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Hazardous Waste (Regulation of Exports and Imports) Amendment Bill 2016 [and] Hazardous Waste (Regulation of Exports and Imports) Levy Bill 2016



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BILLS DIGEST NO. 57, 2016-17 3 FEBRUARY 2017

Hazardous Waste (Regulation of Exports and Imports) Amendment Bill 2016 [and] Hazardous Waste (Regulation of Exports and Imports) Levy Bill 2016 Paul Davidson Economics Section

Contents Purpose of the Bills .............................................................. 2

Structure of the Bills ............................................................ 2

Background ......................................................................... 2

Committee consideration .................................................... 3

Selection of Bills Committee.................................................... 3

Senate Standing Committee for the Scrutiny of Bills .............. 3

Policy position of non-government parties/independents ..... 4

Financial implications .......................................................... 4

Statement of Compatibility with Human Rights .................... 5

Parliamentary Joint Committee on Human Rights .................. 5

Key issues and provisions of the Amendment Bill ................. 5

Schedule 1—Amendments ...................................................... 5

Part 1—Main amendments ................................................... 5

Amendments relating to the Basel Convention .................. 5

Amendments relating to Basel export permits ................... 5

Amendments relating to the transit of hazardous waste from one OECD country to another OECD country ................................................................................ 6

Amendments relating to the setting of fees ....................... 6

Other amendments ............................................................. 7

Part 2—Levy amendments .................................................... 8

Key issues and provisions of the Levy Bill ............................. 8

Part 1—Preliminary ................................................................. 8

Part 2—Levy on hazardous waste permit applications ........... 8

Amount of levy ...................................................................... 8

Date introduced: 24 November 2016

House: House of Representatives

Portfolio: Environment and Energy

Commencement: Part 1 of Schedule 1 to the Amendment Bill will commence the day after the Act receives Royal Assent. Part 2 of Schedule 1 will commence on the later of 1 July 2017 and the day after the Act receives Royal Assent.

The operative provisions of the Levy Bill are scheduled to commence on the later of 1 July 2017 and the day after the Act receives Royal Assent.

Links: The links to the Bills, their Explanatory Memoranda and second reading speeches can be found on the homepages for the Hazardous Waste (Regulation of Exports and Imports) Amendment Bill 2016 and the Hazardous Waste (Regulation of Exports and Imports) Levy Bill 2016, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at

February 2017.

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Purpose of the Bills The purpose of the Hazardous Waste (Regulation of Exports and Imports) Amendment Bill 2016 (Cth)1 (the Amendment Bill) is to amend the Hazardous Waste (Regulation of Exports and Imports) Act 1989 (Cth) (the Act) to:

• move to full cost recovery under the hazardous waste permit scheme by removing the $8,000 cap on fees for permit applications, enabling the indexation of fees and allowing for an application levy and

• make changes aimed at improving the efficiency of the hazardous waste permit processes, for example, by removing the requirement to specify a place of export in Basel export permits and simplifying arrangements relating to the transit of hazardous waste from one Organisation for Economic Co-operation and Development (OECD) country to another OECD country.

The purpose of the Hazardous Waste (Regulation of Exports and Imports) Levy Bill 2016 (Cth)2 (the Levy Bill) is to set and index a levy for certain hazardous waste permit applications.

Structure of the Bills The Amendment Bill comprises one Schedule with two Parts:

• Part 1 contains the main amendments to the Act:

- items 1-2 and 15-17 remove the text of the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal - items 4 and 5 amend requirements relating to Basel export permits - items 3 and 10-12 provide amendments relating to the transit of hazardous waste from one OECD

country to another OECD country - items 6 and 7 provide amendments relating to the setting and indexation of fees - items 8-9, and 13-14 and 18 relate to publication requirements, delegations and the application of the

amendments • Part 2 (items 19 and 20) provides the amendments necessary for the Levy Bill to have effect.

The Levy Bill contains two Parts:

• Part 1 (clauses 1-6) provides preliminary information to the proposed Act and

• Part 2 (clauses 7-10) imposes a levy on hazardous waste permit applications and specifies a levy amount and a process of indexation that will apply annually to the amount of the levy.

