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Wednesday, 31 March 2004
Page: 27662


Ms WORTH (Parliamentary Secretary to the Minister for Health and Ageing) (9:20 AM) —I move:

That this bill be now read a second time.

I am pleased to introduce the Industrial Chemicals (Notification and Assessment) Amendment (Low Regulatory Concern Chemicals) Bill 2004. The bill presents a range of amendments that deliver real reform by creating a long term, sustainable, competitive advantage for the chemicals and plastics industry. I believe these reforms offer an innovative approach to introduce flexibility into the regulation of industrial chemicals, while at the same time improving health, safety and environmental standards and public access to chemical safety information.

The bill makes a number of changes to the Industrial Chemicals (Notification and Assessment) Act 1989 (the act). The act establishes a system of notification and assessment of industrial chemicals to protect health, safety and the environment—and to provide for registration of certain persons proposing to introduce industrial chemicals. The Department of Health and Ageing portfolio, through the National Industrial Chemicals Notification and Assessment Scheme (NICNAS), administers the act.

These reforms reflect the government's commitment to ensure the most efficient regulatory system is in place for industrial chemicals, that is, a system that does not inhibit the introduction of new and safer chemicals. These reforms have been developed in partnership with industry, the community and government.

The proposed changes give effect to the government's response to the recommendations of the Chemicals and Plastics Action Agenda in December 2002. This response indicated the government's agreement to examine options for flexibility in the assessment processes for industrial chemicals.

The industry has taken the Chemicals and Plastics Action Agenda very seriously and is monitoring government and industry progress in implementing the recommendations through the Chemicals and Plastics Leadership Group. Regulation reform was considered a high priority for the chemicals and plastics industry and the proposed changes will address longstanding industry concerns about the need for more efficient approval processes for industrial chemicals.

The chemicals industry is one of the largest sectors in the world. In Australia in 2000-01 the chemicals and plastics industry contributed $6.9 billion in `industry value added'—with an annual turnover greater than $22 billion. Chemicals are integral components of most manufactured and processed primary products. The proposed amendments are aimed at enhancing Australian industry capacity and addressing issues raised by industry in the Chemicals and Plastic Action Agenda.

The proposed changes to the act are the result of seven months of collaborative effort on the part of the government, industry and the community. This led to the publication of the final report and recommendations for NICNAS Low Regulatory Concern Chemicals (LRCC) Reform Initiative and the implementation strategy for NICNAS Low Regulatory Concern Chemicals (LRCC) Reform Initiative in August 2003. The proposed changes to the act are based on the recommendations that were agreed during the reform consultation process and recorded in these publications.

The government has already implemented a number of the recommendations made in the LRCC final report that did not require legislative change. This has seen the establishment of the NICNAS Community Engagement Forum with membership drawn from national bodies including the Australian Consumers Association, the Australian Council of Trade Unions, the Health Issues Centre and the National Environment Consultative Forum. In addition NICNAS had undertaken education and training activities as well enhancing compliance activities.

The bill provides a range of reforms for industry that are counter-balanced with penalty provisions to ensure compliance as well as enhancements for public access to chemical safety information. This package delivers reform for industry while protecting existing levels of worker safety, public health and environmental standards.

One of the specific changes proposed in the bill is the introduction of a new process of audited self-assessment for low regulatory concern chemicals.

The OECD New Chemicals Task Force and the EU have praised the audited self-assessment process as a highly innovative approach and are looking at how it might be adopted within their jurisdictions. Adopting this process within Australia requires amending the act to allow manufacturers and importers, who are known as introducers under the act, to self-assess a chemical against criteria and guidelines issued by NICNAS. This will introduce flexibility into the current assessment process for industrial chemicals to enable the fast tracking of low regulatory concern chemicals while maintaining existing levels of worker safety, public health and environmental standards.

The new process for audited self-assessment will include an audited self-assessment certificate for polymers of low concern; non-hazardous chemicals; and other chemicals, or classes of chemicals that are prescribed by the regulations for the purposes of the self-assessment system.

The new self-assessment provisions will be counter-balanced with corresponding penalty provisions under the act. All holders of self-assessment certificates will be required to keep self-assessment data records for five years; to submit an annual report to NICNAS; and to comply with any notices from NICNAS requiring information relating to self-assessment data. Penalties will be imposed on introducers for breaching any of these requirements.

