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Wednesday, 18 October 2017
Page: 7967


Senator PAYNE (New South WalesMinister for Defence) (19:01): I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

INDUSTRIAL CHEMICALS BILL 2017

Today I'm delighted to introduce the Industrial Chemicals Bill 2017, which is the most important of six bills in a package of legislation to reform the system of industrial chemicals regulation and establish a new scheme for Australia, known as the Australian Industrial Chemicals Introduction Scheme (or AICIS). These reforms also deliver on the Coalition's commitment to reduce red tape and improve the safety risk framework for industrial chemicals in Australia.

Industrial chemicals play an essential role in everyday life - they are in paints and petrol, and are used in the production of a wide range of consumer products such as cosmetics, dyes, cleaners and plastics. They are also an integral part of Australian industry and are extensively used in mining, manufacturing, and the building and construction industry. But they can also present risks to human health, worker safety and the environment that require management through fit-for-purpose regulation.

The details for the regulations will be set out under the bills, and contain the technical and operational details to ensure the new scheme remains responsive to scientific development and changes in industry. This regulation will be subject to further public consultation.

Industrial chemicals also form part of a multi-billion dollar international market, with Australian imports and exports of industrial chemicals combined exceeding approximately $62 billion in 2015-16. It is important that Australian regulation aligns, as far as possible, with that of our trading partners, and that it is flexible enough to accommodate changes as they occur internationally, and as the science develops.

The bill that I am introducing today introduces a new scheme designed to make regulatory effort more proportionate to risk, and to promote safer innovation by encouraging the introduction of lower risk chemicals. The changes will continue to maintain Australia's high standards for protecting the Australian community (both workers and the general public) and the environment from any harmful effects of industrial chemicals.

The regulation of industrial chemicals at the Commonwealth level has existed since 1989 under the Industrial Chemicals (Notification and Assessment) Act. However with the passage of time, through successive governments, it has been recognised that reform was required to streamline what has become a very complicated regulatory scheme.

The bill will establish the Australian Industrial Chemicals Introduction Scheme, which will replace the current National Industrial Chemicals Notification and Assessment Scheme. Under the new scheme, the Executive Director, who will be an independent statutory office-holder appointed by the Governor-General, will have a range of important functions in relation to the introduction of industrial chemicals in Australia. 'Introduction' refers to importation or manufacture. The Executive Director's functions will include the assessment and publication of information about certain industrial chemicals introductions. AICIS publications will then be used by other bodies, including Australian Government and state and territory-based regulators, to aid in the protection of human health, worker safety and the environment. Poisons scheduling, occupational health and safety, and environmental protection regulation, performed under state and territory law and coordinated nationally, will be informed by AICIS publications.

The package also delivers on an important Coalition Government election commitment and an issue that is important to many Australians - banning cosmetic testing on animals. The Government has received strong public support to introduce a ban on cosmetic testing on animals. The ban provided for in this bill will bring Australia into line with the EU and other countries introducing a ban on cosmetic testing on animals, prospectively following the commencement of the legislation on 1 July 2018. Indeed, the new scheme in Australia is moving away from the use of animal test data for other purposes, so that animal test data, like in the EU, would be used as a last resort where science has not yet developed valid alternatives that can assure continued protections for human health, worker safety and the environment.

This ban will apply on the use of animal testing for more than 99% of the cosmetics ingredients introduced into Australia. The remaining less than 1% are circumstances where these chemicals are also used in other industries and this information is critical to ensure the protection of consumers, the public and workers, and the environment. The Coalition believes that the legislation will establish Australia as a world leader in this space.

The Coalition Government first announced the industrial chemical reforms as part of the 2015-16 Budget and since September 2015, there has been extensive consultation with stakeholders to develop the implementation detail for the reforms. We have undertaken four rounds of public consultation, released four consultation papers, held 8 public workshops - with over 350 stakeholders in attendance - reviewed 148 written submissions, and sought advice from international regulators. Our consultation will not stop here though, and an important process of consultation will continue with stakeholders to inform the development of delegated legislation. This will be critical to implementing the new scheme.

I think it is fair to say that our stakeholders do not all share the same views about the level of regulation that should be applied to industrial chemicals - with some favouring a more restrictive approach and others favouring a more de-regulatory approach. But, after carefully considering the views of all, I believe that the bill before us strikes a very effective balance. The bill achieves this balance in five main ways.