Background The Act regulates the transboundary movement of hazardous waste, that is, the import, export and transit of hazardous waste between countries. The purpose of regulating the movement of hazardous waste is to ensure that exported, imported or transited hazardous waste is managed in an environmentally sound manner so that human beings and the environment are protected from the harmful effects of such waste.3 The Act implements Australia’s obligations under the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal (the Basel Convention).4

A number of amendments proposed in the Amendment Bill and the Levy Bill aim to provide for full cost recovery for the administration of the scheme regulating transboundary movement of hazardous waste. Cost recovery is a regulatory system whereby the industry that benefits from regulation is required to pay for parts of the regulatory system’s upkeep. The Australian Government has produced a Charging Framework which outlines the principles of cost recovery and its potential application to certain regulatory activities.5

1. Parliament of Australia, ‘Hazardous Waste (Regulation of Exports and Imports) Amendment Bill 2016 homepage’, Australian Parliament website. 2. Parliament of Australia, ‘Hazardous Waste (Regulation of Exports and Imports) Levy Bill 2016 homepage’, Australian Parliament website. 3. Hazardous Waste (Regulation of Exports and Imports) Act 1989 (Cth), subsection 3(1). 4. Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, done in Basel, 22 March 1989,

[1992] ATS 7 (entry into force generally and for Australia 5 May 1992). 5. Department of Finance, Australian Government Charging Framework, Department of Finance website, last updated 7 January 2016.

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Many of the provisions in the Amendment Bill are similar to provisions in the Omnibus Repeal Day (Spring 2014) Bill 20146 (Omnibus Bill), which was introduced in the 44th Parliament, but lapsed with prorogation of Parliament on 15 April 2016. In particular, Part 4 of Schedule 3 of the Omnibus Bill proposed to:

• remove the text of the Basel Convention from the Act7

• remove the requirement for a transit permit in certain circumstances where hazardous waste transits through Australia from one OECD country to another OECD country8

• amend the requirements for Basel export permits for final disposal9

• permit the Minister to delegate their functions and powers to Executive Level 2 officers in the Department of Environment and Energy10 and

• remove the requirement to publish certain information in the Gazette, and instead allow that information to be published on the Department of the Environment and Energy website.11

The Omnibus Bill also proposed changes to the matters that must be specified in Basel permits.12 However, the Amendment Bill contains slightly different changes compared to the Omnibus Bill. This is discussed further in the ‘key issues and provisions’ section later in this Digest. The Omnibus Bill also proposed to introduce a three year time limit on each term of appointment of members of the Hazardous Waste Technical Group.13 This proposal has not been replicated in this Amendment Bill.

Committee consideration Selection of Bills Committee The Selection of Bills Committee recommended that both the Amendment Bill and the Levy Bill not be referred to committees.14

Senate Standing Committee for the Scrutiny of Bills The Senate Standing Committee for the Scrutiny of Bills made a number of comments on the Amendment Bill.15 The Committee raised an issue regarding item 4 of the Amendment Bill which proposes to remove a specific requirement to include particulars in relation to the granting of a Basel export permit in the regulations, potentially reducing parliamentary scrutiny (see discussion in ‘key issues and provisions’ below).16

The Committee noted that item 6 of the Amendment Bill proposes to remove the statutory cap on fees of $8,000, but that it would not be replaced with another (higher) cap. The Committee further noted that the levy proposed by the Levy Bill would be subject to a cap and sought Ministerial advice as to whether a similar approach could be adopted with regards to the setting of fees.17 A similar issue was raised by the Committee in relation to the indexation of fees where item 7 does not prescribe a method of calculation for the indexation; however a method will apply to the proposed indexation of the levy under the Levy Bill.18

Item 14 proposes to permit the Minister to delegate their functions and powers to Executive Level 2 officers. The Committee noted that the delegation power (and thus the scope of functions and powers that could be carried out by Executive Level 2 officers) extended to all functions and powers under the Act. The Committee