The changes to the act also introduce new permit categories for low regulatory concern chemicals and adopt administrative processes for some permit renewals. This includes:

a low hazard permit for chemicals of low volume; and

a permit category for controlled use chemicals.

Changes to the permit system also include expanding the early introduction permit system to cover low hazard and low risk chemicals.

Again, these new provisions will be counter-balanced with corresponding penalty provisions for breaches of permit conditions under the act.

A range of new exemptions is also proposed for low regulatory concern chemicals. The new exemption categories include:

a transhipment exemption for chemicals off-loaded at an Australian port or airport for less than 30 days and kept under the control of Customs before reshipment out of Australia;

an exemption for non-hazardous and low hazardous non-cosmetic chemicals of specified volumes;

an exemption for low concentration non-hazardous cosmetic chemicals imported in specified mixtures; and

an increase to the current exemption for research, development and analysis and the general exemption for low volume chemicals.

These exemption categories will also be subject to reporting requirements and audits by NICNAS inspectors. It will be an offence to breach any of the exemption requirements and penalties will be incurred as a result.

It is also proposed that the current company registration scheme be extended to cover the broader industrial chemicals industry. Presently, the company registration scheme only covers those who import and/or manufacture industrial chemicals over a certain annual threshold amount, which is currently $500,000 per year. Introducers over this threshold are currently required to register with and pay a company registration charge to NICNAS.

Under the changes, this scheme will be extended to cover all importers and manufacturers of industrial chemicals, regardless of the amount imported and/or manufactured each year. Essentially, this means that all importers and manufacturers of industrial chemicals will be required to register with NICNAS. Introducers below the threshold will continue to be exempt from paying company registration charge and only an annual administration fee ($336) will apply to these introducers. This will only be a minor impost on industry and is necessary because NICNAS is a fully cost recovered scheme.

This proposal for mandatory registration was suggested by industry during the reform consultation period as a way of increasing industry knowledge of NICNAS and compliance with the act and thereby enhancing community confidence in the chemical industry. This proposal will mean that—for the first time—the regulator will have direct engagement of all companies importing and/or manufacturing industrial chemicals in Australia. Currently, NICNAS only directly engages with about 11 per cent of the industry through company registration.

The amendments to the act also incorporate changes in relation to the Australian Inventory of Chemical Substances. The inventory is the legal device that distinguishes new industrial chemicals from existing industrial chemicals in Australia. All chemicals on the inventory are defined as existing chemicals, while industrial chemicals not included in the inventory are defined as new industrial chemicals and must be assessed by NICNAS before they can be introduced, unless exempt under the act.

Currently, new industrial chemicals are listed on the inventory five years after a certificate is issued by NICNAS. Under the proposed changes, however, the act would be amended to give certificate holders the option to request that an assessed chemical be included on the inventory immediately and to allow for the chemical to be listed on the inventory following this request.

Further, the proposed changes give the director of NICNAS the discretion to put additional details on the inventory. These include details of the assessment of the industrial chemical, details of use, if applicable, and any other conditions.

These amendments will mean that the introducers will no longer have to try and envisage what uses their chemicals might be put to in the future, because the chemicals will only be able to be introduced for the specific uses where this is applicable. This will prevent chemicals that have been assessed for a particular use, for instance, from being imported or manufactured for a different, unassessed use, and which could be more harmful to health, safety and the environment.

To ensure compliance with these new provisions, it will be an offence to breach a condition of the inventory, and the penalty for this offence will be 120 penalty units.

Finally, it is also proposed that the definition of `cosmetics' under the act be amended to harmonise it with that used under the trade practices legislation. This will improve consistency in the government's regulatory approach to cosmetics and will align the Australian definition with the European definition of cosmetics.

In summary, there is strong support for all of the proposed amendments. These amendments have been developed in response to industry concerns and in consultation with industry, government and the community. The reforms for fast tracking of the assessment processes are counterbalanced with enhanced public access to information, increased record keeping requirements and enhanced compliance activity.

The proposed amendments do not change the objects of the act but introduce flexibility into the current assessment process for industrial chemicals to enable the fast tracking of low regulatory concern chemicals while maintaining existing levels of worker safety, public health and environmental standards. The bill provides a package of amendments that in its entirety delivers real reform for the industry while protecting health, safety and the environment. I present the signed explanatory memorandum.

Debate (on motion by Mr Cox) adjourned.