill contains two strict liability offences which prohibit:

·         the unauthorised use or disclosure of protected information by an entrusted person who obtained that information in their capacity as an entrusted person (subclause 50(4)). An entrusted person is defined as the Minister, the Secretary or an APS employee in the Environment Department, the Executive Director or an APS employee in the Health Department, an Advisory Committee member, a consultant engaged under clause 73, a person engaged or employed by the Environment Department, or a person who is a member of the Minister’s staff;

 

·         the disclosure of protected information by an official of a Commonwealth entity, or past official, who obtained that information in their capacity as a Commonwealth official, for a purpose other than the purpose for which the information was disclosed to the entity (subclause 52(4)).

Application of strict liability to these offences has been set out having regard to A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (the Guide) and the Senate Scrutiny of Bills Committee Sixth Report of 2002: Application of Absolute and Strict Liability Offences in Commonwealth Legislation. Consistent with these documents, strict liability is considered appropriate as the penalties for the offences do not include imprisonment and do not exceed 60 penalty units for an individual. 

Protected information will play an important role in informing the Minister in relation to matters covered by the objects of the Bill (particularly in relation to scheduling decisions), which is a necessary part of ensuring that the Bill remains an effective and efficient mechanism to realise its intended environmental benefits. If protected information is used for purposes other than those for which they are disclosed to Commonwealth entities, it may deter other persons from providing such information to the Commonwealth in the future. Strict liability offences would ensure that unauthorised disclosures are dealt with efficiently to ensure confidence in the regulatory regime.

Reversal of the burden of proof

Laws that shift the burden of proof to a defendant can be considered a limitation of the presumption of innocence. Where a defendant bears an evidential burden in relation to an exception it means the defendant bears the burden of adducing or pointing to evidence that suggests a reasonable possibility that the exception has been met. Reversing the burden of proof is not necessarily inconsistent with the presumption of innocence provided that the reversal pursues a legitimate objective and is reasonable, necessary and proportionate to achieving that object. Whether the right to the presumption of innocence is limited will depend on the circumstances and justification for the reverse burden.

Subclause 50(1) would set out a general prohibition on the use or disclosure of protected information by a person who is or has been an entrusted person and who obtained the protected information in his or her capacity as an entrusted person. Subclause 50(2) would provide that the prohibition does not apply if the use or disclosure is authorised by the Bill or the rules, or by another law of the Commonwealth. The note to this subclause would clarify that the defendant bears an evidential burden to show that the use or disclosure of information was authorised.

The reversal is justified in this instance, as the matter to be proved (that is, that the use of disclosure of information was authorised by Commonwealth law) is a matter that would be peculiarly in the knowledge of the defendant. Further, there are a number of authorised uses and disclosures set out in Division 3 of Part 4 of the Bill and across Commonwealth law generally. In the event of a prosecution, it would be significantly more difficult and costly for the prosecution to disprove all possible circumstances than it would be for a defendant to establish the existence of one potential circumstance. Consequently, in order to effectively protect information under clause 50, it is reasonable, necessary and proportionate to reverse the burden of proof and limit the right to the presumption of innocence.

Right to privacy

Article 17 of the ICCPR prohibits arbitrary or unlawful interferences with an individual’s privacy, family, home or correspondence. The right to privacy can be limited to achieve a legitimate objective where the limitations are lawful and not arbitrary. In order for an interference with the right to privacy to be permissible, the interference must be authorised by law, be for a reason consistent with the ICCPR and be reasonable in the circumstances.

Minister may request information

Clauses 19 and 20 would allow the Minister to request information from a specific person or invite persons to give information by making a public call for information. In both cases the information must be relevant to the making, variation or revocation of a scheduling decision. A person may give the Minister information in accordance with a request or invitation. This would constitute a statutory authorisation for the person to provide the information to the Minister, in the event such a disclosure may be prohibited under another law.

It is possible that some of the information requested may be personal information. The collection of such information under these clauses (and any subsequent storage, use or disclosure of this information) may therefore operate to limit the right to privacy. However, it is likely that only a limited amount of personal information would be requested, and that the information would relate to a person’s capacity as an introducer of an industrial chemical.

Any personal information that is requested and received under the Bill would be managed in accordance with the Department’s Privacy Policy and the Australian Privacy Principles (APPs) contained in Schedule 1 of the Privacy Act 1988. This would ensure appropriate controls exist in relation to the use and storage of personal information. For example, only personal information relevant to the making, variation or revocation of a scheduling decision would be requested, and any use and disclosure of that information would be consistent with the APPs.

Furthermore, clauses 19 and 20 are not intended to be coercive powers and the Minister would not be able to compel a person to provide information (including personal information) in response to a request or invitation.

Use and disclosure of information

Part 4 of the Bill would deal with confidential information, the use and disclosure of protected information and other information sharing matters.

Division 2 of Part 4 would create a process where a person who provides information to the Minister under this Bill can request that information not be publicly disclosed. If the Minister wants to publicly disclose that information at a later date, he or she would be required to follow the process in Division 2 first, which includes a public interest test. This process would promote the right to privacy as it gives a person who provides relevant information to the Minister an opportunity to inform the Minister that they consider the information to be confidential, and therefore should not be disclosed.

Division 3 of the Part 4 would set out a number of authorised uses and disclosures for protected information in defined circumstances. Examples of such circumstances include disclosure to a State Environment Minister or State government body; disclosure to a law enforcement agency; disclosure of protected information that is already publicly available; or where the Minister reasonably believes that the disclosure is necessary to prevent or lessen a serious risk to human health or the environment, and the disclosure is for the purposes of preventing or lessening that risk.

Furthermore, Division 4 of Part 4 would provide that an entrusted IC person may disclose protected IC information or personal information to the Minister in circumstances to assist the Minister to perform their functions or exercise their powers under this Bill. Division 4 of Part 4 would also authorise an entrusted person to use and disclose such information for the purposes of the Bill, the instruments made under it, or the associated charges Bills and instruments made under those Bills.

These circumstances are clearly defined and are generally aimed at either assisting with the effective operation and enforcement with the Bill; public interest matters where there is a high bar to satisfy, or instances where there is no justifiable reason to prevent use of disclosure of information. Therefore, this limitation to the right to privacy is reasonable, necessary and proportionate to achieve legitimate objectives and is consistent with the right to privacy in Article 17 of the ICCPR.

Conclusion

The Bill is compatible with human rights because it promotes the right to health under Article 12(1) of the ICESCR and, to an extent, the right to privacy under Article 17 of the ICCPR. To the extent that it may limit human rights, those limitations are reasonable, necessary and proportionate to achieve the legitimate objectives of the Bill.

 

(Circulated by authority of the Minister for the Environment, the Hon. Sussan Ley MP)


Environmental Risk Management of Industrial Chemicals

 

Decision Regulation Impact Statement

June 2015


Executive Summary

 

This Decision Regulation Impact Statement (RIS) has been prepared by the Australian Government Department of the Environment on behalf of the Commonwealth, state and territory governments. The Council of Australian Governments (COAG) agreed to progress reforms related to the creation of a standards-setting body to make nationally consistent environmental risk management decisions in line with recommendations in the 2008 Productivity Commission Research Report on Chemicals and Plastics Regulation.

Following the release of the Consultation RIS in 2013, the purpose of this Decision RIS is to examine options to implement a nationally consistent approach to the environmental risk management of industrial chemicals within Australia, thereby addressing the current fragmented and inefficient approach that exists in Australia.

Without a consistent approach, there is the potential for infrequent or inconsistent implementation of environmental risk management leading to increased risk of environmental damage, increased costs and uncertainty for business, and erosion of public confidence.

The Problem

Industrial chemicals are used every day by everyone in a wide range of products and a range of uses including plastics and rubbers, paints, fuels, manufacturing, mining, household products, toiletries and cosmetics.

The majority of chemicals in everyday use are of low concern to the environment and human health. However, some chemicals can be harmful if exposed to the environment or people. If chemicals are not managed appropriately, they may result in environmental damage. Historical examples of environmental contamination indicate that remediating sites can take decades, cost hundreds of millions of dollars and impact the community through reduced access to resources. An example of this is the dioxin contamination in Sydney Harbour that has cost industry and government around $200 million in remediation to date and has resulted in a ban on commercial fishing in the harbour to protect the health of the public.

While the regulatory framework for chemicals has improved over the last two decades, the Australian regulatory framework for the management of risks to the environment from industrial chemical use remains complex.  The management of environmental risks from industrial chemicals across jurisdictions is fragmented and inefficient, and less effective than other chemical risk management regimes, such as workplace health and safety and public health.

Industrial chemicals are assessed for health and environmental risks through the National Industrial Chemicals Notification and Assessment Scheme (NICNAS), under the Industrial Chemicals (Notification and Assessment) Act 1989 (ICNA Act). States and territories are responsible for implementing recommendations for managing the environmental risks of industrial chemicals in line with legislative frameworks. A significant amount of work is required to translate recommendations made by NICNAS into practical environmental risk management actions such as limiting release concentrations in certain locations. Consequently, environmental risk management actions are often not implemented, or are only partially addressed on a jurisdictional basis.

Recommendations for environmental risk management of industrial chemicals are made to prevent harmful exposure of a chemical to the environment. If they are not consistently implemented, it leads to ineffective protection of the environment through a lack of knowledge of the environmental impacts of chemicals by both businesses and the community. The regulatory complexity and inconsistency also leads to confusion, gaps, duplication and increased costs and uncertainty for business. The key gap in the regulatory framework for environmental risk management of industrial chemicals is the lack of an institutional mechanism to coordinate the implementation of NICNAS’s environmental recommendations by the states and territories.

The scale of the problem is realised with knowledge of the numbers of chemicals that undergo a NICNAS risk assessment. The current regulatory framework is inadequate to deal with the numbers of chemicals that are currently progressed through the system. Up to 20% of new industrial chemicals for which an environmental risk assessment is completed by NICNAS have the potential to have adverse effects on the environment if not appropriately managed. This number may be as high as 45% of the 38,500 existing industrial chemicals that were added to the Australian Inventory of Chemical Substances without assessment. Between 2012 and 2016, 3000 of these chemicals are being assessed for their risk to the environment and human health, adding to the volume of chemicals that may need risk management.

Policy Objectives

The reforms are being driven by two overarching objectives with the aim of addressing the environmental and business process concerns:

·         To achieve better protection of the environment through improved management of the environmental risks posed by industrial chemicals.

·         To provide a nationally consistent, transparent, predictable and streamlined approach to environmental risk management of industrial chemicals for governments, industry and the community.

Options for Action

In order to address the objectives of the reforms, refinements to the proposed options in the Consultation RIS have been made. The proposed options establish arrangements equivalent to those that operate in other sectors such as poison scheduling, transport and workplace health and safety, and align with accepted international practices for environmental risk management.

The foundation of all of the policy options, apart from the base case, is the development of a National Standard for the environmental risk management of industrial chemicals. The Standard is designed to address the overarching objectives of the reforms; namely to increase environmental protection and to provide a streamlined, transparent, efficient and effective framework for government, business and the community for the environmental risk management of industrial chemicals.

Each industrial chemical that is assessed in Australia for its impact on the environment is proposed to be scheduled under the National Standard according to the chemical’s level of concern to the environment. The Standard will be developed upfront and have a set of pre-defined risk management outcomes appropriate to the chemicals’ levels of concern to the environment, therefore keeping timeframes for decision making to a minimum. As the National Standard will be designed to be transparent and predictable, risk management decisions may be anticipated prior to chemical notification and this will also streamline the process. A conceptualisation of the Standard is outlined in the figure below.

The National Standard

Title: The National Standard - Description: Image depicting the Nation Standard for Concern categories for chemicals.
Low concern are checmials that pose a low or very low risk to the environment and are not highly hazardous to the environment.
Intermediate concern are chemicals that post a material risk to the enviornment and are hazardous to the environment and are hazardous to the environment.
High concern are chemcials that pose a significant risk to the environment and are highly hazardous to the environment.

 

In order to establish the proposed National Standard to strengthen the efficiency and effectiveness of the regulatory framework, three options for implementation are examined. These implementation options build from the base case and include a non-statutory approach, a cooperative approach and a system fully implemented by the Commonwealth.

Image depicting the three options for implementation.
Option 1: Non-Statutory Framework
The National Standard would be established in a non statutory framework and implementation of decisions by jurisdictions would be non binding
Option 2: Cooperative Framework
The National Standard and decision making powers would be established under Commonwealth legislation, with automatic adoption under jurisdictional legislationf or implementation and compliance.
Option 3: Commonwealth Framework
The National Standard and associated compliance measures would be established under a Commonwelath legislative framework

Impact Analysis

The economic and social impact of environmental harm caused by certain industrial chemicals is well known and documented. In addition the fragmented nature of the current system means that businesses are potentially subject to different risk management and reporting requirements across jurisdictions.

Under all options, implementation of the National Standard is likely to result in increased protection of the environment and improve national consistency when compared to the base case. The extent to which these benefits are realised is dependent on the method of implementation of the National Standard. This is a reflection that consistency in the adoption of risk management decisions; the process by which decisions are made; and the mechanism for compliance and enforcement varies between the options.

To be able to quantify aspects of the proposed reforms that are not easily monetised, or extrapolated to a national scale over a large number of chemicals, two approaches were used to inform the conservative estimate presented below.

The two approaches were:

·         A top down approach — this approach focused on looking at the overall size of the problem the proposal is trying to solve and then considering to what extent the Standard and associated processes will address this problem.

·         A bottom up approach — this approach focused on establishing the net benefits/costs of changes to the status quo on an individual chemical basis and extrapolating across all chemicals assessed using the Standard every year.

The top down approach focused on determining the potential benefits from the National Standard including avoided contamination costs, avoided public health costs and increased national regulatory harmonisation for business. Case studies from the bottom up approach were used to inform the scaling of the top down approach by establishing the benefits and costs on an individual chemical basis. The top down approach is considered to be a conservative method of estimating the impact of the reforms and is based on the best available information for the costs of industrial chemicals on the community.

The analysis found that there was a significant net benefit under each of the options considered compared to the status quo. The greatest net benefit is achieved from Option 2 in the order of $112 million (over 10 years in present value terms). Options 1 and 3 had net benefits of $57 million and $105 million respectively. 