6. Parliament of Australia, ‘Omnibus Repeal Day (Spring 2014) Bill 2014 homepage’, Australian Parliament website. 7. Omnibus Bill, Schedule 3, items 26, 27 and 38-40. 8. Ibid., items 28, 34 and 35. 9. Ibid., item 29. 10. Ibid., item 37. 11. Ibid., items 32 and 33. 12. Ibid., items 30 and 31. 13. Ibid., item 36. 14. Senate Standing Committee for Selection of Bills, Report, 9, 2016, The Senate, 24 November 2016, p. 3. 15. Senate Standing Committee for the Scrutiny of Bills, Alert digest, 10, 2016, The Senate, 30 November 2016, pp. 18-23. 16. Ibid., pp. 18-19. 17. Ibid., pp. 19-20. 18. Ibid., p. 20.

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sought Ministerial advice as to whether a limitation could be placed on the categories of powers and functions that may be exercised by Executive Level 2 officers.19

Item 17 proposes to remove the text of the Basel Convention from the Act and item 2 will instead direct readers to the Australian Treaty Series on the Australasian Legal Information Institute (AustLII) website. The Committee noted the change and referred to previous correspondence received as part of the Committee’s scrutiny of the Omnibus Bill. The Committee left the question of the appropriateness of removing the text of the Basel Convention from the Act to the Senate as a whole.20

The Senate Standing Committee for the Scrutiny of Bills made no comment in relation to the Levy Bill.21

Policy position of non-government parties/independents At the time of writing, non-government parties do not appear to have commented on the Amendment Bill or the Levy Bill.

However, many of the provisions in the Amendment Bill are similar to those that were contained in the Omnibus Bill. During the debate in relation to the Omnibus Bill in 2014, the Australian Greens successfully moved amendments in the Senate to remove the provisions of the Bill amending the hazardous waste scheme, except amendments to remove the text of the Basel Convention from the Act.22 In moving those amendments, Greens Senator Waters expressed concern that the government was ‘gutting the hazardous waste regulation regime’:

They, of course, describe it as streamlining and simplifying. In fact, it is reducing the ability of local communities to keep track of what is going on and to be able to protect their health and their local environment. In particular, the government are seeking to remove the requirement for the particulars of an export application to be specified in regs [sic] before a decision is made to grant an export permit. They are also seeking to reduce the matters that must be included in import and export permits. They are removing the publication requirements of our permits from the Gazette and they are removing the requirement for a transit permit...We are opposing the repeal of these hazardous waste provisions because this government seems intent on reducing environmental protection ...

23

Similarly, during debate on the Omnibus Bill in the House of Representatives, ALP member, Mr Giles said that the proposed changes to hazardous waste:

… only saves $130,000. In this context I definitely think this is something which deserves much greater scrutiny before we potentially subject our environment to what could be devastating damage. 24

The House of Representatives did not accept the amendments made by the Senate, including those relating to the hazardous waste provisions.25 The Senate insisted on most of its amendments, including those related to the hazardous waste provisions.26 Due to the impasse, the Omnibus Bill was not further progressed and lapsed on prorogation of Parliament.27

Financial implications The Explanatory Memorandum to the Bills notes that for the 2015-16 financial year, the total costs incurred by the Department of the Environment and Energy (the Department) were estimated to be $1.13 million, including both direct and indirect costs. Of those costs, around $1.03 million were considered recoverable.28 Most of the financial costs of the scheme are currently borne by the Department (and by extension, Australian taxpayers), and one of the purposes of the Amendment Bill is to move to full cost recovery of the scheme through increased fees. The Levy Bill proposes to impose a levy on permit applications which will also generate revenues for the

19. Ibid., pp. 20-22. 20. Ibid., pp. 22-23. 21. Ibid., p. 24. 22. Australia, Senate, Journals, 72, 2013-14, 2 December 2014, p. 1935. 23. L Waters, ‘In Committee: Omnibus Repeal Day (Spring 2014) Bill 2014’, Senate, Debates, 2 December 2014, p. 9827. 24. A Giles, ‘Second reading speech: Omnibus Repeal Day (Spring 2014) Bill 2014’, House of Representatives, Debates, 29 October 2014, p. 12395. 25. Australia, House of Representatives, ‘Omnibus Repeal Day (Spring 2014) Bill 2014’, Votes and proceedings, HVP, 110, 25 March 2015. 26. Australia, Senate, Journals, 109, 19 August 2015. 27. Parliament of Australia, ‘Omnibus Repeal Day (Spring 2014) Bill 2014 homepage’, op. cit. 28. Explanatory Memorandum, Hazardous Waste (Regulation of Exports and Imports) Amendment Bill 2016 (Cth) [and] Hazardous Waste

(Regulation of Exports and Imports) Levy Bill, p. 2.

