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Ozone Protection Amendment Bill 1992



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House: House of Representatives

Portfolio: Arts, Sport, the Environment and Territories

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Purpose

To amend the Ozone Protection Act 1989 (the Principal Act) as a consequence of the amendment of the principal international treaty regarding the production and consumption of ozone depleting gasses. The main amendments will increase the number of substances covered by the Principal Act.

Background

The Principal Act was passed to allow Australia to implement the provisions of the Montreal Protocol on Substances that Deplete the Ozone Layer. The Montreal Protocol was negotiated following many years of debate about the effects of man made gasses on the ozone layer in the stratosphere. The ozone layer is particularly important as it shields against various wavelengths of ultra- violet light that can induce skin cancer and retina damage in humans and is also dangerous to many simple life forms. While the debate was largely academic in the 1970s, with proponents against action arguing that there was insufficient evidence of a link between certain man made gasses and any possible depletion of the ozone layer, the discovery of a hole in the ozone layer over Antarctica in 1985 increased the rate of progress. The signing of the Montreal Protocol by a large number of countries in 1989 was the first step in the process towards global control of such damage (however, a large number of developing countries, such as China, have not signed).

The threat to the ozone layer is the release of gasses, principally chlorine and bromine, into the upper levels of the atmosphere. Basically, the main cause of the damage is the release of chlorine, bromide and other molecules that occurs when certain man made substances reach the stratosphere and react with UV radiation. These molecules then react with ozone to cause it to breakdown. While this is a `natural' process, as is the creation of ozone in the stratosphere, the problem is that the amount of chlorine and bromine, in particular, has increased through the release of man made gasses and this has upset the previous balance between the various elements. The end result has been a decrease in the amount of ozone in the stratosphere and the appearance of holes in the layer over Antarctica and, as has recently been confirmed, in the northern hemisphere.

The main gases of concern when the Montreal Protocol was agreed to were chloroflurocarbons (CFCs), which contain chlorine, and halons, which contain bromine. The result was that the Montreal Protocol dealt with the reduction in use of five CFCs and a freeze on the consumption of three halons. Subsequent events and discoveries showed this to be one of the major failings of the Montreal Protocol. When the Montreal Protocol was signed it was expected that a range of CFC substitutes would be rapidly available. However, some of these, such hydrochlorofluorocarbons (HCFCs), while less damaging than the CFCs subject to the Montreal Protocol, still result in the destruction of ozone.

The realisation that substantial damage was being caused by the unregulated CFCs and other substances led to a meeting in London in 1990 to review the Montreal Protocol. The meeting decided to add additional CFCs and two other chemicals, carbon tetrachloride and 1,1,1- trichloroethane, to those regulated by the Montreal Protocol. This will lead in a gradual reduction in the use of such substances. HCFCs are not included in the additions although this was discussed and it is expected that they will be added at later meetings to revise the Montreal Protocol.

As with many international agreements, the Montreal Protocol is largely a compromise with nations, while concerned with the environmental effects, being also concerned with the effect reductions in the use of such substances would have on their society and economy. The failure to add HCFCs to the list of regulated substances was largely the result of countries being unwilling to take such a step until an alternative that doesn't effect ozone can be found. It has also been suggested that the large amounts invested in the development and manufacture of HCFCs has been a reason for their continued unregulated consumption. Self interest may also be part of the reasons for recent decisions in the US regarding the consumption of regulated CFCs. While the Montreal Protocol calls for the consumption of regulated substances to be cut to zero by 2000, the EEC has already proposed that this be cut to 1997. The bringing forward of this date was largely resisted in the US until evidence of a hole in the ozone layer in the northern hemisphere was produced. It is likely that this hole will affect the north- eastern US. In response, the US is now arguing for the date for the end of consumption of regulated CFCs to be brought forward to 1995.

While the Montreal Protocol will reduce the dangers to the ozone in the stratosphere, a number of dangers remain. Three of these are that the Montreal Protocol does not apply to all known substances that can destroy ozone; that there will be considerable time delays between the end of the use of such substances and any significant improvement in the level of ozone; and that the provisions of the Montreal Protocol are not accepted by all countries.

Regarding the last point, the signatories to the Montreal Protocol are principally the rich developed countries and it has not been signed by many of the developing countries, including China and India. They argue that the alternatives to CFCs are more expensive, and in some cases cost many times an equal amount of CFC, and that they will have to bear a great deal of the cost of the use of alternative gases. This will restrict their ability to introduce items that are considered normal in developed countries, such as refrigerators. They also argue that it is unfair for them to bear the cost of a problem that has largely been caused by the developed countries' previous use of CFCs and similar gases. There is also fear that the replacement gases and their manufacture may be so complex that their production will be restricted to a few developed countries and the developing countries will become dependent on them as the sole suppliers of the new products. Their view is that if the wealthy developed countries wish to reduce the use of ozone damaging gases, they should be willing to transfer the technology of their production to developing countries and to subsidise their production so that the additional cost of using the new gases is not born by developing countries. These problems have been recognised and the Montreal Protocol contains special articles relating to developing countries. Article 6 provides for a ten year delay in the restrictions on use of regulated substances where a developing country has a per capita consumption of less than 0.3 kilograms and also provides for subsidies, aid and credits in relation to the adoption of alternative technology. As well, Article 10 provides for technical assistance to be provided to developing countries. However, in reality little aid or assistance has been provided to developing countries.