 

Option 1

Option 2

Option 3

 

$million

$million

$million

Impact on the community

109

181

 181

Impact on business

-37

-59

-60

Impact on government

-15

-10

-16

Total net benefit

57

112

 105

 

There is likely to be a significant benefit to the community from implementing this reform to the environmental risk management framework, from avoided site contamination and associated public health impacts. For example, based on known examples of site contamination, it is estimated that the benefit from cost avoided from this type of environmental incident could be up to $69 million (net present value over ten years). In addition, the community is likely to benefit from decreased risk of environmental exposure to industrial chemicals that have the potential to significantly impact on human health, in the order of $112 million (net present value over ten years).

The benefits to the community are likely to be realised under Option 2 and 3 as the rate of adoption and implementation is expected to be higher under a legislative framework. Option 1, being a non-statutory framework which will still require jurisdictions to consider legislation for each national decision individually, is estimated to only have a 60% uptake of environmental risk management recommendations. Therefore, the estimated benefit to the community is lower than compared to the other options. 

The impact on industry as a result of the proposed options will depend on the assessed level of concern to the environment of the industrial chemicals used and whether businesses are subjected to changes in requirements for risk management. It is assumed that for the majority of chemicals scheduled under the Standard, businesses are likely to already be compliant as existing controls used by industry may already be sufficient to meet environmental risk management recommendations.

However, it is expected that the introduction of the Standard would increase the compliance costs for businesses operating in jurisdictions where risk management recommendations are not readily or consistently adopted. These costs could be in the order of $59 million and $60 million (over 10 years in present value terms) for Options 2 and 3. The cost to industry is likely to be lower for Option 1 as it is less likely that risk management decisions will be adopted and implemented. This is set against the background of the chemicals and plastics industry which has an estimated value of $33 billion in annual turnover.

The Standard is proposed to be outcomes based. This approach allows industry the flexibility to determine how best to meet the required environment outcome for a particular chemical. It allows regulated entities to find the least cost solution to meeting the prescribed performance outcome and therefore encourages innovation.

Fragmented regulatory arrangements can increase complexity and can lead to duplication of effort for businesses operating across borders. It is expected that industry would benefit from the establishment of a nationally consistent approach to environmental risk management of industrial chemicals due to lower administrative and compliance costs associated with adhering to one National Standard rather than up to eight different requirements across all jurisdictions. It is estimated that this could lead to savings in the order of $3 million for business for options 2 and 3. This is likely to be lower for Option 1 as a lower level of national consistency is expected and businesses will still be subject to different risk management and reporting requirements across jurisdictions.

The proposed options would also provide industry with greater transparency, predictability and certainty as the proposed risk management actions would be publicly available and based on an existing, known Standard. Thus industry will be able to better understand and engage with the regulatory framework at an earlier stage. With the provision of self-assessment tools, the Standard would allow industry to make informed judgements about likely outcomes of the risk management process prior to applying for assessment under NICNAS and also provide an incentive to seek out ‘greener’ options.

In general, the government costs associated with developing and implementing the Standard are relatively modest. These costs will include the upfront costs associated with developing the National Standard and legislative and administrative arrangements necessary to implement the Standard; and the ongoing processes for administering the Standard. Option 2 is the least cost option for implementation at $10 million (net present value over 10 years). Option 1 and 3 are costed at $15 million and $16 million respectively.

The main difference in the costs is determined by the required level of involvement of the state, territory and Commonwealth governments to implement the Standard under the three options. A key ongoing cost to government under Option 1 is staff time required to facilitate the decision making process under the National Standard. This includes the time required by a Decision Maker or their delegate, operational costs for staff working on a secretariat of the National Standard, and jurisdictional resourcing of a Working Group for reviewing and commenting on risk management recommendations, as required. There would also be additional administrative costs to adopt each scheduling decision, through their own legislative framework on a case by case basis.

In contrast, under Options 2 and 3, the staffing requirements for jurisdictions is less than for Option 1 as the framework would establish an Advisory Committee rather than a Working Group composed of state and territory officials. Under Options 2 and 3, decisions would be automatically adopted and therefore there would be no consideration or regulation of chemicals by jurisdictions on a case by case basis. The increase in costs of Option 3 compared to Option 2 also reflects the potential for regulatory duplication and associated costs of establishing a new Commonwealth regulator.

Although the net benefits from changes to the way the environmental risks associated with industrial chemicals are managed are not easily quantified, it is highly likely that they will outweigh the costs associated with developing and implementing the Standard. Indeed, there are examples provided in the RIS that suggest that the benefits from just a few chemicals alone could potentially outweigh the costs of developing the Standard.

Conclusion

The reforms will facilitate a nationally consistent approach to environmental risk management of industrial chemicals by jurisdictions. The reforms will deliver positive benefits for business through a more streamlined, transparent, efficient and predictable approach to environmental risk management of chemicals. They also seek to align Australia’s chemical management processes with accepted international practice for environmental risk management of industrial chemicals.

The Decision RIS has assessed Option 2 as being the preferred option for implementation of a national approach to environmental risk management of industrial chemicals. This conclusion is based on the following:

·         The impact analysis indicates that there is likely to be a net benefit as a result of implementing any of the options relative to the base case.

·         Option 1 is not expected to meet the overarching objective to provide a nationally consistent, transparent and predictable approach for environmental risk management of industrial chemicals to industry. Option 1 is also only expected to partially meet the objective of achieving better protection of the environment through improved management of the environmental risks posed by industrial chemicals. This is due to the non-binding nature of the option and potential for continued inconsistent implementation.

·         Option 2 is expected to meet both of the overarching objectives of the reforms.

-       The net benefit for Option 2 is greater than Option 1 as consistency across jurisdictions is expected to be achieved and the environmental benefits of the reforms realised. The likely benefits are expected to be greater than Option 3, mainly due to expected efficiencies for Option 2 where regulatory efforts between the Commonwealth and states and territories are not expected to be duplicated.

·         As with Option 2, Option 3 is expected to meet the overarching objectives of the reforms.

-       As consistency across jurisdictions is anticipated to be achieved and the environmental benefits of the reforms realised, the likely benefits associated with Option 3 are greater than Option 1. However, the likely benefits for Option 3 would be less than Option 2, mainly due to duplication in regulatory effort between the Commonwealth and states and territories for Option 3 and the costs associated with establishing a new Commonwealth regulator.

·         Option 2 is determined to be the least cost option for implementation of the National Standard in a manner that will achieve the described benefits. Therefore, Option 2 is considered to be the preferred option.

 


Contents

Executive Summary. i

List of Figures. xiii

List of Tables. xiv

Acronyms and Abbreviations. xvi

1       Overview of the Regulation Impact Statement 1

1.1        Purpose. 1

1.2        Report Structure. 1

2       Background and Policy Context 2

2.1        Policy Context 2

2.2        Consultation Regulation Impact Statement 3

2.3        Consultation Outcomes. 3

3       Nature and Extent of the Problem.. 4

3.1 The chemicals and plastics industry. 4

3.1        The Need for Action. 6

3.1.1         Chemicals can be harmful to the environment 6

3.1.2         The current regulatory arrangements are not fully effective. 8

3.1.3         Australia must meet requirements under international obligations. 15

3.2        Summary. 16

4       Objectives of Government Action. 17

5       Statement of Options for Action. 18

5.1        The National Standard. 20

5.1.1         Expected advantages of a National Standard. 20

5.1.2         Processes under the National Standard. 21

5.2        The Options for Action. 24

5.2.1         Base Case – Business-as-Usual 25

5.2.2         Option 1 – Non-statutory framework. 26

5.2.3         Option 2 – Cooperative framework. 27

5.2.4         Option 3 – Commonwealth framework. 28

5.3        International Consistency. 28

5.4        Summary of Options for Action. 30

6       Impact Analysis. 32

6.1        Methodology. 32

6.1.1         Baseline. 33

6.2        Impact on the community. 34

6.3        Impact on Industry. 37

6.3.1         Advantages to industry as a result of increased national consistency. 38

6.3.2         Informed decisions and outcomes based actions undertaken by business. 39

6.3.3         Streamlined process and potential for reduced delay costs. 40

6.3.4         Summary of net impact on industry. 40

6.4        Impact on Government 42

6.5        Analysis of Options. 44

6.5.1         Summary of Option 1. 45

6.5.2         Summary of Option 2. 45

6.5.3         Summary of Option 3. 46

7       Consultation. 47

7.1        Consultation Regulation Impact Statement 47

7.1.1         Outcomes from consultation. 49

7.2        Refinements to policy options. 50

7.3        Decision Regulation Impact Statement 51

8       Implementation and Review.. 52

8.1        Implementation. 52

8.1.1         Funding. 53

8.2        Review.. 53

9       Evaluation and Conclusion. 54

Appendix A       Glossary of Terms. 56

Appendix B       Findings from the Consultation RIS.. 60

Appendix C       Chemicals and the Environment 62

C.1       Environmental exposure of industrial chemicals. 62

C.1.1        Chemical release. 62

C.1.2        Environmental fate and partitioning behaviour 63

C.2       Environmental effects of chemicals in Australia. 63

C.3       Chemicals case study. 65

Appendix D       National Regulatory Processes. 68

D.1       NICNAS.. 68

D.2       The AICS.. 68

D.3       Assessment processes. 69

Appendix E       State and Territory Legislation. 71

Appendix F        International Obligations. 73

F.1        OECD Council Decisions. 73

F.2        Stockholm Convention. 73

F.3        Rotterdam Convention. 74

F.4        Basel Convention. 76

F.5        Minamata Convention. 76

F.6        Montreal Protocol 77

Appendix G       The National Standard. 79

G.1       Chemical categorisation and decision making. 80

G.2       Timeframes for decision making. 82

G.3       Information available under the National Standard. 83

G.4       Outcomes-based risk management 83

Appendix H       Numbers of chemicals scheduled under the National Standard. 84

Appendix I         International Approaches to Environmental Risk Management of Industrial Chemicals  87

I.1         International risk management findings. 87

I.2         SAICM.. 88

I.2.1     Risk Reduction Text from SAICM.. 88

I.3         OECD.. 90

I.4         Canada. 92

I.4.1     Chemicals Management Plan. 92

I.4.2     Regulatory risk management approaches. 93

I.4.3     Other risk management approaches. 95

I.5         European Union. 96

I.5.1     Regulatory risk management approaches. 96

I.6         United States of America. 98

I.6.1     Regulatory Risk Management Approaches. 98

I.6.2     Other Risk Management Approaches. 100

I.7         Comparison of risk management in each region. 101

Appendix J        Impact Analysis. 102

J.1        Impact analysis methodology and limitations. 102

J.1.1         Time Period and Discount Rate. 103

J.1.2         Two alternative methodologies for environmental benefits and additional industry compliance costs  104

J.2        Key assumptions for monetised costs. 111

J.2.1         Costs of National Standard Development 111

J.2.2         Cost of legislative and administrative changes. 112

J.2.3         Costs of ongoing processes. 115

J.2.4         Total costs for government of upfront and ongoing process for the National Standard  120

J.2.5         Impact on industry. 120

J.3        Summary of estimated net benefits/costs of the proposed reforms. 122

J.4        Sensitivity Analysis. 123

Appendix K       Consultation RIS stakeholders. 125

 

 


List of Figures

Figure 3‑1: Snapshot of the Australian chemicals and plastics industry. 5

Figure 3‑2: Examples of industrial chemical uses in Australia. 5

Figure 3‑3: Chemical lifecycle and exposure. 8

Figure 3‑4: Current framework for environmental management of industrial chemicals. 9

Figure 3‑5: Current framework for management of industrial chemicals for human health. 10

Figure 3‑6: Proportions of industrial chemicals that may require environmental risk management to prevent damage to the environment 11

Figure 5‑1: Proposed framework for the environmental management of industrial chemicals. 18

Figure 5‑2: Proposed scheduling process under the National Standard. 22

Figure 5‑3: Conceptualisation of the National Standard. 23

Figure 5‑4: Comparison of the three options for environmental risk management of industrial chemicals  25

Figure 5‑5: Environmental risk management of industrial chemicals in Australia. 31

Figure 7‑1: Distribution of attendance at focus groups (34) 48

Figure 7‑2: Distribution of submission of written responses (11) 48

Figure C‑1: Structure of PBDEs. 65

Figure C‑2: Mean ΣPBDE concentration (ng.g-1 lipid) by gender and age, 2004-05. 66

Figure D‑1: New chemical assessment process for the NICNAS.. 69

Figure H‑1: Proposed proportions of Existing and New chemicals in each concern category based on a review of environmental risk assessments. 85

Figure I‑1: Risk assessment and risk management 91

Figure J‑1: Evaluation Period. 104

 


List of Tables

Table 3‑1: Implementation of selected NICNAS environmental risk management recommendations  13

Table 6‑1: Estimated NPV costs over 10 years for each of the proposed options. 32

Table 6‑2: Present value benefits of reduced remediation costs and public health exposure costs. 36

Table 6‑3: Total impact on business of proposed options (net present value over 10 years) 42

Table 6‑4: Estimated NPV costs over 10 years of developing and administering the National Standard  43

Table 6‑5: Estimated net benefits of the reforms. 45

Table B‑1: Impact analysis summary from Consultation RIS.. 60

Table E‑1: Legislation relating to environmental management of industrial chemicals. 71

Table F‑1: POPs listed on the Stockholm Convention. 74

Table H‑1: Numbers of chemicals in each concern category. 86

Table H‑2: Number of chemicals per year for which a NICNAS environmental risk assessment report is completed  86

Table I‑1: Comparison of the main aspects of risk management in each region. 101

Table J‑1: Indicative estimates of the lifetimea impact of the Standard on high and intermediate concern chemicals  106

Table J‑2: Indicative net benefits – bottom up approach. 107

Table J‑3: Implied net benefits/costs (bottom up approach) 107

Table J‑4: Implied net environmental benefits/costs to the community. 109

Table J‑5: Implied net environmental benefits/costs to the community. 110

Table J‑6: National Standard Development costs. 112

Table J‑7: Commonwealth government cost of legislative and administrative change. 114

Table J‑8: State and Territory government cost of legislative and administrative change. 114

Table J‑9: Annual process costs – Working Group. 115

Table J‑10: Annual process costs – Advisory Committee. 117

Table J‑11: Annual process costs – Decision Maker 118

Table J‑12: Indicative additional resourcing requirements. 119

Table J‑13: Estimated costs of developing and administering the National Standard. 120