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government. Therefore if cost recovery can be achieved from industry there are no financial implications for the government (as the revenue is provided by industry rather than taxpayers), although there are anticipated economic consequences (see below).

Statement of Compatibility with Human Rights As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bills’ compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bills are compatible.29

Parliamentary Joint Committee on Human Rights The Parliamentary Joint Committee on Human Rights considered that the Amendment Bill and the Levy Bill do not raise human rights concerns.30

Key issues and provisions of the Amendment Bill Schedule 1—Amendments

Part 1—Main amendments

Amendments relating to the Basel Convention The Amendment Bill proposes to remove the text of the Basel Convention31 so as to simplify the Act. Item 17 repeals the Schedule to the Act which contains the Basel Convention. Item 1 proposes to amend the definition of Basel Convention in section 4 of the Act as a result of item 17. Item 2 adds a note to the definition of Basel Convention to refer readers to the Australian Treaties Library on the AustLII website, consistent with current legislative drafting practices where legislation involves international conventions. Item 16 proposes to repeal subsection 62(2) which is consequential to removing the text of the Basel Convention from the Act. Item 15 renumbers current subsection 62(1) as a result of item 16.

Amendments relating to Basel export permits Currently the Minister must not grant a Basel export permit authorising the export of hazardous waste if the applicant for the permit proposes to dispose of the waste by a method which does not lead to the possibility of re-use, recycling or recovery of resources (including methods where waste is disposed of by depositing it into landfill or water, or by incineration)32 unless two requirements are met. Firstly, at the time the Minister decides to grant the export permit, the details of the export are specified in the regulations (paragraph 18A(2)(a) of the Act). Secondly, the Minister must be satisfied that exceptional circumstances exist.33 Item 4 proposes to change the process under which a Basel export permit may be granted where the waste is intended to be disposed of in a manner that does not encompass reuse or recovery of materials. Item 4 has the effect of removing paragraph 18A(2)(a) so that a permit will still only be issued in exceptional circumstances, but there will be no requirement for details of the proposed export to be specified in the regulations before the Minister’s decision. As noted in the Explanatory Memorandum to the Amendment Bill, the Minister is currently under an obligation to publish certain information relating to permits under section 33 of the Act, and the scope of the obligation would extend to providing particulars about a Basel export permit.34 In other words, information about Basel export permits for final disposal of waste would still be made publicly available. However, as noted by the Scrutiny of Bills Committee (see earlier discussion), that information would no longer need to be specified in regulations, potentially reducing parliamentary scrutiny in relation to those permits.

Section 21 of the Act sets out the matters that must be included in a Basel export permit. Item 5 proposes to repeal paragraph 21(1)(e), which requires each Basel export permit to specify the place from which the hazardous waste is to be exported. The Explanatory Memorandum to the Amendment Bill provides that there

29. The Statement of Compatibility with Human Rights can be found at page 4 of the Explanatory Memorandum to the Amendment Bill. 30. Parliamentary Joint Committee on Human Rights, Report 10 of 2016, 30 November 2016, p. 8. 31. Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, op. cit. 32. Hazardous Waste (Regulation of Exports and Imports) Act 1989 (Cth), subsection 18A(1). See also Section A of Annex IV to the Basel

Convention. 33. Ibid., paragraph 18A(2)(b). 34. See the definition of Basel permit in section 4 of the Act.