First, by removing unnecessary regulatory burden and improving IT systems, the costs to industry will be reduced by around $23 million annually. We have found more efficient ways to achieve similar outcomes without in any way jeopardising health and environmental protections.

Second, introduction of a more risk-based approach to regulation encourages innovation and ensures that lower risk chemicals are not subject to unnecessary restrictions. By enabling industry to self-assess lower risk chemicals, this reduces the number of chemicals assessed by the regulator by more than 70% ­­- thereby reducing costs to industry, and also enabling the regulator to focus its efforts on higher risk chemicals.

Third, the bill better aligns industrial chemicals regulation with that of Australia's trading partners. Government has worked closely with regulators in the US and Canada to ensure that wherever possible, definitions are aligned, key concepts are consistent, and most importantly that low-cost, streamlined regulatory pathways will be available for chemicals that have already been assessed by comparable international regulators. This supports the Australian industry to become more competitive internationally.

Fourth, a national inventory of industrial chemicals will be enhanced. Chemicals will be added to the inventory following assessment by AICIS under the new scheme and will be linked to the assessment statement, providing important information about the steps required to safely use these higher risk chemicals. Critically, this will improve transparency of the scheme and chemicals on the market by publishing information that is more meaningful for industry and the public, including particularly important risk and safety information about the chemicals that have been assessed.

Finally, the bill includes new powers for the regulator to ensure the protection of consumers, workers and the environment. The regulator will be able to refuse the import or manufacture of industrial chemicals where the risks cannot be adequately managed (either by the regulator, or by other Australian risk managers such as environmental authorities). The regulator will also have strengthened enforcement powers in the event of non-compliance.

An important benefit of realigning regulatory effort towards chemicals with a higher risk profile is that the costs to businesses using lower risk chemicals will be reduced. The faster regulatory pathway to introduction of lower risk chemicals provides an incentive to introduce safer new industrial chemicals, including replacing more hazardous existing chemicals. A greater focus on post-market assessment and monitoring will assist in maintaining the protection of health and safety of consumers, workers and the environment.

As mentioned earlier, in an area of science that is very dynamic and involves a high level of technical detail, it is critical that the regulatory system can adapt quickly in line with industry innovation, scientific advances and discoveries about the hazards of chemicals. For this reason, much of the detail about the types of chemicals subject to different levels of regulation will be set out in delegated legislation and guidance material. The Department of Health has already undertaken a great deal of consultation on the detail to be included in the delegated legislation and a fifth Consultation Paper seeks the further input of stakeholders. I encourage all stakeholders to contribute to this consultation process.

This bill delivers on the Coalition Government's promise to build a strong new economy by incentivising innovation, supporting Australian exporters and protecting human health and our environment.

This bill also ensures that the regulatory system provides an effective platform for the coming decades - one that is efficient, risk-based, proportionate, encourages innovation and ensures ongoing protections for consumers, workers and the environment.

The Community Affairs Legislation Committee tabled its report on the Industrial Chemicals Bill 2017 and related bills on 8 August 2017, recommending that the bill be passed. The Australian Labor Party and the Australian Greens identified some issues that remain of concern to them.

The Government has carefully considered each of the issues and recommendations proposed and would like to provide greater clarity around these issues.

Firstly, the Government is committed to the regulator continuing to evaluate unassessed chemicals on the national inventory. The new, flexible and responsive evaluation framework in the Industrial Chemicals Bill 2017 will be used to continue the process commenced through the administrative Inventory Multi-Tiered Assessment and Prioritisation (IMAP) framework, to prioritise industrial chemicals on the national inventory for systematic evaluation.

The new evaluation framework builds on the success of IMAP, which has seen over 7,500 higher priority chemicals assessed since 2012.

Secondly, the Government will ensure that the regulator tracks and reports on the status of actions taken by risk managers to increase transparency in relation to any risk management recommendations made by the regulator to address identified risks. This would be implemented in a way that allows timely publication of this information, which will be of benefit to industry and community groups.

The Government will not introduce reporting requirements for the exempted introduction category. The objective of establishing a risk-based scheme is to ensure that regulatory effort is proportionate to risk, allowing the regulator to focus resources and effort on assessing those higher risk chemicals where greater regulatory oversight is necessary. This will ensure that Australia continues to maintain its high standard of protection for human health, worker safety and the environment.