Table J‑14: Estimated upfront cost for business. 121

Table J‑15: Implied net benefits/costs to the community. 122

Table J‑16: Summary of the sensitivity analysis on the implied net benefits/costs to the community  123

Table J‑17: Sensitivity analysis on the implied net benefits/costs to the community – 3% Discount Rate  123

Table J‑18: Sensitivity analysis on the implied net benefits/costs to the community – 10% Discount Rate  124

Table K‑1: Stakeholder Groups who provided written submissions or attended focus groups. 125

Table K‑2: Summary of comments in the written submissions received on the Consultation RIS.. 126


Acronyms and Abbreviations

ABS

Australian Bureau of Statistics

AICS

Australian Inventory of Chemical Substances

APS

Australian Public Service

BDE

Brominated diphenyl ether

BFR

Brominated flame retardant

CBA

Cost benefit analysis

CEPA

Canadian Environmental Protection Act 1999

COAG

Council of Australian Governments

CWS

Canada-wide Standards

EC

European Commission

ECHA

European Chemicals Agency

EPA

Environment protection agency/authority

EPHC

Environmental Protection and Heritage Council (the predecessor to SCEW)

EU

European Union

FRLI

Federal Register of Legislative Instruments

FTE

Full-time equivalent

GHS

Globally Harmonized System of Classification and Labelling of Chemicals

ICNA Act

The Commonwealth Industrial Chemicals (Notification and Assessment) Act 1989

IMAP

Inventory Multi-tiered Assessment and Prioritisation

MoU

Memorandum of Understanding

NChEM

National Framework for Chemicals Environmental Management

NICNAS

National Industrial Chemicals Notification and Assessment Scheme

NPV

Net present value

OECD

Organisation for Economic Co-operation and Development

PBDE

Polybrominated diphenyl ether

PBT

Persistent, Bioaccumulative and Toxic

Perc; PCE

Perchloroethylene

PEC

Priority Existing Chemical

PFOS

Perfluorooctane sulfonate

POP

Persistent Organic Pollutant

PV

Present value

REACH

Registration, Evaluation, Authorisation and Restriction of Chemicals

RIS

Regulation Impact Statement

SAICM

Strategic Approach to International Management of Chemicals

SCEW

Standing Council on Environment and Water (the successor to the EPHC)

TSCA

Toxic Substances Control Act (United States)

UN

United Nations

US(A)

United States (of America)


 


1      Overview of the Regulation Impact Statement

1.1      Purpose

This Regulation Impact Statement (RIS) examines options to implement a consistent approach to the environmental risk management of industrial chemicals within Australia, thereby addressing the current fragmented and inefficient framework. Without a consistent approach, there is the potential for infrequent or inconsistent implementation of the environmental risk management recommendations leading to increased risk of environmental damage, increased costs and uncertainty for business and decreased community confidence.

The purpose of the RIS is to provide options for efficient and effective approaches to environmental risk management of industrial chemicals for the protection of the environment and benefit of the community and business.

The RIS has been prepared by the Australian Government Department of the Environment on behalf of the Commonwealth, state and territory governments. It builds on the Consultation RIS released in April 2013 by the former Standing Council on Environment and Water on behalf of the Council of Australian Governments (COAG).

This RIS follows the COAG Best Practice Regulation Guidelines[1] for regulatory proposals made by Ministerial Councils and National Standards.

1.2      Report Structure

The RIS is structured as follows:

·         Chapter 2 provides the background and policy context for the RIS

·         Chapter 3 describes the problem that governments are seeking to address including current regulatory requirements and impacted stakeholders

·         Chapter 4 establishes the principles and objectives for government action

·         Chapter 5 describes the policy options being considered in the RIS

·         Chapter 6 outlines the impact analysis that has been undertaken on each of the options described in Chapter 5

·         Chapter 7 summarises consultation during the development of the RIS

·         Chapter 8 summarises the implementation and review processes

·         Chapter 9 evaluates the proposed reforms and summarises conclusions of the RIS


2      Background and Policy Context

2.1      Policy Context

In 2006, COAG identified chemicals and plastics as a ‘regulatory hotspot’ and requested that the Productivity Commission review Australia’s system of regulating chemicals and plastics across all sectors. The Productivity Commission’s Research Report on Chemicals and Plastics Regulation[2] highlighted that management of environmental risks from industrial chemicals across jurisdictions was fragmented and inefficient, and less effective than other chemical risk management regimes.

The Productivity Commission also recognised that existing national regulatory arrangements for industrial chemicals were not sufficient to provide adequate environmental protection.

The primary finding was that environmental risk management recommendations from the risk assessments of industrial chemicals conducted under the National Industrial Chemicals Notification and Assessment Scheme (NICNAS) were adopted infrequently and inconsistently by state and territory risk management regulators.

The Productivity Commission report made a number of recommendations to address the problems identified. With respect to environmental impacts of industrial chemicals, these recommendations included:

·         an assessment of the costs and benefits of introducing environmental labelling of industrial chemicals (Recommendation 9.1)

·         the establishment of a standards-setting body to develop national environmental risk management decisions for industrial chemicals (Recommendation 9.2)

·         examination of the feasibility of developing a performance measurement framework for monitoring the impact of chemicals in the environment (Recommendation 9.3).

To address the recommendations in the Productivity Commission report, COAG agreed to the recommendations and tasked Environment Ministers with their implementation. The key reform is the creation of a standards-setting body to make national risk management decisions to protect the environment against harmful chemicals (Recommendation 9.2).

The standard-setting body would close a significant gap in current risk management arrangements for the environment and provide for a nationally consistent decision on the environmental risk management of industrial chemicals. This will address currently unmanaged risks which could result in adverse impacts, including inter-generational impacts, to the environment and associated affects on human health.

It will also deliver certainty and greater consistency in regulation for chemical producers and users in Australia. Where risk management responses are implemented, there are typically inconsistencies in approaches across jurisdictions, which can be confusing for the businesses affected by the regulation. This can also lead to high compliance costs on those businesses operating across jurisdictions that have to adhere to the differing rules and regulations. Further, the differing regimes create the potential for imperfect competition where businesses are subject to differing compliance regimes and costs.

Progression of the reforms related to 9.1 and 9.3 will be determined once the form of the standards-setting body has been identified and agreement has been reached, to ensure all three recommendations are implemented efficiently.

2.2      Consultation Regulation Impact Statement

On 11 April 2013, the former Standing Council on Environment and Water (SCEW) released the COAG Consultation Regulation Impact Statement: Chemical Environmental Risks[3] (Consultation RIS). The Consultation RIS was prepared by PricewaterhouseCoopers on behalf of the Commonwealth, states and territories. It proposed three options to develop a standard-setting body to make national environmental risk management decisions for industrial chemicals.

The options in the Consultation RIS ranged from a non-statutory framework where adoption of national decisions by jurisdictions would be non binding (Option 1), through to a framework fully implemented by the Commonwealth (Option 3). The preferred option identified in the Consultation RIS based on the greatest net benefit (Option 2) was a co-operative model underpinned by Commonwealth legislation for decision making (or standard-setting) and jurisdictional legislation for implementation and enforcement.

The findings from the Consultation RIS are outlined in Appendix B.

2.3      Consultation Outcomes

PricewaterhouseCoopers facilitated public consultation on the options presented in the Consultation RIS. They held a series of focus groups across the country and invited written submissions over an eleven week period, ending on 28 June 2013. Approximately fifty people from government agencies, industry bodies, individual companies and non-government organisations attended the focus groups and eleven written submissions were received.

Stakeholders agreed that there is benefit in government reform to protect the environment and improve the effectiveness and efficiency of risk management actions for industrial chemicals that have the potential to cause environmental harm. Feedback received favoured an approach that harmonises implementation of national decisions, is economical and integrated with the proposed changes arising from the review of the NICNAS as well as existing risk management frameworks implemented by states and territories.

For further discussion on Consultation refer to Chapter 7.


3      Nature and Extent of the Problem

 

This chapter of the RIS aims to identify the fundamental problem that the government is seeking to address in order to make a case for government action. In discussing these problems, this chapter will:

·         present evidence on the magnitude of the problem

·         document relevant existing regulation and demonstrate that it is not adequately addressing the problem

·         identify the relevant risks and estimate the probability of an adverse outcome

·         present a clear case for considering that additional government action may be warranted, taking account of existing regulation and any risks

3.1 The chemicals and plastics industry

The chemicals industry is one of the largest economic sectors in the world[4]. Chemicals are found in thousands of products used every day by the general public and the industrial sector. Nearly every manmade material contains one or more of the thousands of chemicals produced by the industry each year. Chemicals provide the community with a wide range of benefits. They are key drivers of industrial and agricultural productivity and facilitate advances in consumer products and medical treatments.

The global chemicals industry has grown steadily over the past several decades. Chemical industry data cited by OECD indicate that global chemical industry output was valued at US$ 171 billion in 1970. In 2010, industry sources valued global output at US$ 4.12 trillion with China being the largest chemical producing country with sales of US$ 754 billion. OECD countries currently account for around 63% of world production, and BRIICS (Brazil, Russia, India, Indonesia, China and South Africa) account for 28%[5].

The Australian chemicals and plastics industry is one of the largest manufacturing sectors in the country, contributing $11.5 billion to the gross domestic product and employing nearly 75,000 people (see Figure 3‑1). The use of chemicals spans a range of industry sectors from cosmetics to mining, and textiles to construction (see Figure 3‑2). Industrial chemical users also range from multinational conglomerates to family-owned small businesses.

This RIS will discuss environmental risk management of industrial chemicals[6]. Industrial chemicals are defined under the Commonwealth Industrial Chemicals (Notification and Assessment) Act 1989 (ICNA Act) and exclude chemicals used in agricultural products and veterinary medicines, therapeutic goods and medicines, and foods and food additives.

Figure 31: Snapshot of the Australian chemicals and plastics industry[7]

Title: Snapshot of the Australian chemicals and plastics industry - Description: Image depicting numbered facts about the Australian chemicals and plastics industry

33.6 billion annual turnover
11.5 billion contributed to GDP
109 out of 111 industries supplied by plastics and chemicals
573,700 workplaces with chemical users
50,000 chemicals approved for use
400,000 trademarked products
74,822 jobs in the chemical industry

Figure 32: Examples of industrial chemical uses in Australia[8].

Title: Examples of industrial chemical uses in Australia - Description: Image depicting the examples of industrial chemical uses in Australia

3.1      The Need for Action

3.1.1      Chemicals can be harmful to the environment

The majority of chemicals in everyday use are of low concern to the environment and human health. However, if not appropriately managed some chemicals may be exposed to the environment at levels that cause adverse effects on the environment, including humans. Historical examples show that the scale of the problems caused by poor management of industrial chemicals can be large and long lasting. Remediation costs that could have been avoided with proper chemicals management can run into hundreds of millions of dollars[9] (See Box 1 and Appendix C).

Box 1

Dioxins in Sydney Harbour

Rhodes Peninsula sits on the Parramatta River near the site of the 2000 Sydney Olympic Games. The Peninsula was the site of industrial activity for over 100 years. This activity included the production of herbicides and pesticides such as 2,4-D, an ingredient that was used in Agent Orange in the Vietnam War. Wastes from the industrial activity were used for land reclamation and were also drained directly into Homebush Bay.

The wastes included toxic chemicals such as dioxins and furans that are listed on the Stockholm Convention for Persistent Organic Pollutants (POPs). POPs are a group of persistent environmental pollutants that accumulate in the food chain, are highly toxic and, in the case of dioxins, can cause reproductive and developmental problems, damage the immune system, interfere with hormones and cause cancer[10]. These chemicals have extended into the Parramatta River and Sydney Harbour resulting in some of the highest concentrations of dioxins in major cities around the world. Dioxin concentrations are approximately ten times higher than Tokyo Bay and 50 to 100 times higher than Hong Kong Harbour[11].

The New South Wales Environment Protection Authority (and its predecessor entities) has been regulating the clean-up of this area for over 20 years. Around $200 million has been spent by industry and the NSW government to clean up the contaminated sediments around the Peninsula[12].

Remediation of Sydney Harbour continues to this day and the NSW government has banned commercial fishing in Sydney Harbour due to high levels of dioxins that accumulate in fish. Recreational fishing is still allowed, however the NSW government recommends that fish caught to the west of the Sydney Harbour Bridge are not consumed[13].


 

Flame Retardants in Antarctica

Flame retardants are chemicals that are added to manufactured products to suppress or delay the production of flames and inhibit the spread of fire. They are found in every household in the country in articles such as furniture, clothing, electronics, plastics and building materials. Some flame retardants are persistent and can accumulate in the environment. Several flame retardants have been listed on the Stockholm Convention for Persistent Organic Pollutants due to their bioaccumulation potential, toxicity, persistence and potential for long range transport[14].

Apart from some flame retardants being detected in blood samples, breast milk and almost all indoor air, they have also been detected in the world’s pristine environments such as Antarctica. Areas of Antarctica that are virtually untouched by human activity have detectable levels of flame retardants, confirming that some flame retardants are transported considerable distances from their source[15],[16]. Flame retardants have been detected in Antarctic lichens and mosses which are considered good indicators of atmospheric pollution as they absorb contaminants directly from the air[17]. They have also been detected in eggs of Antarctic seabirds such as chinstrap and gentoo penguins, which are non-migratory species endemic to Antarctica[18].

 

Globally, there are numerous examples of chemicals that were widely used for many years before it was realised that they were having serious adverse impacts on the environment and human health. Some of these toxic chemicals persist in the environment for many years, are distributed and transported in air and water worldwide and accumulate in the food chain harming wildlife and humans.

Risk of exposure of a chemical to the environment is the central consideration in the need for environmental management of chemicals. Chemicals may be released to the environment at any stage during their lifecycle. Figure 3‑3 gives an overview of the lifecycle of chemicals as well as the exposure routes from different stages during the lifecycle, noting all stages have the potential for environmental exposure. Because of the breadth of industries that use industrial chemicals in Australia, these chemicals may be released at any number of locations across the nation every day. This could include release from industrial, commercial and domestic sources.