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have been circumstances where permit holders have had to apply for a variation due to changes in circumstances such as a change in the port from which the hazardous waste is to be exported, due to changes to shipping routes. As noted further in the Explanatory Memorandum, item 5 will reduce the administrative burden on businesses seeking a Basel export permit.35 By reducing the administrative burden on businesses, it would be expected that the number of permit variation applications would reduce, allowing the Department to deploy its resources elsewhere. However at the same time, the expected revenue raised from application fees would fall, which for the variation of export permits are currently set at either $2,980 or $8,000 (although they are subject to amendment — see below), depending on the nature of the export permit.36

Item 5 as proposed is different to item 31 in the Omnibus Bill which proposed more substantive changes to subsection 21(1). The proposed changes under the Omnibus Bill would have provided less information about a Basel export permit than the information requirements as amended by item 5.

Unlike item 30 of the Omnibus Bill, no analogous provision is proposed removing the requirements for Basel import permits to specify the place to which the hazardous waste is to be imported.37 As such, it appears somewhat odd that the regulatory burdens will differ between Basel export permits and Basel import permits.

Amendments relating to the transit of hazardous waste from one OECD country to another OECD country The Amendment Bill proposes to reduce the regulatory burden placed on businesses involved in the transit (through Australia) of certain hazardous waste from one OECD country to another OECD country. An OECD decision38 currently provides for the control of certain hazardous waste as part of the Amber Control Procedure.39 That procedure relates to the transboundary movement of waste to recovery facilities within the OECD area. The procedure covers hazardous waste in transit, as well as hazardous waste that is imported or exported from OECD member countries. The Amendment Bill however only relates to the transit of hazardous waste, so it is questionable as to how much regulatory burden reduction the amendments provide.

Subsection 40A(1) of the Act currently prohibits the transit of hazardous waste through Australia without a hazardous waste transit permit. Item 10 proposes to repeal and substitute existing subsection 40A(1) (excluding the note) so as to provide an additional exception to the prohibition of bringing waste into Australia. The exception relates to the transit of hazardous waste from one OECD country to another OECD country, where the Minister has provided written notification to the person with the hazardous waste that that person does not require a transit permit (see proposed paragraph 40A(1)(b)).

Item 11 proposes to insert a new subsection 40A(1A) which relates to the written notification required in new paragraph 40A(1)(b). The new subsection 40A(1A) proposes to provide that before notifying the person, the Minister must be satisfied that carrying out the transit proposal will not pose a significant risk of injury or damage to human beings or the environment. New paragraph 40A(1A)(b) provides a regulation making power that can prescribe additional matters that the Minister must be satisfied of prior to providing the notification. The Minister must publish particulars of the notification on the Department website as soon as practicable after giving a notification (see new subsection 40A(1C)).

Item 12 proposes to insert new subsection 40A(6) to provide a definition of OECD country and item 3 provides a note to subsection 13A(1) which explains that a transit permit may not be required where the transit proposal relates to hazardous waste that is being moved from one OECD country to another OECD country.

Amendments relating to the setting of fees Subsection 32(1) of the Act sets a legislative cap on fees for applications and notices in relation to the transboundary movement of hazardous waste, currently of $8,000. Item 6 proposes to amend subsection 32(1) to remove the current cap on fees of $8,000. Item 7 proposes to add a new subsection 32(7) to allow the regulations to provide for the indexation of prescribed fees. The Explanatory Memorandum to the Amendment Bill states that the fee cap has been in place since 1991 and ‘does not reflect the current costs of administering

35. Explanatory Memorandum, Hazardous Waste (Regulation of Exports and Imports) Amendment Bill 2016 (Cth) [and] Hazardous Waste (Regulation of Exports and Imports) Levy Bill, op. cit., p. 6. 36. Hazardous Waste (Regulation of Exports and Imports) (Fees) Regulations 1990 (Cth), Schedule 1, items 7-8. 37. As required by paragraph 20(1)(e) of the Act. 38. Organisation for Economic Co-operation and Development (OECD), Decision of the Council concerning the Control of Transboundary

Movements of Wastes Destined for Recovery Operations, C(2001)107, 14 June 2001 as amended. 39. Ibid., para 2.b) and Section D. Wastes subject to the Amber Control Procedure are listed in Appendix 4.