In order to use this exempted introduction category, the chemical introductions will need to meet strict objective criteria set out in the delegated legislation. This will ensure that they are very low risk. Because the regulator will publish clear and detailed information about the criteria used to categorise a chemical introduction as 'very low risk', interested members of the public will have access to meaningful information about the types of chemicals being introduced under this category.

Removing unnecessary regulatory burden for very low risk chemicals is expected to promote safer innovation by encouraging the introduction and use of cleaner and greener chemistry, which would benefit the Australian community and the environment, as well as reduce costs for industry, which would benefit Australian consumers. New and strengthened monitoring and compliance powers will enable appropriate and proportionate action to be taken to ensure continued compliance and protections for the Australian people, both workers and the public, and the environment from harmful effects from industrial chemicals.

The Government ban on the use of animal test data for chemicals introduced solely for use in cosmetics is consistent with the way a ban has been implemented in the European Union. It sees those chemicals introduced only for cosmetics subject to the ban on the use of new animal test data, while allowing, like in Europe, new animal test data—as a last resort only—for the purposes of assessing worker safety and environmental protection. It is paramount that we maintain our high standards of protections for human health, worker safety and the environment.

In addition, the Government has already announced a number of non-legislative measures which address concerns that consumers require greater clarity and certainty around animal testing and the products they are using.

Finally, the contemporary approach to legislation is to have a principles-based primary Act, with the technical and operational details in delegated legislation, or the rules, which are disallowable legislative instruments. This good regulatory practice ensures that the policy objective of creating a scheme that is risk-based and proportionate is maintained over time, with flexibility to be responsive to future regulatory and scientific developments, as well as changes in industry and emerging public concerns about industrial chemicals.

INDUSTRIAL CHEMICALS (CONSEQUENTIAL AMENDMENTS AND TRANSITIONAL PROVISIONS) BILL 2017

Today I am pleased to introduce one of the supporting bills - the Industrial Chemicals (Consequential Amendments and Transitional Provisions) Bill 2017 to the government's package of legislation to reform the industrial chemicals regulation in Australia.

The Bill is a companion bill to the Industrial Chemicals Bill 2017. It will facilitate the transition for industry and others currently operating under the Industrial Chemicals (Notification and Assessment) Act 1989 to the Industrial Chemicals Bill 2017.

This Bill will repeal the Industrial Chemicals (Notification and Assessment) Act 1989 and the three Industrial Chemicals Charges Acts at a time when the new arrangements come into effect on 1 July 2018. In addition it will make consequential amendments to a range of other Commonwealth legislation to replace references to the 'Industrial Chemicals (Notification and Assessment) Act 1989' with the 'Industrial Chemicals Act 2017'.

Most importantly, this bill will provide for the smooth transition of industrial chemicals from the old legislation to the new regulatory framework, to be known as the Australian Industrial Chemicals Introduction Scheme (AICIS).

It will do this by ensuring that the risks associated with the introduction of an industrial chemical that are managed under the Industrial Chemicals (Notification and Assessment) Act 1989 will continue to be managed following its repeal, and providing certainty to people currently introducing industrial chemicals.

The Bill provides a seamless transition to the new arrangements for those authorisations or processes that already in place by recognising existing approvals under the old legislation, and deeming others to be applications under the most appropriate category in the new arrangements.

For example, if an assessment certificate or permit on which a person is introducing a chemical was made under the Industrial Chemicals (Notification and Assessment) Act 1989, it will be considered to be made under the Industrial Chemicals Act 2017 and the controls on its introduction will continue to be applied. Importantly, a chemical that was previously on the inventory will be considered to be on the inventory under the new arrangements, providing for its continued introduction.

In some key areas, such the introduction of chemicals that are of low volume or low concentration, the transition will take place over a 12 month period so businesses have more time to align with the new requirements for introduction.

This bill will also provide for the transitioning, over a period of time, of confidential business information under the old framework to the new arrangement. Decisions to limit access to some confidential information under the old legislation will be taken to have been decisions under the Industrial Chemicals Act 2017. As these decisions are due for reconsideration, businesses will be encouraged to move to the more contemporary mechanisms.

Finally the bill also provides a degree of flexibility to make adjustments to the new arrangements or prescribe other matters of a transitional nature in the rules.

INDUSTRIAL CHEMICALS (NOTIFICATION AND ASSESSMENT) AMENDMENT BILL 2017

Today I am pleased to introduce the Industrial Chemicals (Notification and Assessment) Amendment Bill 2017 as part of a package of six Bills that reform the regulation of industrial chemicals in Australia.