All chemicals that are managed appropriately should present a low risk to the environment. However, whether through a lack of knowledge or improper management, some hazardous chemicals are causing harm to the environment. Indeed, Australia has a legacy of environmental damage as a direct result of chemical use, industrial processes and waste disposal (See also Appendix C).

Figure 33: Chemical lifecycle and exposure[19]

Title: Chemical lifecycle and exposure - Description: image depicting the Chemical lifecycle and exposure

 

3.1.2      The current regulatory arrangements are not fully effective

In general, responsibility for the environmental management of chemicals is shared between jurisdictions. The Commonwealth undertakes most hazard and risk assessments at a national level and contributes to international chemicals management through provision of expertise and completion of joint assessment processes. Industrial chemicals are assessed for their risk to human health and the environment by the Commonwealth under the ICNA Act and National Industrial Chemicals Notification and Assessment Scheme (NICNAS). Further details regarding NICNAS and industrial chemicals regulations in Australia are provided in Appendix D. Risk management of industrial chemicals is outside the scope of the ICNA Act.

States and territories typically deal with implementation of risk management approaches and on ground compliance and enforcement. Each jurisdiction has its own regulations regarding the environmental management of industrial chemicals. The state and territory agencies and legislation for environmental risk management of industrial chemicals are outlined further in Appendix E.

Under the ICNA Act, NICNAS make recommendations to risk managers in the Commonwealth, states and territories for appropriate management of chemicals. The aim of risk management is to limit exposure of some chemicals in the workplace, to the public or to the environment. In terms of environmental risk management, states and territories are responsible for determining how best to develop appropriate and implementable risk management actions for businesses to comply with.

It is difficult to determine whether environmental damage as a result of chemical use as described in Box 1 would have occurred to a similar extent under the current chemicals framework. Assessing the effectiveness of environmental protection regulation in reducing the impact of chemicals on the environment is a difficult task. There are little data on environmental outcomes in Australia, let alone data specifically relating to the impact of chemicals[20]. The assessment of chemicals under NICNAS has increased the information about chemicals to governments, industry and the community, and the risk management of chemicals implemented by states and territories has lessened the risks of assessed chemicals to some degree. However, as noted by the Productivity Commission, “there is no institutional mechanism to coordinate the implementation of ... NICNAS’s environmental recommendations by the states and territories.” The adverse effects on the environment of not appropriately managing industrial chemicals can be expected to continue if the current gap in the regulatory framework is not adequately addressed. Figure 3‑4 outlines the current regulatory framework for environmental management of industrial chemicals, highlighting where the gap in the current regulatory framework exists.

Figure 34: Current framework for environmental management of industrial chemicals

Title: Current framework for environment menagement of industrial chemicals - Description: Image depicting the current framework for environment menagement of industrial chemicals

The central finding of the Productivity Commission report was that, while ‘[c]urrent regimes are broadly effective in managing risks to health and safety’, they are ‘less effective in managing risks to the environment’[21]. The current framework for the management of risks to human health involves the process of standard-setting at the Commonwealth level which provides the states and territories, businesses and the public a single reference point for management of industrial chemicals for the purposes of public health and workplace health and safety. For example, if a chemical is found to be hazardous to human health, it may be scheduled on the Standard for Uniform Scheduling of Medicines and Poisons (The Poisons Standard). Each schedule has associated management requirements depending of the level of risk of the chemicals. The current framework for management of industrial chemicals for human health is outlined in Figure 3‑5.

Figure 35: Current framework for management of industrial chemicals for human health

Title: Current framework for management of industrial chemicals for human health - Description: Image depicting the current framework for management of industrial chemicals for human health

The current regulatory arrangements for environmental risk management of industrial chemicals are not providing a consistent, efficient and effective approach industrial chemicals management. This has the potential to result in negative externalities[22] that may impact the Australian environment and human health, such as increased costs to businesses and the community and erosion of public confidence.

NICNAS fulfils its statutory requirement to assess the risks to the environment of industrial chemicals based on advice from the Department of the Environment. States and territories fulfil their current requirements under their own legislation. The gap in the framework lies where states and territories determine the most appropriate risk management for chemicals, based on local conditions. As the Productivity Commission noted “[t]here are some differences in the way that each state and territory regulates for environmental protection, including with respect to chemicals and plastics. This can reflect the different environments across jurisdictions and the manner in which different regulatory regimes have evolved.” However, this results in inconsistency which is discussed further in Section 3.1.2.1

The scale of the problem is realised with knowledge of the numbers of chemicals for which a NICNAS risk management recommendation is made. On average, between 150 and 200 environmental risk assessment reports are prepared for new industrial chemicals by NICNAS per year. Typically 25 to 45 of these chemicals are estimated as potentially having environmental impacts if not appropriately managed.

The current framework is inadequate to deal with the volume of chemicals needing risk management. In the absence of a national framework for ensuring the uptake of environmental risk management recommendations, past actions to protect the environment have required special arrangements. These have been restricted to a few groups of chemicals, typically those with international implications. Examples include those dealt with under the National Strategy for the Management of Scheduled Wastes that was developed by the Australian and New Zealand Environment and Conservation Council from July 1991 to November 1992[23].

With the substantial development time needed for this approach, which did not have an existing structure to facilitate implementation, it is one which could only be used for a small number of high priority existing chemicals and can only accommodate decision making over years rather than days. Such an approach would not be appropriate for the number of new-to-market chemicals with potential environmental impacts which come through the NICNAS new chemicals process each year.

In addition to new chemicals requiring risk management, the number of industrial chemicals requiring action by jurisdictions may increase markedly over the next decade if NICNAS continues its assessment of the 38,500 industrial chemicals that were grandfathered onto the Australian Inventory of Chemical Substances (AICS). These chemicals, currently allowed to be used in Australia, have not previously been assessed for their risks to human health or the environment.  Initial indications arising from the trial of the Inventory Multi-tiered Assessment and Prioritisation (IMAP) framework set up to assess the chemicals suggest that a portion would require some level of risk management. This portion is estimated to be up to 45%[24]. Figure 3‑6 highlights the likely numbers of chemicals that may need management in order to protect the environment.

Figure 36: Proportions of industrial chemicals that may require environmental risk management to prevent damage to the environment[25]

Title: Proportions of industrial chemicals that may require environmental risk management to prevent damage to the environment - Description: Image depicting the proportions of industrial chemicals that may require environmental risk management to prevent damage to the environment.

 

Other major deficiencies for the environmental management of industrial chemicals that are resulting in an inefficient and ineffective regulatory framework are detailed below.

3.1.2.1     Duplication and Inconsistency

A significant amount of work is required for states and territories to translate NICNAS recommendations into practical risk management actions. Environmental risk management actions are often not implemented, or are only partially addressed on a jurisdictional basis. This regulatory complexity and inconsistency leads to confusion, gaps, duplication and increased costs and uncertainty for business. Businesses and the community do not have a single point of reference for coordinating decisions at a national level.

Each state and territory government is required to develop its own response to an interpretation of NICNAS recommendations. Overall, advice from state and territory governments notes this can have high administration costs that may lead to governments, which are resource-constrained, not prioritising action to protect the environment. This is particularly an issue in cases where action is shown to be necessary to avoid the risk of harm.

Where action does occur there are typically inconsistencies in approaches across jurisdictions, which can be confusing for the businesses affected by the regulation. The current system imposes unnecessarily high compliance costs on those businesses operating across jurisdictions that have to adhere to the differing rules and regulations. This can create the potential for imperfect competition where businesses are subject to differing compliance regimes and costs.

The inconsistency in the uptake of environmental risk management recommendations from NICNAS is shown by the results of a survey that was sent to jurisdictions to inform the development of the Consultation RIS. Respondents were asked to indicate whether and how their jurisdiction had implemented a number of NICNAS recommendations. Only one of the recommendations was implemented by all jurisdictions (Table 3‑1).


 

Table 31: Implementation of selected NICNAS environmental risk management recommendations[26]

NICNAS recommendation

Jurisdiction

A

B

C

D

Triclosan

 

 

 

 

Recommendation 7

Yes

Yes

Yes

Yes

Recommendation 8a

Yes

No

No

Yes

Recommendation 8b

Yes

No

No

Yes

Recommendation 8c

Yes

No

No

No response

Sodium cyanide

 

 

 

 

Recommendation 4a

Yes

Not directly

No

Not directly

Recommendation 4b

Yes

Not directly

No

Not directly

Recommendation 5a

Yes

Not directly

No

Not directly

Formaldehyde

No

No

Not applicable

Not directly

Methylcyclopentadienyl Manganese Tricarbonyl

Yes

Not directly

No

No response

Tetrachloroethylene

Yes

Not directly

Not applicable

No response

 

The majority of industrial chemicals are expected to be used in multiple jurisdictions or nationally. Consistency in uptake by affected jurisdictions is necessary for effective environmental protection and to avoid costs and confusion for businesses using the chemical in different jurisdictions. It is important that potentially harmful chemicals can be safely managed as use of these chemicals may offer significant benefits to the community and business innovation provided that their potential environmental impacts are avoided.

In 2008, NICNAS commissioned a study on the Uptake of NICNAS’s Priority Existing Chemical Recommendations by Government Chemical Management Bodies[27]. The paper supports the Productivity Commission’s findings and also found that recommendations ‘were not generally directly adopted by states and territories’ though it was noted that the intent of the recommendations were at times addressed in broader projects, generic actions or legislation by states and territories.

The reasons identified by the Productivity Commission for the infrequent and inconsistent uptake of risk management measures based on NICNAS recommendations were:

·         First, while the hazards and risks of new and existing chemicals can be assessed under NICNAS, its environmental risk management recommendations are not mandatory. It is left to the discretion of jurisdictions to implement risk management measures based on NICNAS recommendations.

·         Second, unlike other policy areas (e.g. poisons scheduling, transport and workplace safety), there is no national body to consider NICNAS environmental risk management recommendations and develop detailed and appropriate risk management decisions for implementation by jurisdictions.

·         Third, the provision for consultation with state and territory environment agencies during the development of the NICNAS risk management recommendations has been limited, which has resulted in recommendations that were impractical to implement in some jurisdictions (primarily due to the variance in control measures, policy settings and infrastructure available across jurisdictions). There is a Memorandum of Understanding (MOU) between the Ministers with responsibility for industrial relations in each jurisdiction relating to NICNAS, with a committee that meets to discuss implementation of NICNAS recommendations. While the intention was that the Ministers were signing on behalf of their jurisdiction, the PC noted that it has largely been ineffective with respect to environmental recommendations.

It is important to note that these gaps reflect the shorter history that chemical regulation has had to evolve to protect the environment compared with longer established sectors, such as workplace health and safety, which already have in place mechanisms to address similar problems. In effect, the regulatory system for environmental protection is not yet complete.

3.1.2.2     Information Failures

A key gap in environmental regulation is the lack of knowledge of the environmental impacts of chemicals. The Productivity Commission noted that: ‘Assessing the effectiveness of environmental protection regulation in reducing the impact of chemicals on the environment is a difficult task. There are little data on environmental outcomes in Australia, let alone data specifically relating to the impact of chemicals’[28].

Regulators are limited in their capacity for ensuring that businesses handling, storing, using or disposing of industrial chemicals have ready information to assist them to minimise the risk of environmental damage from chemicals. This increases the risk that chemical hazards will not be correctly managed.

Currently, there are no mechanisms for gathering and utilising information from existing environmental risk management approaches overseas. There are also no mechanisms for formal sharing of information on the impacts of industrial chemicals amongst experts in environmental risk managers within Australia. Therefore, there is reduced capacity for environmental risk managers to appropriately tailor risk management actions based on the level posed to the environment by different chemicals.

A hypothetical example of a chemical of significant environmental concern progressed through the current framework is presented in Box 2.

 

Box 2

A hypothetical example of the impact of inconsistency in the current regulatory framework[29]

A chemical company wishes to import a new chemical into Australia. They prepare the appropriate documentation and submit the notification complete with tests to NICNAS.

The Department of the Environment reviews the information and prepares advice for NICNAS. NICNAS finalises the report, seeks agreement on the outcome with the notifier, and publishes the report.

The report outlines that the chemical is of significant environmental concern based on the hazards of the chemical and the potential for environmental exposure. The report recommends that:

Industry should comply with Commonwealth and state and territory legislation, and implement measures to ensure risks to the environment from releases of the chemical are not unreasonable. State and territory governments should monitor compliance”[30]

States and territories review the report and recommendation, and decide on an appropriate response for their jurisdiction.

For example, Jurisdiction A has a high level of industrial activity, high population density around the industrial areas and the chemical of concern is known to be used by a company in this area. Jurisdiction B has a small number of industrial sites, a lower population separate from the industrial area and the chemical is not likely to currently be used.

Jurisdiction A takes a stringent approach to risk management with highly prescriptive risk management requirements and an effective compliance and enforcement operation.

Jurisdiction B decides not to focus resourcing on this particular chemical.

In both jurisdictions, the chemical’s level of concern to the environment remains the same. However, both jurisdictions have taken different approaches to managing the risks of the chemicals. The different approaches may not necessarily be an immediate issue, as they are based on current trends in the use of the chemical.

After five years, the chemical in listed on the Australian Inventory of Chemicals Substances (AICS). Once on the AICS, anyone can import the chemical to use for its assessed purpose. The chemical is now used by a different business in Jurisdiction B, but no one is aware of this and no risk management response is in place. The business is also unaware of the risk management requirements that Jurisdiction A is using, and assumes that releasing the chemical to the environment is not necessarily a problem. This results in environmental contamination that needs to be remediated.

Duplication in the system can also be an issue for businesses if both Jurisdiction A and B decide to take action but do so differently. For example, if they both prescribe different risk management requirements then a business operating in both jurisdictions would have to comply with both requirements, doubling their reporting and compliance efforts.

Filling the regulatory gap by setting standard risk management requirements will enable NICNAS to make focussed risk management recommendations, and provide a single point of reference for both governments and industry to directly reference that would be applicable now and in the future.

3.1.3      Australia must meet requirements under international obligations

Australia has a number of obligations to regulate chemical environmental risks under international law. These include Council Decisions produced under the Organisation for Economic Cooperation and Development (OECD) Chemicals Programme, the Stockholm Convention on Persistent Organic Pollutants, the Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade, the Minamata Convention on Mercury, and the Montreal Protocol on Substances that Deplete the Ozone Layer. Please refer to Appendix F for further details.