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the permitting scheme’.40 Nevertheless, the schedule of application fees was increased in 2016 and only specific types of export permit grant and export permit variation applications have fees set at the cap.41 The remaining application fees are currently below the cap and some fees are substantially lower than the cap. As noted by the Senate Standing Committee for the Scrutiny of Bills (see above), it is unclear why the cap needs to be removed rather than amended. This is especially the case since the Levy Bill will impose a statutory cap on the levy for hazardous waste permit applications (see below). Since the fee will be uncapped and the levy will be capped, there is the potential to classify more of the Department’s costs in administering the scheme under the uncapped fee, rather than under the levy where it may be more appropriately classified. In turn such an outcome may not amount to appropriate cost recovery.

The Department’s Cost Recovery Implementation Statement (CRIS) outlines the costs associated with the administration of managing hazardous waste movement in Australia.42 The CRIS distinguished between direct and indirect costs. The direct costs related to the application assessment and associated administrative matters and were to be recovered via the proposed fees. The indirect costs were handling enquiries, compliance and enforcement, and developing standard operating procedures and advisory material related to the administration of the Act. It is anticipated that these indirect costs will be recovered by the imposition of the levy under the Levy Bill (see below). The first stage toward full cost recovery was undertaken in 2016 with new application fees applying to applications on or after 1 July 2016.43 The CRIS anticipates a significant increase in fees to apply from 1 July 2017, before resorting to a Consumer Price Index (CPI) indexation factor that is proposed to apply from 1 July 2018 and 1 July 2019 respectively. The Department estimated44 that, prior to the 2016 changes, it was recovering around five per cent of its costs and is moving to a full cost recovery model,45 so it is anticipated that the fees will increase substantially from those that applied prior to the 1 July 2016 changes—from between eight times the earlier rate up to fifty times that rate, depending on the type of application being made.

Other amendments Section 33 of the Act sets out a requirement for the Minister to publish certain information, for example in relation to applications and permits under the Act. Currently this information is published in the Commonwealth Gazette. Item 8 proposes that the required information be published on the Department’s website rather than in the Gazette. To achieve this, item 9 proposes to amend subsection 33(1) to substitute a reference to the Gazette to the Department’s website.46

Item 14 proposes to permit the Minister to delegate any or all of the Minister’s functions and powers under the Act to an Executive Level 2 officer (including a person acting at that level).47 Proposed subsection 60(2) ensures that an officer performing functions or exercising powers under a delegation must comply with any directions provided by the Minister. The requirement to comply with Ministerial directions under proposed subsection 60(2) would also apply to the Secretary of the Department as well as SES employees and acting SES employees of the Department, whereas currently that is not explicitly provided in the legislation. Item 13 makes a consequential numbering amendment to section 60 as a result of item 14.

Item 18 is an application provision and subitems 18(1) and (2) provide that the changes made by items 4 and 5 in relation to Basel export permits apply to permits granted on or after the commencement of item 18 (which will be the day after the Amendment Bill receives Royal Assent). Subitem 18(3) provides that the requirement to publish information on the Department’s website, rather than in the Gazette, applies in relation to information published on or after the commencement of item 18. Subitem 18(4) provides that the amendments relating to transit permits made by item 11 apply to hazardous waste brought into Australia on or after commencement. Subitem 18(5) ensures that regulations made under subsection 62(1) and in force immediately before

40. Explanatory Memorandum, Hazardous Waste (Regulation of Exports and Imports) Amendment Bill 2016 (Cth) [and] Hazardous Waste (Regulation of Exports and Imports) Levy Bill, op. cit., p. 6. 41. Hazardous Waste (Regulation of Exports and Imports) (Fees) Regulations 1990 (Cth), Schedule 1, items 4 and 8. 42. Department of the Environment, Cost recovery implementation statement: hazardous waste permits 2016-17, Department of the

Environment, Canberra, 2016, p. 4. 43. Department of the Environment and Energy (DEE), ‘Hazardous waste permits: permit application fees, DEE website. 44. Department of the Environment, Cost recovery implementation statement: hazardous waste permits 2016-17, op. cit., pp. 12, 33. 45. Ibid.