The Industrial Chemicals (Notification and Assessment) Act1989 (the ICNA Act) establishes a national system of notification and assessment of industrial chemicals and for registration of certain persons manufacturing or importing chemicals into Australia.

The bill that I am introducing makes important changes to the ICNA Act to enable early commencement of certain aspects of the Coalition Government's broader reforms to industrial chemicals regulation that would otherwise commence from 1 July 2018.

The amendments to the ICNA Act in this bill include:

making changes to the definition of certain low-risk industrial chemicals (new synthetic polymers) to more closely align with international approaches to regulation;

making changes to the notification requirements for introducers of certain new chemicals, such that polymers of low concern would be exempt from notification;

removing the requirement for introducers to provide annual reports to NICNAS for permits and self-assessed assessment certificates; and

removing the requirement for certain annual reporting requirements for introducers of certain industrial chemicals in a registration year.

Collectively these changes reduce unnecessary regulatory burdens and provide a faster regulatory pathway for introduction to the Australian market for lower risk chemicals, whilst ensuring that we do not compromise the high standards for health and safety and protecting our environment.

These early reforms also set the stage for the wider package of reforms that will take effect from 1 July 2018, and are reflected in the Industrial Chemicals Bill 2017 and the related supporting bills.

This bill I introduce today contributes to the Coalition Government's commitment, to ensuring that the regulatory system provides an effective platform for the coming decades - one that is efficient, risk-based, proportionate, encourages innovation and ensures ongoing protections for Australian consumers, workers and the environment.

INDUSTRIAL CHEMICALS CHARGES (GENERAL) BILL 2017

Today I am pleased to introduce one of the supporting Bills - the Industrial Chemicals Charges (General) Bill 2017 to the government's package of legislation to reform industrial chemicals regulation in Australia. The new scheme will be known as the Australian Industrial Chemicals Introduction Scheme (AICIS).

The Industrial Chemicals Charges (General) Bill 2017 is one of three charges Bills being introduced as part of the government's package of legislation; and will replace the current Industrial Chemicals (Registration Charge-General) Act 1997. The other two bills are the Industrial Chemicals Charges (Excise) Bill 2017 and the Industrial Chemicals Charges (Customs) Bill 2017.

This Bill will facilitate a cost recovered scheme, by introducing a charge on a registered person each year they wish to introduce a chemical in accordance with the Industrial Chemicals Bill 2017. The legislation requires that the Minister for Health be satisfied that the amount charged will not be more than the likely costs of AICIS regulatory activities. This will provide introducers of chemicals with confidence that the government will not over-recover the costs of managing these regulatory activities.

The bill does not itself set the amount of the charges. The charges and who is liable and exempt from paying the charges will be set in the regulations. Specifying such matters in regulations, as opposed to the Act itself, provides the Department with sufficient flexibility to ensure that these matters are appropriate in all circumstances.

The Department of Health will be consulting extensively on the mechanism for calculating this charge to ensure cost recovery arrangements for activities provided in relation to registering chemicals are appropriately supported. I encourage all stakeholders to respond to this consultation process.

INDUSTRIAL CHEMICALS CHARGES (CUSTOMS) BILL 2017

Today I am pleased to introduce one of the three charges bills the Industrial Chemicals Charges (Customs) Bill 2017 to the government's package of legislation to reform industrial chemicals regulation in Australia.

The Industrial Chemicals Charges (Customs) Bill 2017 will impose charges only when they are considered a duty of customs. The key provisions of the bill mirror those in the Industrial Chemicals Charges (General) Bill 2017 and have the same operative function and effect.

The bill does not itself set the amount of the charge and will not impose any financial impacts. The charges and who is liable and exempt from paying the charges will be set in regulations, which will be the subject of further consultation.

INDUSTRIAL CHEMICALS CHARGES (EXCISE) BILL 2017

Today I am pleased to introduce one of the supporting bills- the Industrial Chemicals Charges (Excise) Bill 2017 to the government's package of legislation to reform industrial chemicals regulation in Australia.

The Industrial Chemicals Charges (Excise) Bill 2017 will impose charges only when they are considered a duty of excise. The key provisions of the bill mirror those in the Industrial Chemicals Charges (General) Bill 2017 and have the same operative function and effect.

The bill does not itself set the amount of the charge and will not impose any financial impacts. The charges and who is liable and exempt from paying the charges will be set in regulations, which will be the subject of further consultation.

Debate adjourned.