3.2      Summary

Industrial chemicals are used every day by everyone in a wide range of products and a range of uses including plastics and rubbers, paints, fuels, manufacturing, mining, household products, toiletries and cosmetics.

Some chemicals are harmful to the environment. If they are not managed appropriately, they may damage the environment. Historical examples of environmental contamination indicate that remediating sites can take decades, cost hundreds of millions of dollars and impact the community through reduced access to resources.

While the regulatory framework for chemicals has improved over the last two decades, the Australian regulatory framework for the management of risks to the environment from industrial chemical use remains complex. It is duplicative, nationally inconsistent, ineffective and inefficient. The key gap in the regulatory framework for environmental risk management of industrial chemicals is the lack of an institutional mechanism to coordinate the implementation of NICNAS’s environmental recommendations by the states and territories.There are also information failures with the key gap being lack of knowledge of the environmental impacts of chemicals, both by businesses and the community. This results in negative impacts on the environment and community, and additional costs to businesses.


4      Objectives of Government Action

 

The objectives of government action have been designed to address the problems associated with the current environmental chemicals management framework. The management of environmental risks from industrial chemicals across jurisdictions is fragmented and inefficient, and less effective than other chemical risk management regimes, such as workplace health and safety and public health. The overarching objectives of the reforms that address these problems are outlined in Box 3.

Box 3

Overarching Objectives

·          To achieve better protection of the environment through improved management of the environmental risks posed by industrial chemicals

·          To provide a nationally consistent, transparent and predictable approach for environmental risk management of industrial chemicals to governments, industry and the community

During the consultation process, a number of refinements to the chemical reforms were identified. The refinements to the reforms have been guided by the overarching objective and the following principles:

·         Administration and compliance costs, both for government and industry, are kept as low as possible, and are appropriate for the scope of the regulation.

·         The standard setting process should integrate smoothly with the NICNAS risk assessment process and relate appropriately to the other related risk-management frameworks (e.g. poisons scheduling, workplace health and safety, and dangerous goods transport).

·         Implementation of the standards within jurisdictions should readily integrate with other existing jurisdictional processes, such as environmental licensing or hazardous waste regulation.

·         The process and its outcomes should be as transparent and predictable as possible for industry and the community.

·         The reform should generate positive outcomes for business by providing greater consistency across jurisdictions.

 


5      Statement of Options for Action

 

In order to address the objectives of the reforms and the principles outlined in Chapter 4, refinements have been made to the proposed options relative to those in the Consultation RIS. The options proposed establish arrangements equivalent to those that operate in the other sectors such as poison scheduling, transport and workplace health and safety and align with international practices for environmental risk management.

The principal area of policy refinement relates to how the ‘standard-setting body’ as described in the Consultation RIS would make decisions on risk management. The Consultation RIS suggested that the standard-setting body would translate high level environmental risk management recommendations from NICNAS into practical risk management actions by making individual decisions on a case by case basis.

The refined approach is to develop a National Standard for the environmental risk management of industrial chemicals, further discussed in Section 5.1. A National Standard approach to environmental risk management of industrial chemicals is proposed to be the foundation for any of the proposed options, except the base case where current environmental risk management arrangements will remain unchanged. This will provide jurisdictions with one decision on required environmental risk management outcomes and will assist industry by having a nationally consistent approach (Figure 5‑1).

Figure 51: Proposed framework for the environmental management of industrial chemicals

Title: Proposed framework for the environmental management of industrial chemicals - Description: Image depicting the proposed framework for the environmental management of industrial chemicals

The three options for reform are differentiated in the same manner as those proposed in the Consultation RIS. However, the options have been refined to incorporate the Standard approach. It is proposed that this would be underpinned by a legislative instrument for Option 2 and Option 3, or via a non-statutory approach under Option 1.


 

Incorporating the Standard approach into each of the options is therefore an evolution of the work in the Consultation RIS and does not change the fundamental nature of the options presented in this RIS. The following sections outline the National Standard and the three options to amend the current regulatory arrangements. These options are:

Image depicting the three options for implementation.
Option 1: Non-Statutory Framework
The National Standard would be established in a non statutory framework and implementation of decisions by jurisdictions would be non binding
Option 2: Cooperative Framework
The National Standard and decision making powers would be established under Commonwealth legislation, with automatic adoption under jurisdictional legislationf or implementation and compliance.
Option 3: Commonwealth Framework
The National Standard and associated compliance measures would be established under a Commonwelath legislative framework

5.1      The National Standard

A National Standard approach to environmental risk management of industrial chemicals is proposed, which is equivalent to frameworks already in place such as the management of industrial chemical risks to human health (see Section 3.1.2).

In this context the Standard refers to a mechanism by which a Decision Maker or delegate can ‘schedule’ or assign industrial chemicals to an established set of required risk management actions based on the chemical’s level of concern[31]. This is to ensure that there are nationally consistent risk management outcomes.

The final National Standard will be developed and refined in consultation with stakeholders from government, industry and the community should the progression of one of Options 1 to 3 be agreed to by governments. Development of the Standard will include consideration of core principles driving the National Standard concept, and determining risk management outcomes and the required characteristics for each category, class or schedule of chemicals. The core principles of the National Standard are outlined in Box 4.

Box 4

Five core principles of the National Standard

The National Standard will:

1.     assist in achieving protection of the environment though improved risk management of industrial chemicals

2.     provide government, industry and the community with streamlined, transparent and consistent approaches to environmental risk management of industrial chemicals

3.     categorise or classify chemicals based on their level of concern to the environment, taking into consideration environmental risks, inherent hazard characteristics and relevant socio-economic aspects

4.     have risk management actions that are outcomes-based which are defined, yet flexible and publicly available

5.     provide opportunities for consultation on proposed risk management approaches, if required.

 

5.1.1      Expected advantages of a National Standard

The National Standard has been designed to address the two overarching objectives of the reforms; namely to increase environmental protection and to provide a streamlined, efficient and effective framework for government, business and the community for environmental risk management of industrial chemicals. 

 

Some of the design features of the National Standard include:

·         Uniformity across Australia of environmental risk management outcomes for industrial chemicals for ease of implementation and increased environmental protection

·         Upfront development of the Standard to ensure greater transparency, predictability, certainty and consistency for industry and the community

·         Alignment with international standards where appropriate,  to inform the development of the National Standard

·         A streamlined mechanism to address the increased number of existing chemicals that are likely to undergo risk assessments

·         Alignment of  processes for environmental scheduling to integrate with existing timeframes for NICNAS risk assessments, where possible, or follows seamlessly without imposing lengthy time burdens on industry

·         An outcomes-based risk management approach to encourage continued innovation in environmental protection and also enable industry to keep costs related to risk management as low as possible

·         Ensuring that scheduled decisions are easily accessible and searchable to enable businesses to make informed decisions

·         Enabling the accelerated scheduling of low concern chemicals to ensure that an expert body and Decisions Maker’s time is used more efficiently, focusing on chemicals of  higher concern to the environment

·         Potential for development of self assessment tools for industry leading to informed decision making and incentives to seek out ‘greener’ options

The benefits of the National Standard are explained further in Chapter 6: Impact Analysis.

5.1.2      Processes under the National Standard

During an industrial chemical risk assessment conducted by NICNAS, a recommendation is expected to be made to the Decision Maker under the National Standard as to the most appropriate categorisation and risk management actions for the chemical, based on its environmental risks and hazards.

The proposed scheduling process is outlined in Figure 5‑2. For further information refer to Appendix G. Where possible, the Department of the Environment will work with NICNAS to align processes to ensure that the environmental risk management decision making process integrates with the existing timeframes or follows seamlessly whilst limiting time burdens on industry.

Appropriate timeframes will be determined during consultation with governments, industry and the community around implementation and may be dependent on the level of advice and consultation requested or required during the decision making process.

As the National Standard will have pre-defined risk management outcomes appropriate to the level of concern of a chemical, timeframes for decision making are expected to be minimal. As the National Standard will be transparent and predictable, risk management decisions may be anticipated prior to chemical notification and this will also streamline the process.

Figure 52: Proposed scheduling process under the National Standard

Title: Proposed scheduling process under the National Standard - Description: Image depicting the proposed scheduling process under the National Standard

 

Figure 5‑3 provides a high level outline of the proposed National Standard involving three primary categories of concern – High, Intermediate and Low Concern. The majority of chemicals are expected to fall in the Low Concern category where limited or no risk management actions are required. Few chemicals are expected to fall into the High Concern category. The percentages of chemicals assessed each year that are expected to fall into each concern category are outlined in Appendix H.

Figure 53: Conceptualisation of the National Standard[32]

Image depicting the Nation Standard for Concern categories for chemicals.
Low concern are checmials that pose a low or very low risk to the environment and are not highly hazardous to the environment.
Intermediate concern are chemicals that post a material risk to the enviornment and are hazardous to the environment and are hazardous to the environment.
High concern are chemcials that pose a significant risk to the environment and are highly hazardous to the environment.


 

5.2      The Options for Action

In order to establish the proposed National Standard to strengthen the efficiency and effectiveness of the regulatory framework for the environmental risk management of industrial chemicals, three mechanisms for implementation are proposed. These implementation options build from the base case and include a non-statutory approach, a cooperative approach and a system fully implemented by the Commonwealth.

In all options, environmental risk management decision would be scheduled in accordance with the National Standard to ensure effective, transparent and consistent environmental risk management.  However, as described in Figure 5‑4 there are differences in the following areas:

·         The Decision Maker and the process by which decisions are made including associated expert bodies;

·         Implementation in terms of how the framework for adoption of decisions would be established

·          Responsibility for compliance and enforcement of decisions.

Under all options, industrial chemicals, both existing and new, would continue to be assessed in accordance with the ICNA Act and an environmental risk management recommendation would be made. Consistent with the Productivity Commission recommendations, the risk management of industrial chemicals would be a separate decision making framework to the existing NICNAS risk assessment framework. However, the processes would be integrated. There is no intent in any of the options to reconsider the hazard assessment, exposure assessment and risk characterisation conducted by the NICNAS.

All options include the upfront development of the National Standard, including the criteria for categorisation of chemicals. This would be a collaborative process between jurisdictions, in consultation with industry and the community.

It is proposed that all high concern chemicals would be reviewed by the Working Group (Option 1) or the Advisory Committee (Options 2 and 3). Low and intermediate concern chemicals would only be considered by these experts if the notifier requests a review. If no review is requested, the risk management recommendation would be streamlined to the Decision Maker for scheduling.

Figure 54: Comparison of the three options for environmental risk management of industrial chemicals

Title: Comparison of the three options for environmental risk management of industrial chemicals - Description: Image depicting the comparison of the three options for environmental risk management of industrial chemicals

 

5.2.1      Base Case – Business-as-Usual

The base case assumes that all levels of government maintain the current framework for managing environmental risks associated with the handling, storage, use and disposal of industrial chemicals. In other words, the base case involves a continuation of the status quo. This is the baseline against which the three proposed options will be compared.

The base-case includes:

·         NICNAS continuing to develop its high level environmental risk management recommendations as part of the risk assessment process

·         environmental risk management recommendations implemented by the states and territories in accordance with existing frameworks

·         maintaining the current efforts by jurisdictions to improve the interface between NICNAS and state and territory environmental agencies, through existing frameworks such as National Chemical Environmental Management Framework (NChEM).

The current regulatory arrangements for environmental risk management of industrial chemicals are described in detail in Section 3.1.2 and Appendix F.

5.2.2      Option 1 – Non-statutory framework

Option 1
The National Standard would be established in a non-statutory framework and implementation of decisions by jurisdictions would be non-binding.

Under Option 1, the National Standard, the process for making risk management decisions and implementation of risk management decisions, would not be underpinned by a statutory decision making framework. Environmental risk management decisions made under the National Standard would be non-binding on jurisdictions.

 The primary features of this option would include the establishment of an Intergovernmental Agreement or a Ministerial Agreement between environment ministers which would include:

·         establishment of the National Standard.

·         establishing and outlining the roles and responsibilities of the working group and the Decision Maker.

-       The working group is proposed to be comprised of Commonwealth, state and territory representatives to review the NICNAS recommendations and make further recommendations if requested, based on the National Standard.

-       The Decision Maker, likely to be the chair of the working group as agreed by the jurisdictions, would consider advice from the working group and make a decision for scheduling.

·         establish the framework by which jurisdictions would review and implement the decisions using appropriate mechanisms or maintain their status quo.


 

5.2.3      Option 2 – Cooperative framework

Option 2
The National Standard and decision making powers would be established under Commonwealth legislation, with jurisdictional legislation for implementation and compliance.

Under Option 2, the National Standard would be established under Commonwealth legislation to assist in national consistency.  In line with the current responsibilities of states and territories for environmental risk management, each jurisdiction would adopt and enforce scheduling decisions in accordance with their legislative frameworks.

The primary features of this option would include:

·         establishment of the National Standard in Commonwealth legislation

·         establishing and outlining the roles and responsibilities of the advisory body and the Decision Maker.

-       The advisory body is proposed to be made up of individuals with relevant expertise with the environmental management of chemicals, including specific disciplines such as environmental toxicology, environmental risk management and chemistry.

-       The Decision Maker who is likely to be a delegate of the Commonwealth Minister for the Environment would consider advice from the advisory body and make a decision for scheduling.

·         Decisions on environmental risk management actions would be made under new Commonwealth legislation, with states and territories automatically adopting and implementing decisions under their legislation for matters which they are responsible. The Commonwealth would only implement those components of the decision appropriate to its responsibilities.


 

5.2.4      Option 3 – Commonwealth framework

Option 3
The National Standard and associated compliance measures would be established under a Commonwealth legislative framework.

Under Option 3, Commonwealth legislation would be developed that establishes a National Standard. The new Commonwealth legislation will also specify compliance and enforcement measures to be applied nationally and it is likely that jurisdictional enforcement bodies and officials could be given relevant compliance and enforcement powers under the Commonwealth legislation.

Much like Option 2 the process for making risk management decisions will be underpinned by statutory decision making framework. However, under Option 3 a new national regulator would be established to enforce decisions in accordance with Commonwealth legislation. 

The primary features of this option would include:

·         establishment of the National Standard in Commonwealth legislation

·         establishing and outlining the roles and responsibilities of the advisory body and the Decision Maker.