Main Provisions

The amendments contained in clauses 3 to 7 are related to the introduction of new substances to the regulatory regime contained in the Principal Act. The new substances will be known as Stage- 2 scheduled substances and are listed in Schedule 1 of the Bill. They comprise 10 additional CFCs, carbon tetrachloride and methyl chloroform.

Clause 8 will insert a new section 12A into the Principal Act that will provide that the regulation regime will not apply to the manufacture or import of scheduled substances (i.e. substances that currently appear in the Schedule to the Principal Act or will be added by this Bill) for use exclusively as feedstock (i.e. in the production of other chemicals).

The export restrictions contained in the Principal Act will not apply to CFCs on board a ship or plane that is equipped with air conditioning or refrigeration equipment and the CFC is used exclusively for the servicing of such equipment in a journey between Australia and overseas or two places overseas (proposed section 12B which will be inserted into the Principal Act by clause 9).

Section 13 of the Principal Act, which makes it an offence to manufacture, import or export CFCs and halon currently covered by the Principal Act without a licence, will be amended by clause 10. The amendments will make it an offence to manufacture, import or export Stage- 2 scheduled substances without a licence. The maximum penalty for an offence against this provision will be a $50 000 fine. The amendments will also reduce the maximum penalty for an unlicensed export of a halon by a corporation from a $250 000 fine to a $50 000 fine.

Licences, other than restricted licences (see below), for the manufacture, import or export of Stage- 2 substances are not to be granted unless the applicant dealt with the substance concerned during the period 1 January 1989 until the commencement of the amendments. Stage- 1 licences, i.e. those already issued under the Principal Act, permitting the manufacture, import or export of CFCs will be deemed to apply to Stage- 2 CFCs, while no existing licence will be taken to allow dealings in carbon tetrachloride or methyl chloroform. As well, existing licences will be deemed not to allow the export of a halon (clause 11 which will amend section 16 of the Principal Act).

Proposed section 17A will allow the Minister to issue restricted licences to manufacture, import or export scheduled substances. The Minister may impose conditions on such licences, including:

* conditions controlling the nature and quantity of a scheduled substance that may be manufactured, imported or exported;

* the countries that such substances may be exported to or imported from; and

* restrictions relating to the purposes for which the substance may be used.

It will be an offence, with a maximum penalty of a $50 000 fine, to breach a licence condition

(clause 12). Clause 15 also provides that a breach of the conditions will be grounds for the cancellation of the restricted licence. Restricted licences will last for the period specified in the licence, or for a maximum of 10 years (clause 13).

The current quota system contained in Part IV of the Principal Act, will not apply to restricted licences (clause 16 which will insert a new section 22A into the Principal Act).

Where the Protocol is amended, proposed section 18A will allow regulations to be made specifying that certain kinds of licence are to cease to be in force on the date specified. The date is not be within six months of the making of the regulation or be a date before the amendment enters into force in Australia (clause 14).

Clauses 17 to 28 will amend Part IV of the Principal Act which deals with quotas for manufacture, import or export by unrestricted licence holders. The amendments principally relate to the introduction of Stage- 2 substances to the quota regime. More interesting aspects of the amendments are:

* the size of the quota to be initially allocated in respect of the manufacture or import of a substance will be the amount so dealt with in the base year (1989 for Stage- 2 CFCs and methyl chloroform); and

* the Minister will have power to reduce quotas in relation to Stage- 2 CFCs and methyl chloroform. When making such a decision, the Minister is to have regard to Australia's international obligations, government policy and other matters the Minister considers relevant.

Part VI (sections 41 to 45) of the Principal Act deals with import and export controls. Clause 30 will amend section 41 to allow regulations to be made specifying that a country that is a party to the Montreal Protocol is not to be taken to be such a country for the purposes of the Principal Act. The amendments create a number of offences, and the offences and their maximum penalty are:

* to import a Stage- 2 scheduled substance from a non- protocol country one year after the commencement of the amendment - $50 000 fine;

* to export a Stage- 2 scheduled substance to a non- Protocol country one year after commencement - $50 000 fine;

* to import a product containing a Stage- 2 scheduled substance from a non- Protocol country three years after commencement - $10 000 fine; and

* to import a product in which a Stage- 2 scheduled substance was used in manufacture from a non- Protocol country five years after commencement - $10 000 fine.

Proposed section 46A, which will be inserted into the Principal Act by clause 36, will require people who dealt with Stage- 2 scheduled substances and transitional substances (these are listed in Annex C to the Bill and are HCFCs) during the base year to give a report on their activity within one month of the commencement of the Bill. It will be an offence to fail to comply, with a maximum fine of $5 000 if the substance concerned was a transitional substance or $10 000 in other cases. Similarly, clauses 37 and 38 will require reports to be made in respect of Stage- 2 scheduled substances.

Clause 46 will repeal Schedule 3 of the Principal Act, which contains the text of the Montreal Protocol, and substitute the up- to- date text contained in Schedule 2 of the Bill.

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Commonwealth of Australia 1992

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Published by the Department of the Parliamentary Library, 1992.