46. Item 8 consequentially amends the heading to section 33. 47. See also Scrutiny of Bills Committee discussion above.

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commencement continue in force after that time as if they had been made under section 62 of the Act (section 62 will not contain subsections after the renumbering by item 15).

Part 2—Levy amendments Item 19 proposes to insert new section 32A into the Act, to require permit applications to be accompanied by a levy. Specifically, applications under sections 12, 13 or 13A (that is applications for import permits, export permits or transit permits) must be accompanied by the associated levy. (The calculation and indexation of the levy is imposed by the Levy Bill, see below.) Under proposed subsection 32A(2), if the application is not accompanied by the levy, then the application is taken to have not been received by the Minister.

Item 20 is an application provision and provides that the amendments made by item 19 apply to applications made on or after the commencement of Part 2. (That is, the levy will be required to be paid for applications made from the commencement of Part 2 of Schedule 1, which will be the later of 1 July 2017 and the day after the Amendment Bill receives Royal Assent.)

Key issues and provisions of the Levy Bill Part 1—Preliminary Clause 3 provides that the proposed Act will bind the Crown in respect of the states and the Australian Capital Territory and the Northern Territory, but not in respect of the Commonwealth. Clause 4 provides that the proposed Act will extend to every external territory. Clause 5 provides a list of definitions for the proposed Act. Clause 6 clarifies that the proposed Act does not impose a tax on property of any kind belonging to a state.

Part 2—Levy on hazardous waste permit applications Clause 7 proposes to impose a levy on each hazardous waste permit application. Clause 8 proposes to provide that the levy is payable by the applicant for a hazardous waste permit.

Amount of levy The amount of the levy is proposed in clause 9. The amount of the levy is proposed to be set at $4,616 per hazardous waste permit application, with the ability for another amount not exceeding $6,000, to be prescribed in the regulations. Clause 10 authorises such regulations to be made. The levy is proposed to be subject to annual indexation from 1 July 2018, equivalent to the Consumer Price Index (providing that the CPI figure is greater than one) as a result of the operation of clauses 5 and 9.

The CRIS provided that, as alternatives to imposing a levy to recover the indirect costs of administering the hazardous waste permit system, consideration was given to either imposing higher permit application fees or to not imposing cost recovery.48 As noted in the CRIS, imposing increased permit application fees beyond the level needed for recovery of costs that are directly linked to an individual or organisation would be inconsistent with the principles of cost recovery.49 In relation to the second alternative, not having cost recovery would mean in effect that the indirect administration costs would be borne by the taxpayer, who may receive little to no direct benefit from the management of hazardous waste.

The CRIS noted that businesses involved in the transboundary movement of hazardous waste cannot be readily classified into an industry or groups of industries.50 The CRIS considered the imposition of a levy via three means: a mass/volume based charge; a flat rate charge; and a charge proportionate to the cost recovery permit fee arrangements.51 The CRIS preferred recovery mechanism was via a flat rate charge, which is reflected in clause 9 to the Levy Bill.

The rationale provided in the CRIS for the flat rate charge was that it ‘is simple to administer and avoids disproportionate impacts on particular applicants.’52 It is agreed that a flat rate is simple to administer, although a flat rate does not necessarily avoid disproportionate impacts on particular applicants. Indeed:

48. Department of the Environment, Cost recovery implementation statement, op. cit., pp. 26-7. 49. Ibid., p. 26 50. Ibid.

51. Ibid., pp. 27-29. 52. Ibid., p. 29.

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One stakeholder suggested that the type of waste, the destination country and the final fate of the waste and the number of transit countries are more indicative of the costs incurred by the Department than the volume of the waste. 53

A flat fee effectively assumes that all waste is the same, has the same costs, poses the same environmental risks, and costs the Department the same to administer. In reality this is unlikely to be the case and may lead to disproportionate impacts on particular applicants. A flat fee by definition imposes an equal average charge across all users, yet the waste produced by all users is unlikely to be equal in terms of its costs, potential environmental risks, and costs to the Department to administer.

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53. Ibid., p. 28.