-       The advisory body is proposed to be made up of individuals with relevant expertise with the environmental management of chemicals, including specific disciplines such as environmental toxicology, environmental risk management and chemistry.

-       The Decision Maker who is likely to be a delegate of the Commonwealth Minister for the Environment would consider advice from the advisory body and make a decision for scheduling.

·         establishment of a national regulator for compliance and enforcement

5.3      International Consistency

The proposed approach is consistent with the objectives of the Strategic Approach to International Chemicals Management (SAICM) and similar to approaches to environmental risk management of industrial chemicals adopted in other advanced economies. In particular, the National Standard aims to prioritise pollution prevention and minimise chemical risks to the environment while providing a transparent, efficient and effective approach to environmental risk management of industrial chemicals.

One of the overarching objectives of SAICM outlined in its Policy Strategy[33] is Risk Reduction with aims including the:

·         minimisation of chemical risks to the environment and human health

·         implementing transparent, comprehensive, efficient and effective risk management strategies based on scientific understanding

·         prioritising protection of vulnerable ecosystems

·         ensuring chemicals with unreasonable and unmanageable risks are no longer produced or used

·         prioritisation of pollution prevention

·         application of a precautionary approach to chemicals management.

Many advanced economies have worked towards achieving the objectives of SAICM. Canada, the European Union, the United States of America and Japan have approaches to environmental risk management of industrial chemicals that mirror the objectives of SAICM and some, along with Australia, contribute to the United Nations Environment Programme (UNEP) and SAICM. Details of the approaches to environmental risk management of industrial chemicals of other advanced economies are detailed in Appendix I.

In October 2014, the Council of Australian Governments agreed to explore adopting, as a general principle, trusted international standards or risk assessment processes for systems, services and products, unless it can be demonstrated that there is good reason not to.

International standards in the area of sound chemicals management, such as SAICM, guidance from the OECD and ISO 31000:2009 (Risk management – principles and guidelines), outline principles and generic guidelines for risk management approaches. They are not intended to promote uniformity of risk management across organisations or governments.

The proposed options are aligned with international processes and relevant international environmental standards would be considered and utilised in the implementation stage of the National Standard.

The international standard approaches identify the importance of risk management plans and frameworks being designed and implemented to take into account the varying needs of the particular country. The importance for countries to develop and implement their own chemical frameworks is fundamentally due to differences between jurisdictions internationally. These differences include both physical environmental variations between countries and differences in policy settings and management infrastructure.

Australia, like other countries, has a unique environment and risk management actions need to be tailored to meet the specific risks for a particular location. Risks from industrial chemical use not only vary between countries, but also vary between cities/towns. In particular, environmental risk assessments consider a range of location specific exposure information, including population, waste water and sewage treatment capabilities and volumes of water in receiving environments such as rivers, ponds and lakes. Australia has a naturally dry environment and therefore the risk assessment methods used in Australia account for creeks having the potential to be composed entirely of effluent from industry. It should also be noted that NICNAS already considers hazard assessments produced overseas and uses these assessments to inform the risk assessment (see Appendix A for definitions of hazard and risk).

Risk assessment recommendations specific for the Australian context will inform the risk management decisions, which will also be tailored to ensure states and territories have the infrastructure available for appropriate protection of the environment.

As described above, the proposed options for environmental risk management of industrial chemicals in Australia factor in these considerations and align with and incorporate the guidance and principles outlined in international standards.

5.4      Summary of Options for Action

As identified in the 2008 Productivity Commission Report, the base case has not delivered effective, nationally consistent and timely decisions to protect the environment that can be readily adopted and implemented within all jurisdictions. If the decision was made to continue the current framework, the identified weaknesses that have discouraged the national uptake of environmental risk management decisions would continue. This would therefore not meet the objectives of the proposed reforms as there would still be:

·         an increased risk to the environment and potential adverse impacts to human health

·         no mechanism for all jurisdictions to agree and implement national decisions on environmental risk management.

A further consideration is the likely increase in the number of new and existing chemicals that undergo a NICNAS risk assessment. This is likely to further increase the pressure on the fragmented and inefficient current framework (Figure 5‑5 infra).

The proposed options to address the identified problems in the base case have been refined to each include the development of a National Standard approach to the environmental risk management of industrial chemicals.

The proposed options are differentiated in the same manner as the Consultation RIS and include a non-statutory framework, a cooperative model and a framework fully implemented by the Commonwealth.

In addition to the intention of achieving better protection of the environment through risk management of industrial chemicals, a Standard approach would provide greater transparency, predictability, certainty and consistency for industry and the community.

Figure 55: Environmental risk management of industrial chemicals in Australia

Title: Environmental risk management of industrial chemicals in Australia - Description: Image depicting the environmental risk management of industrial chemicals in Australia


6      Impact Analysis

 

An impact analysis seeks to identify and, where possible, quantify the costs and benefits of each of the options relative to the base case or status quo. The purpose of the impact analysis is to provide stakeholders with an indication of the likely impacts that would arise from implementing the options, and provide decision makers with an indication of the option that is likely to deliver the greatest benefit to the community as a whole.

In summary, the impact analysis indicates that there is likely to be a net benefit to the community as a result of implementing any of the options relative to the base case (Table 6.1).

·         Option 2 is estimated to be the least costly option in order to deliver the described benefits.

·         Compared to Option 2, Option 1 is estimated to be more costly to implement and only achieve some of the benefits of nationally consistent risk management for environmental protection and reduced burden on industry.

·         Compared to Option 2, Option 3 is more costly to implement because it involves establishing new national legislation and a regulator, with no additional benefits.

Table 61: Estimated NPV costs over 10 years for each of the proposed options

 

Option 1

Option 2

Option 3

 

$million

$million

$million

Impact on the community

109

181

 181

Impact on industry

-37

-59

-60

Impact on government

-15

-10

-16

Total net benefit

57

112

 105

Note: Numbers may include rounding errors.

6.1      Methodology

The proposed National Standard would change the decision making and governance framework for environmental risk management of industrial chemicals from a fragmented inconsistent system to a nationally consistent approach. The Standard would result in consistent environmental risk management decisions which may change the way that industrial chemicals are regulated. It is these future regulatory requirements that are expected to have an impact on businesses, government, the community and the environment.

A cost benefit analysis was undertaken by the Centre for International Economics to update the impact analysis presented in the Consultation RIS based on the refinements to the options including the National Standard approach. A number of limitations to the data were identified that make it difficult to determine the potential impacts on business and the community from the proposed options, predict the impacts over the life of regulation and monetise the impacts by business sector, by jurisdiction and nationally. Appendix J has further discussion on the data limitations. These factors result in a greater than usual level of uncertainty in conducting a cost benefit analysis for regulatory change.

To be able to quantify aspects of the proposed reforms that are not easily monetised, or extrapolated to a national scale over a large number of chemicals, two approaches were used to inform the conservative estimate presented below.

The two approaches were:

·         A top down approach — this approach focused on looking at the overall size of the problem the proposal is trying to solve and then considering to what extent the Standard and associated processes will address this problem.

·         A bottom up approach — this approach focused on establishing the net benefits/costs of changes to the status quo on an individual chemical basis and extrapolating across all chemicals assessed using the Standard every year

The top down approach focused on determining the potential benefits from the National Standard including avoided contamination costs, avoided public health costs and increased national regulatory harmonisation for business. Case studies from the bottom up approach were used to inform the scaling of the top down approach by establishing the benefits and costs on an individual chemical basis. The top down approach is considered to be a conservative method of estimating the impact of the reforms and is based on the best available information for the costs of industrial chemicals on the community.

In both of these approaches, the overall result was a significant net benefit to the community. However, due to the uncertainty in being able to accurately characterise all the chemicals that will be considered under the Standard as noted previously, it is considered that the bottom up approach has significant limitations.

The following impact analysis will be presented using a combination of monetised costs, quantified but not monetised costs, and qualitative but not quantified or monetised benefits. This will enable decision makers to consider the best available information.

6.1.1      Baseline

There are thousands of chemicals in use in Australia, each used and regulated differently across the states and territories. Therefore, the baseline for the impact analysis differs depending on which industrial chemical is being considered, as well as across jurisdictions. For some chemicals there will be regulation in place in some jurisdictions but not others, and for other chemicals there is no regulation in place.

Currently, state and territory environmental risk managers regulate specific sites where chemicals are used through the environment protection provisions in legislation, rather than regulating specific chemicals for all sites that use them. There is currently no systematic process for considering environmental risk management recommendations presented by NICNAS, with environmental risk managers responding to environmental incidents as they emerge. This suggests that the following two baselines are relevant:

·         For most new chemicals, the most relevant base case is that the proposed nationally consistent framework and the associated processes under the National Standard will be an additional process that is not currently systematically undertaken – a uniformly ‘no regulation’ base case.

·         For existing chemicals that are known to be causing environmental problems, the relevant base case is ‘fragmented regulation’. That is, in the absence of a nationally consistent approach, state and territory environmental risk managers would undertake their own assessment and implement risk management actions. However, where the environmental impacts of existing chemicals are not currently known, the ‘no regulation’ base case would be relevant.

6.2      Impact on the community

There is likely to be a significant benefit to the community from implementing this reform to the environmental risk management framework, from avoided site contaminated and associated public health impacts.

The economic and social impact of environmental harm caused by certain industrial chemicals is well known and documented as described in Box 5. There are examples where the remediation costs of one site alone are estimated to be $200 million.

Box 5

Economic impact of contaminated sites in Australia[34]

The number of contaminated sites in Australia is estimated to be around 80,000.

The Cooperative Research Centre for Contamination Assessment and Remediation of the Environment (CRC CARE) has estimated that the total cost of remediating known and potential contaminated sites in Australia at $3 to 4 billion.

The clean-up cost of dioxin contaminated sediments in Sydney Harbour alone is estimated at around $200 million.

In addition there are four major contaminated sites in NSW with estimated total remediation costs of $410 million to $540 million.

The cost of site inspections alone is significant with costs ranging from $20,000 for preliminary site investigations to more than $450,000 for more detailed investigations at complex sites.  It is estimated that 1500 to 3000 detailed site assessments are required each year which could be at a cost of up to $135 million.

There are also expected to be health benefits to society from improved management of chemicals in the environment. Occupational, Health and Safety (OHS) regulations manage the risks to human health at the workplace. However, there are expected to be public health benefits from exposure outside the workplace. 

Due to a lack of a knowledge-based, preventive approach to risk management throughout a chemical’s life cycle, there are significant risks to human health and ecosystems, and associated economic costs for individuals, business and the community.

To put this in perspective, the World Health Organisation reported that globally in 2004, 4.9 million deaths (8.3% of the global total of deaths) and 86 million Disability-Adjusted Life Years (DALYs) (5.7% of the global total of DALYs) were attributable to environmental exposure and management of selected chemicals with available data.[35]

In the case of the European Union, the analysis on the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) program indicates that the net benefit of regulation of chemicals from an environmental and human health perspective is in the order of €150-500 million after 10 years of operation (Box 6).

Box 6

Findings from the European Union Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) programme[36]

REACH requires that manufacturers and importers of chemicals register their chemicals, that registrations are evaluated by authorities, that certain substances of very high concern are authorised and that restrictions are imposed in cases where risks cannot be adequately controlled by other means. REACH would replace and consolidate, into one single regulation, large parts of the chemicals legislation.

Numerous studies have been conducted by the Commission, by national authorities and various stakeholders on the possible impact of REACH. The analysis identified a number of costs that are currently incurred due to high level of chemicals in the environment including higher costs of:

·          purification of drinking water

·          disposal of dredged sediment and incineration of sewage sludge instead of disposing it on farmlands

·          sewage treatment - In some instances larger sewage treatment plants are required to obtain room for excess nitrification capacity due to toxic effects of chemicals in sewage water

The costs of measures already implemented for mitigating the impact of releases were estimated to be up to €7 billion per year in 2005 for only those cases included in the study.

The analysis presented that with the implementation of REACH there was the opportunity to avoid certain costs in the future, for example for contaminated land, water treatment and human health impacts. REACH was assumed to be able to reduce these costs by 10 per cent which resulted in estimated benefits of between €150-500 million in year 2017 (approximately A$215-A$715 million in that year assuming €1 = A$1.43 as at November 2014).

Under all options, implementation of the National Standard is likely to result in increased protection of the environment when compared to the base case. The extent to which this is achieved is dependent on the adoption of risk management decisions and the level of compliance; or in other words, on the extent to which the proposed reforms change the way chemicals are regulated. As for other types of impacts, this also depends on the baseline for each chemical.

Increased environmental protection is expected to be achieved through:

·         risk management for chemicals that would not otherwise have had them (that is, compared against the ‘no regulation’ baseline); and

·         more effective and consistent risk management undertaken (that is, compared to the ‘fragmented regulation’ baseline).

The decreased risk of environmental harm will depend on how effectively the reforms reduce the probability of environmental ‘incidents’ or sites becoming contaminated over time. The Standard is intended to result in management decisions that are tailored more accurately to the actual risk posed to the environment by a chemical. The probability of environmental incidents or sites becoming contaminated over time will differ between different types of chemicals, depending on the concern rating assumed for the chemical.

To be able to provide an estimate of the likely benefits of changes to the framework for environmental risk management, a top down approach was undertaken that includes: potential future site remediation costs avoided and potential public health benefits extrapolated from a European Union study into REACH.

Based on known examples of site contamination, it is estimated that the benefit from cost avoided from this type of environmental incident could be $92 million (net present value over ten years). In addition, the community is likely to benefit from decreased risk of environmental exposure to industrial chemicals that have the potential to significantly impact on human health, in the order of $172 million (net present value over ten years). However, for the purposes of this analysis, the conservative mid-point estimates of $69 million and $112 million have been included.

Table 62: Present value benefits of reduced remediation costs and public health exposure costs

 

Low estimate

Mid-point

High estimate

 

$ million

$ million

$ million

Present valuea

 

 

 

Reduced remediation costs

46

69

92

Public health

52

112

172

Total

98

181

264

a Estimated over a ten year period using a discount rate of 7 per cent, assuming the Standard is implemented from the third year onwards. Note: Numbers may include rounding errors.

 

Option 1 will establish a national schedule of environmental risk management actions and go some way towards protecting the environment and the Australian people by improving the efficiency of risk management actions for industrial chemicals that have the potential to cause environmental harm.  However, as national decisions are non-binding, this approach could also maintain the current inconsistency in application of risk management actions for industrial chemicals thereby counteracting any effectiveness. It has been estimated that only 60% environmental risk management recommendations will be implemented under Option 1. Therefore, the estimated benefit to the community is lower than compared to the other options. 

The benefits to the community are likely to be realised under Option 2 and 3 as the rate of adoption and implementation is expected to be higher under a legislative framework approach.

·          Unlike Option 1, in Option 2 the process for making risk management decisions will be underpinned by a statutory decision making framework and all jurisdictions will agree to incorporate decisions into their legislative framework and ensure compliance. This approach has the potential to promote a consistent application of risk management actions nationally which would provide greater transparency, predictability and certainty for the community.

·         Option 3 goes further than Option 2 in achieving not just a nationally agreed decision with a consistent environmental outcome, but also consistent nationwide implementation, including in regards to compliance and enforcement.

6.3      Impact on Industry

One of the key information gaps is quantitative data on the number of businesses that are using industrial chemicals, the types and volumes of industrial chemicals used and the existing risk management measures already in place. In the absence of this information, the following is a qualitative description of the potential impacts on business using individual examples rather than attempting to extrapolate this to the whole sector.

It is assumed that for the majority of chemicals scheduled under the Standard, businesses are likely to already be compliant as existing controls and work health and safety measures used by industry may already be sufficient to meet environmental risk management recommendations. The majority of chemicals for which industry may already be compliant include chemicals that are categorised as Low Concern and a portion of Intermediate Concern chemicals.

The introduction of the National Standard would impose a one off cost to industry in the form of staff time for businesses to educate themselves about the National Standard and the new regulatory arrangements. There would also be an expectation that for businesses that would need to meet new requirements, there would be an additional upfront training cost.

It is expected that the introduction of the Standard would increase the compliance costs for businesses operating in jurisdictions where risk management recommendations are not readily or consistently adopted by the jurisdiction in which they operate.

For existing chemicals, the costs/benefits from the proposed reforms depend on how the risk management actions imposed under the proposed reforms are different to those currently imposed by each jurisdiction. This could be either a benefit or a cost to industry. There may be some chemicals where additional compliance measures are required based on availability of new information about the potential hazards and risks to the environment.

Potential additional compliance costs may include:

·         Purchase of materials or equipment to meet environmental risk recommendations

·         Record keeping activities (staff time) to ensure documents are generated, current and stored according to legislative requirements

·         Resources required to facilitate audits and inspections according to legislative requirements.

Box 7

Illustrative example of potential risk management recommendations under the National Standard - Perchloroethylene

Under the National Standard, once a chemical is scheduled it will have associated risk management actions based on its level of concern to the environment. For example using Perchloroethylene (Perc) as an illustrative example, a chemical with a similar hazard and risk profile may be subject to the following controls:

·          DO NOT release the chemical to sewer

·          DO NOT release the chemical directly to surface waters, storm water, soil or air

·          Use chemical in a closed-loop system

The manufacture of Perc ceased in Australia in 1991 but it is still used as a cleaning solvent (as pure compound and chemical formulations), industrial solvent in product formulation, chemical reactant and analytical laboratory ingredient.

One method that business could choose to meet the illustrative requirements would be to change to an alternative chemical for dry cleaning. A study from the United States compared different technologies and provides an indication of potential associated costs. Hypothetically, it is estimated that to switch from Perc to non-chlorinated hydrocarbon cleaning would increase the cost to business by $1216 per year. This is primarily due to the increase in electricity required . This equates to a cost of $6470 in present value terms over 20 years (with a 7% discount rate). Of course, there may be other ways to meet the risk management requirements and industry is expected to choose the least costly action to meet the outcomes.

The clean-up costs associated with Perc contamination can be as high $10 million per site. As an example, it is assumed that each dry cleaning site has a probability of incurring such a clean-up cost after 20 years of 0.01. This implies the expected environmental benefit (avoided clean-up cost) of applying the Standard is around $27 600 in present value terms (using a discount rate of 7 per cent) per dry cleaner.

Therefore, on a per business basis as an illustrative example, the net benefit from the National Standard would be approximately $21,000 (net present value (NPV) over 20 years with a 7% discount rate). If this is extrapolated to 75% of the approximately 3600 dry cleaning business, the net present value of cost avoided would be approximately $57 million over the same period.

6.3.1      Advantages to industry as a result of increased national consistency

Currently, businesses may be subject to different regulatory requirements for the environmental risk management of industrial chemicals in each jurisdiction. One of the primary aims of the proposed options and the Standard is to provide greater consistency across jurisdictions so business is only required to adhere to one Standard. With better consistency, businesses operating in different jurisdictions will also benefit in terms of compliance costs and other savings such as lower administration and reporting costs.

It is expected that the Standard would be able to meet the aim of greater harmonisation that generally includes the following[37]:

·         Lower compliance cost on business — fragmented regulatory arrangements can increase complexity and can lead to duplication of effort for businesses operating across state borders.

·         Lower costs associated with administering multiple regulatory schemes — where each state and territory undertakes the same regulatory function separately, there is likely to be significant duplication of effort.

·         Market fragmentation and the failure to capture the benefits from economies of scale — different regulatory regimes can have the effect of creating smaller markets as businesses and individuals focus their operation in a single jurisdiction, rather than looking to engage in a wider market.

6.3.2      Informed decisions and outcomes based actions undertaken by business

The Standard would allow for greater transparency, predictability and certainty for businesses as the various proposed risk management actions would be publicly available and based on an existing, known Standard. Thus the industry will be able to better understand and engage with the regulatory framework at an earlier stage.

With the provision of self-assessment tools, the Standard would allow industry to make informed judgements about likely outcomes of the risk management process prior to applying for assessment under NICNAS, and may in turn also provide an incentive to seek out ‘greener’ options.

In addition, the Standard is proposed to be outcomes based which is in accordance with the principle that: ‘Regulation should have clearly identifiable outcomes and unless prescriptive requirements are unavoidable in order to ensure public safety in high-risk situations, performance-based requirements that specify outcomes rather than inputs or other prescriptive requirements should be used.’ [38]

This approach allows industry the flexibility to determine how best to meet the required environmental outcome for a particular chemical. It allows regulated entities to find the least cost solution to meeting the prescribed performance outcome and therefore also encourages innovation.

Feedback from industry to date has indicated their support for a nationally consistent approach to environmental risk management of industrial chemicals. They have also been supportive of a National Standard based on its ability to create a consistent and transparent approach to regulation for businesses.

6.3.3      Streamlined process and potential for reduced delay costs

Further benefits can flow from the development of the Standard if NICNAS considers the Standard during their chemical risk assessment process. The Standard is proposed to be used to allow NICNAS to publish a draft recommendation on which concern category the chemical should be assigned to and appropriate risk management outcomes, thereby creating efficiencies and facilitating integration between the assessment and risk management processes.

One advantage of the options is the potential benefit from reducing the delay costs that are incurred in bringing a chemical to the Australian market. In the current regulatory system, there is no national environmental risk management forum to which NICNAS can make targeted risk management recommendations. This can lead to uncertainty in assessment outcomes for both industry and NICNAS. There have been instances where NICNAS has had difficulty making appropriate environmental decisions in relation to certain chemicals where there is a level of environmental concern and the risk assessment has concluded that the long-term risk is unknown. In some circumstances, it has taken several years for these new chemical risk assessments to be completed, as additional data is collated by the chemical notifier to support the assessment. Some of these assessments have also resulted in the notifier reducing the import volume to ensure the assessment does not conclude that the chemical may pose an unreasonable risk to the environment.

This situation may be avoided with a National Standard as it should assist in providing transparency and certainty for the chemical industry. There is the potential that scheduling decisions and risk management actions could be estimated prior to the introduction of chemicals. This could allow industry to make conscious decisions about the chemicals they introduce into Australia, prepare for the potential risk management requirements, and predict the type of additional information to provide to NICNAS that may support the risk assessment. Therefore, certainty in risk assessment and risk management outcomes for environmental risks could help reduce the costs related to delays in bringing a chemical to the Australian market.

6.3.4      Summary of net impact on industry

The impact on industry as a result of the proposed options will depend on the assessed level of concern to the environment of the industrial chemicals used and whether businesses are subject to changes in requirements for risk management. It is assumed that for the majority of chemicals scheduled under the Standard, businesses are likely to already be compliant as existing controls used by industry may already be sufficient to meet environmental risk management recommendations. These considerations are set against the background of the chemicals and plastics industry which has an estimated value of $33 billion in annual turnover.

However, it is expected that the introduction of the Standard would increase the compliance costs for businesses operating in jurisdictions where risk management recommendations are not readily or consistently adopted. These costs could be in the order of $59 million and $60 million (over 10 years in present value terms) for Options 2 and 3. The cost to industry is likely to be lower for Option 1 as it is less likely that risk management decisions will be adopted and implemented. Industry will also be subject to one-off upfront costs which will involve familiarisation with the new processes and training of staff to meet potential new risk management requirements.

The Standard is proposed to be outcomes based. This approach allows industry the flexibility to determine how best to meet the required environment outcome for a particular chemical. It allows regulated entities to find the least cost solution to meeting the prescribed performance outcome and therefore encourages innovation.

Fragmented regulatory arrangements can increase complexity and can lead to duplication of effort for businesses operating across borders. It is expected that industry would benefit from the establishment of a nationally consistent approach to environmental risk management from industrial chemicals due to lower administrative and compliance costs associated with adhering to one National Standard rather than up to eight different requirements across all jurisdictions. It is estimated that this could lead to a savings in the order of $3 million for business for Option 2 . This is likely to be lower for Option 1 as a lower level of national consistency of risk is expected and businesses could still be subject to different risk management and reporting requirements. This is also likely to be lower for Option 3 due to overlap between compliance activities for chemicals at the Commonwealth and state and territory levels (See duplication discussion in Section 6.4). This would result in businesses continuing to report multiple agencies which results in less time saved reporting to governments compared to Option 2.

The level of consistency in implementation of risk management recommendations expected from each option is considered to increase from Option 1 to Option 3. As the approach in Option 1 is that of non-binding national decisions, the uptake of risk management decisions by jurisdictions cannot be determined. There is the potential that industry will continue to be burdened by inconsistent implementation of risk management outcomes between jurisdictions. Therefore, the benefit to industry from achieving national consistency for environmental risk management of industrial chemicals may not be as well recognised as under options 2 and 3. This will also decrease the ability of the Standard to provide a transparent decision making process.

 

 

 

 

Table 63: Total impact on business of proposed options (net present value over 10 years)

 

Option 1

Option 2

Option 3

 

$million

$million

$million

Impact on industry

 

 

 

Cost of understanding new framework

-4

-4

-4

Benefits of harmonisation

1.8

 3.1

2.0

Cost of risk management actions

-35

-58

-58

Total impact on business

-37

-59

-60

Note: Numbers may include rounding errors.

6.4      Impact on Government

Implementing a National Standard will impose costs on the Commonwealth and state and territory governments as outlined in Table 6‑4. These costs will include:

·         the upfront costs associated with developing the National Standard

·         the upfront costs associated with changes to the legislative and administrative arrangements necessary to implement the Standard

·         ongoing costs associated with: functions of the Working Group (Option 1) or Advisory Committee (Option 2 and 3) and the Decision Maker

·         compliance and enforcement costs.

In general, the costs associated with developing and implementing the Standard are relatively modest and are mostly incurred by the Commonwealth Government. Option 2 is the least cost option for implementation at $10 million (NPV over 10 years). Option 1 and 3 are costed at $15 million and $16 million respectively.

Although the (net) benefits from changes to the way the environmental risks associated with industrial chemicals are managed are not easily quantified, it is highly likely that they will outweigh the costs associated with developing and implementing the Standard. Indeed, the illustrative examples investigated suggest that the benefits from just a few chemicals could potentially outweigh the costs of developing the Standard on their own.

The main difference in the costs is determined by the required level of involvement of the state, territory and Commonwealth governments to implement the Standard under the three options. The increase in costs of Option 3 also reflects the potential for regulatory duplication and associated costs of establishing a new Commonwealth regulator. The assumptions that support these cost estimates are at Appendix J.

Table 64: Estimated NPV costs over 10 years of developing and administering the National Standard[39]

 

Option 1

Option 2

Option 3

 

$'000

$'000

$'000

Commonwealth Government

 

 

 

National Standard development

  613

  613

  613

Legislative and administrative changes

 1227

 1739

 6523

Ongoing National Standard processes

 2049

 2751

 4450

Total - Commonwealth Government

 3889

 5103

 11,586

State and territory governments

 

 

 

National Standard development

  203

  203

  203

Legislative and administrative changes

 1715

 1172

  703

Ongoing National Standard processes

9293

  3653

3526

Total - state and territory Governments

11,211

5029

4432

Total

15,100

10,132

 16,019

Note: Numbers may include rounding errors.

The existence of a Standard is expected to minimise the need to negotiate and prepare risk management actions for each chemical on a case-by-case basis. This would streamline the process, resulting in time savings as well as fewer resources used to make a decision, resulting in further cost savings.

For example a key ongoing cost to government under Option 1 is staff time required to facilitate the decision making process under the National Standard. This includes the time required by a Decision Maker or their delegate, operation costs for staff working on a secretariat of the National Standard, and jurisdictional resourcing of a Working Group for reviewing and commenting on risk management recommendations, as required. There would also be additional administrative costs to adopt each scheduling decision, potentially through legislation on a case by case basis.

In contrast, under Option 2 and 3, the staffing requirements for jurisdictions is less than for Option 1 as the framework would establish an Advisory Committee (as described in Appendix I) rather than a Working Group composed of state and territory officials.

The total cost to governments is higher under Option 3 due to the duplication of compliance and enforcement activities in the chemicals framework as a whole. States and territories do not currently undertake compliance activities separately for environmental risk management of industrial chemicals. Facilities are generally licensed to operate in the states and territories and this licence includes consideration of all relevant activities related to environmental compliance, not solely compliance for management of industrial chemicals. Therefore, under Option 3, should the powers in relation to environmental risk management of industrial chemicals be undertaken by the Commonwealth, the states and territories will continue to undertake the majority of their environmental compliance and enforcement activities for facilities, in addition to the new compliance and enforcement activities undertaken by the Commonwealth specifically for environmental risk management of industrial chemicals. This would result in additional overall resourcing.

Another ongoing cost may include compliance and enforcement of risk management outcomes within the jurisdictions. The impact on existing environmental risk managers in terms of increased or decreased compliance costs will depend on the extent to which the proposed options change the way that industrial chemicals are regulated.

This could vary across chemicals and the baseline is of critical importance. For example if the existing regulator would not have regulated the chemicals at all (that is, the ‘no regulation’ baseline), then all of the compliance costs are attributed to the reforms.  However, if the chemical would have been regulated in a different way, the change in cost is relevant. The cost could either increase or decrease. This increase or decrease in costs is also likely to be influenced by the current resourcing that jurisdictions have in place.

However, beyond the minimal additional resourcing outlined in Appendix J, states and territories are not expected to require significant additional resourcing as the compliance and enforcement effort under a Standard approach will be proportional and risk-based. This will better enable states and territories to focus their regulatory effort on chemicals of greatest concern to the environment.

Under Option 1, as the adoption of decisions under the Standard are non-binding, it is not known to what extent states and territories will implement environmental risk management decisions and the extent of compliance activities is therefore not known.

Under Option 2 compliance costs could remain the same, decrease or increase as a result of the National Standard. This will be dependent on how Option 2 is implemented within jurisdictions’ existing frameworks. Under Option 3 it is likely that compliance costs would increase for the Commonwealth and decrease for the states and territories but ultimately have a greater total cost to governments.

6.5      Analysis of Options

Under all options, implementation of the National Standard is likely to result in increased protection of the environment and improve national consistency when compared to the base case. The extent to which these benefits are realised is dependent on the chosen option. This is a reflection that the consistent adoption of risk management decisions, the process by which decision are made and the mechanism for compliance and enforcement varies between the options.

The analysis found that there was a significant net benefit under each of the options considered compared to the status quo. The greatest net benefit is achieved from Option 2 in the order of $112 million (over 10 years in present value terms). Options 1 and 3 had net benefits of $57 million and $105 million respectively (Table 6‑5). 

Table 65: Estimated net benefits of the reforms

 

Option 1

Option 2

Option 3

 

$million

$million

$million

Impact on the community

 

 

 

Environmental benefits

41

69

69

Public health benefits

67

112

112

Total impact on the community

109

181

 181

Impact on industry

 

 

 

Cost of understanding new framework

-4

-4

-4

Benefits of harmonisation

1.8

 3.1

2.0

Cost of risk management actions

-35

-58

-58

Total impact on business

-37

-59

-60

Impact on government

 

 

 

National Standard development

-0.8

-0.8

-0.8

Legislative and administrative changes

-3

-3

-7

Ongoing processes for the National Standard

-11

-6

-8

Total impact on government

-15

-10

-16

Total net benefit

57

112

 105

Note: Numbers may include rounding errors.

6.5.1      Summary of Option 1

Under Option 1, national environmental risk management decisions would be made in accordance with a National Standard. The National Standard would be established in a non-statutory framework and implementation of decisions by jurisdictions would be non-binding.

Due to the non-statutory nature of this option, the following conclusions about the efficacy or likelihood in achieving the stated objectives are:

·         Option 1 is not expected to meet the overarching objective of the reforms providing a nationally consistent, transparent and predictable approach for environmental risk management of industrial chemicals to industry.

·         Option 1 is only partially expected to meet the overarching objective of the reforms of achieving better protection of the environment through improved management of the environmental risks posed by industrial chemicals.

As the National Standard will continue to operate under this option, it has been determined that there will continue to be a net benefit from implementation of Option 1. However, the net benefit is not as great as Option 2 or 3 based on the non-binding nature of the option.

6.5.2      Summary of Option 2

Under Option 2, national environmental risk management decisions would be made in accordance with a National Standard. The National Standard and decision making powers would be established under Commonwealth legislation, with jurisdictional legislation for implementation and compliance.

The following conclusions about the efficacy or likelihood in achieving the stated objectives are:

·         Option 2 is expected to meet the overarching objective of the reforms providing a nationally consistent, transparent and predictable approach for environmental risk management of industrial chemicals to industry.

·         Option 2 is expected to meet the overarching objective of the reforms of achieving better protection of the environment through improved management of the environmental risks posed by industrial chemicals.

As consistency across jurisdictions is anticipated to be achieved and the environmental benefits of the reforms realised, the net benefit for Option 2 is greater than Option 1. The likely benefits are also expected to be greater than Option 3, mainly due to efficiencies of Options 2 compared to Option 3 as regulatory efforts between the Commonwealth and states and territories are not expected to be duplicated for Option 2.

Option 2 is determined to be the least cost implementation of the National Standard in order to achieve the described benefits. Therefore, Option 2 is considered to be the preferred option.

6.5.3      Summary of Option 3

Under Option 3, national environmental risk management decisions would be made in accordance with a National Standard. The National Standard and associated compliance measures would be established under a Commonwealth legislative framework.

The following conclusions about the efficacy or likelihood in achieving the stated objectives are:

·         Option 3 is expected to meet the overarching objective of the reforms providing a nationally consistent, transparent and predictable approach for environmental risk management of industrial chemicals to industry.

·         Option 3 is expected to meet the overarching objective of the reforms of achieving better protection of the environment through improved management of the environmental risks posed by industrial chemicals.

As consistency across jurisdictions is anticipated to be achieved and the environmental benefits of the reforms realised, the likely benefits associated with Option 3 is greater than Option 1. However, the likely benefits for Option 3 would be less than Option 2, mainly due to duplication in regulatory effort between the Commonwealth and states and territories for Option 3 and the costs associated with establishing a new Commonwealth regulator.

 


7      Consultation

 

The purpose of consultation is to elicit stakeholder feedback on proposed regulatory action by government. The focus groups were designed to provide stakeholders with an opportunity to explore the Consultation RIS and, if required, to seek clarification about the identified problems, the three options under consideration, and the results of the impact analysis.

 As the COAG Best Practice Regulation Guidelines note, such feedback can ‘improve the quality of the solution adopted’ by:

·         ensuring that both those affected by regulation, and the actioning agencies, have a good understanding of what the problem is

·         providing perspectives and suggestions, on alternative options to address the problem, from those parties that will be affected by the government action

·         helping regulators assess competing interests

·         ‘providing a check on the regulator’s assessment of costs (including compliance costs) and benefits and whether/how the proposed option will work in practice, thus

·         reducing the risk of unintended consequences if a particular option is adopted

·         identifying interactions between different types of regulations

·          possibly enhancing voluntary compliance through greater understanding and acceptance of a proposal, thereby reducing reliance on enforcement and sanctions.

7.1      Consultation Regulation Impact Statement

The Consultation RIS was released for public comment for a period of 11 weeks (from 11 April 2013 to 28 June 2013). Stakeholders were invited:

·         to attend a series of public forums that were held in Sydney, Brisbane, Melbourne, Adelaide and Perth to provide stakeholders with an opportunity to ask questions or provide feedback on the Consultation RIS.

·         to request one-on-one meetings in case stakeholders wanted the opportunity to ask questions or provide feedback in a confidential setting.

·         to lodge a written submission on the Consultation RIS.

The consultation process and public forums were published on the SCEW website. Targeted stakeholders from over 180 organisations and individuals identified by the National Chemicals Environmental Management Working Group (NChEM) were contacted by email inviting them to register their interest in attending the focus groups.

Stakeholders were also asked to forward the invitation to other interested people within their organisation, to members of their organisations, and any other parties that would be interested in attending. Written submissions were also invited to the Consultation RIS.

In all, 63 stakeholders registered their interest in attending the focus groups and 51 stakeholders actually attended the focus groups representing 34 different interested parties. No stakeholder requested a one-on-one meeting with PwC and government representatives. Eleven written submissions were received (See Figure 7‑1 and Figure 7‑2 for distribution of responses).

Table K‑1 in Appendix K outlines the stakeholders who provided written submissions or attended focus groups.

Figure 71: Distribution of attendance at focus groups (34)

Pie chart graph depicting the distribution of attendance at focus groups.
State Government the most with 32% and NGO & Commonwealth Government the lowest with 3%

Figure 72: Distribution of submission of written responses (11)

Pei chart graph depicting the distribution of attendance at focus groups.
NGO the most with 27% and Company & State Government the lowest with 9%


 

7.1.1      Outcomes from consultation

From the focus groups and written submissions, no view was expressed that there was not the need for the proposed reforms. Stakeholders agreed that there is benefit in government reform to protect the environment and improve the effectiveness and efficiency of risk management actions for industrial chemicals that have the potential to cause environmental harm.

Feedback received favoured an approach that harmonises implementation of national decisions, is economical and integrated with the proposed changes arising from the review of NICNAS as well as existing risk management frameworks implemented by states and territories.

For example, stakeholders expressed that the options should be designed to limit increases in regulatory timeframes, duplication of effort and additional costs being added to the assessment of chemicals. It was considered that the consideration of environmental risk management should be integrated with the existing NICNAS processes and align with any changes as a result of the NICNAS review. 

A majority of stakeholders did not state a preferred option for implementation of the proposed reforms. In some cases this was stated to be because further detail was required in order to visualise how environmental standards-setting would work in practice. This included on detailed implemented questions such as: which pieces of legislation would change under the options and the potential mechanism for funding the options.

 However there was no contention on the nature of the problem presented. Broadly, the following observations were made on the options:

·         Option 1 was not viewed favourably, primarily due to the voluntary and informal nature. The reliance on existing regulatory frameworks was seen as unlikely to be able to meet the stated objectives of the proposed reforms and would likely be a continuation of the status quo. It was considered that Option 1 would have limited transparency, efficiency and accountability

·         Option 2 was viewed ‘the most feasible and effective option’ due to its streamlined and balanced nature and that it is similar to the existing working model for Poisons Scheduling. It was considered to be superior to Option 1 in consistent application of environmental risk management measures. However, it was considered by some that there is still the potential of lack of harmonisation if implementation is not consistent across all jurisdictions. It was viewed as a least costly alternative to compared to Option 3. 

·         Option 3 was viewed as the option that was most likely to achieve national consistency through the establishment of national and uniform regulatory system. However, concerns were raised about the duplication of legislation, cost of establishing a new regulatory body and time for industry to familiarise themselves with the framework and the ongoing timeframes and cost to support the new framework.

There were also a number of issues raised with reference to the impact analysis including:

·         a limited focus on the public health benefits of the options (from both a qualitative and quantitative perspective)

·         feedback from industry that a focus on existing chemical examples is likely to lead to an overstatement of the compliance costs to be incurred by government and industry as the costs of controls on new chemicals is likely to be less than on existing chemicals 

·         the relatively small size of the net benefits for the options

·         the relatively high cost of the options on a per unit chemical basis.

7.2      Refinements to policy options

In response to stakeholder feedback a number of refinements to the options in the Consultation RIS have been developed for the Decision RIS in consultation with all jurisdictions. The refinement of the options has been guided by the overarching objective – to achieve better protection of the environment through improved management of the environmental risks posed by industrial chemicals – and the following principles:

·          Administration and compliance costs, both for government and industry, are kept as low as possible, and are appropriate for the scope of the regulation.

·         The standard setting process should integrate smoothly with the NICNAS risk assessment process and relate appropriately to the other related risk-management frameworks (e.g. poisons scheduling, workplace health and safety, and dangerous goods transport).

·          Implementation of the standards within jurisdictions should readily integrate with other existing jurisdictional processes, such as environmental licensing or hazardous waste regulation.

·         The process and its outcomes should be as transparent and predictable as possible for industry.

·         The reform should generate positive outcomes for business by providing greater consistency across jurisdictions.

These refinements and principles were agreed to by all jurisdictions and have been used as the base for stakeholder consultation on the Decision RIS. The principal area of refinement responds to stakeholder preference for a regulatory regime that is simple, transparent and is as cost-effective as possible.

Each option in the Consultation RIS proposes that the standard setting body will translate high level environmental risk management recommendations from NICNAS into practical risk management actions by making individual decisions on each chemical assessed, with the differences between each option relating primarily to how the decision would be implemented.

The proposed alternative to making individual decisions on each chemical assessed is the development of a national Standard for the environmental management of industrial chemicals as outlined in Section 5.1. The national standard is designed to be able to be easily understood by industry as this is what is in place for other sectors, such as the Poisons Standard. A standard would reduce the need to negotiate and draft individual decisions for each chemical on a case-by-case basis, thereby streamlining the process and reducing the time and resources required to make a decision.

In response to feedback, the Standard has been designed to ensure smooth integration with the NICNAS risk assessment process. There is also potential for NICNAS to consider the national standard during the chemical risk assessment process. NICNAS would recommend which risk category the chemical should be assigned to, thereby creating efficiencies and facilitating integration between the assessment and risk management processes. A streamlined and efficient process will be necessary to ensure timely decisions on appropriate risk management actions can be made.

This approach would also provide greater transparency, predictability and certainty for industry as risk management actions would be based on an existing, known, Standard. The criteria for each category or class of chemicals would be publicly available, as would the standardised controls that are likely to apply to chemicals in each of those categories or classes. This information will enable industry to better understand and engage with the regulatory framework.

For jurisdictions, implementation costs under a Standards approach should be kept as low as possible because the greater burden of responsibility for environmental risk management would shift from government agencies to chemical users. It is intended that the majority of risk management actions set out in the Standard will be practical and capable of being implemented by chemical users without further definition or explanation by jurisdictions. This responds to stakeholder feedback regarding the capacity of governments to implement reforms in a tight fiscal environment.

7.3      Decision Regulation Impact Statement

Following the refinements to the options as described above, targeted stakeholder consultation with key partners and stakeholder groups has been undertaken during the development of the Decision RIS.

These consultations have been focussed on the design of the National Standard and the associated scheduling process of industrial chemicals for environmental risk and the updated impact analysis which was completed by the Centre for International Economics.

Consultation on the broader policy considerations was conducted between March 2014 and January 2015. Consultation on the updated impact analysis was undertaken between July 2014 and January 2015.

These reforms have been developed in consultation with the ongoing process under the NICNAS review.

 


8      Implementation and Review

8.1<