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Industrial Chemicals (Notification and Assessment) Amendment (Cosmetics) Bill 2007

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2004-2005-2006-2007

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

INDUSTRIAL CHEMICALS (NOTIFICATION AND ASSESSMENT) AMENDMENT (COSMETICS) BILL 2007

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by the authority of the Parliamentary Secretary to the Minister for Health and Ageing, Senator the Honourable Brett Mason)

 



INDUSTRIAL CHEMICALS (NOTIFICATION AND ASSESSMENT) AMENDMENT (COSMETICS) BILL 2007

 

 

OUTLINE

 

The Industrial Chemicals (Notification and Assessment) Amendment (Cosmetics) Bill 2007 (the Bill) amends the Industrial Chemicals (Notification and Assessment) Act 1989 (the Act).  The proposed amendments to the Act are intended to:

·          provide legislative underpinning for reforms to the regulation of cosmetics as part of the National Industrial Chemicals Notification and Assessment Scheme (NICNAS) Low Regulatory Concern Chemicals Reform Program.

 

Recommendations on this issue were considered by Government in late 2005.  The reforms were implemented on a limited, interim, administrative basis (in relation to some cosmetics only) through the NICNAS Cosmetics Guidelines until such time as the legislation could be amended to enable the Guidelines to become enforceable standards under the Act. 

 

The amendments proposed in this Bill provide this legislative basis for the cosmetics reforms.

 

While the ingredients in cosmetics have been regulated by NICNAS as industrial chemicals for quite some time, the Bill represents an extension of the existing approach by enabling the Minister to make standards, by legislative instrument, for cosmetic products as a whole that are imported into, or manufactured in, Australia. 

 

The Bill also includes a criminal offence for importing into, or manufacturing in, Australia a cosmetic that is subject to the standard and does not meet the standard.

·          make minor changes to the legislation to improve clarity, increase consistency in the legislation and address minor technical anomalies or unintended effects of the legislation.

 

 

FINANCIAL IMPACT STATEMENT

 

The new initiatives that are implemented through this Bill are cost neutral.



REGULATION IMPACT STATEMENT RIS ID 7710

 

A.      Background

 

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 legislation is administered by the Director, National Industrial Chemicals Notification and Assessment Scheme (NICNAS).



As part of broader initiatives to reduce regulation, NICNAS established the Low Regulatory Concern Chemicals Task Force to investigate reform of the regulation of chemicals of low regulatory concern. 

 

While many of the reforms recommended by the Task Force were implemented through amendments to the legislation in 2004, reforms in relation to cosmetics regulation were further developed through a Cosmetics Implementation Working Group.  In particular, the Working Group was tasked with examining reform options to address interface issues relating to the regulation of cosmetics by the Therapeutic Goods Administration (TGA) and NICNAS.

 

In November 2005, the proposed reform of cosmetic regulation in Australia was endorsed (as reflected in the Regulation of Cosmetic Chemicals: Final Report and Recommendations ) including the establishment of NICNAS Cosmetic Guidelines.  In relation to cosmetics, the major objectives of the agreed reforms were to:

·          clarify the interface between TGA and NICNAS in terms of the regulation of cosmetics;

·          enable a greater range of cosmetics to be regulated by NICNAS rather than the TGA;

·          improve regulation at the interface for identified product types, including changes that could enhance the transparency and useability of existing regulatory documents; and

·          specifically address issues dealing with antiperspirants, mass-market antidandruff shampoos, moisturisers with SPF, antibacterial skin washes, and anti-acne cleansers.

 

These reforms were subject to a Regulation Impact Statement (RIS Reference Number 5053).

In the absence of legislative underpinning, the recommended reforms were implemented on an administrative basis in relation to some cosmetic products.  Permits have been issued by NICNAS which allow for the specified product to be regulated as a cosmetic under the interim arrangements, provided that the product complies with the NICNAS Cosmetic Guidelines.  At the time that the reforms were implemented administratively, Government noted that it was intended that the reforms be underpinned with legislation.

 

B.      Problem

 

As noted above, since the reforms to the regulation of cosmetics were agreed, the reforms have been implemented on an interim, administrative basis (in relation to a limited set of cosmetics only) through contractual arrangements between NICNAS and individual companies.  This arrangement has now been in place for 12 months and over 200 products are subject to the arrangements. 

 

It is undesirable for these administrative arrangements to continue in the absence of legislative underpinning because:

·          there are some categories of cosmetics that meet the NICNAS Cosmetic Guidelines (such as skin-whitening products and anti-ageing products) that are not subject to the interim, administrative arrangements and will not come within the remit of NICNAS unless legislative changes are made.

Ø   The regulation of such products is not consistent with the level of regulation imposed by Australia’s major trading partners and this poses increased costs to manufacturers marketing such products in Australia (and also has the potential to impose barriers to trade).

Ø   Industry has expressed concern about the absence of a level playing field in relation to these cosmetics.

Ø   For products that continue to be regulated by the TGA as therapeutic goods, no environmental assessment is undertaken.  By contrast, NICNAS undertakes an environmental assessment of chemicals in cosmetic products.

·          in the absence of legislative underpinning, compliance with the regulatory requirements for cosmetics can not be properly enforced, and there is currently no capacity to penalise companies for non-compliance; and

·          there is no capacity to charge fees from the regulated companies for cosmetic permits issued under interim administrative arrangements.  As NICNAS is a fully cost-recovered agency (and must recover all of its running costs from regulated entities), there may be a degree of cross-subsidisation while the administrative arrangements continue.  This is not consistent with best practice.

 

C.      Objectives of government action

 

The objectives of government action are to:

·          maintain or enhance appropriate health, safety and environmental standards;

·          as far as possible, align Australia’s regulation of cosmetics with the international regulatory standards of major trading partners, thereby minimising any trade barriers;

·          enable full implementation of the agreed reforms for cosmetics at the interface (only partial implementation has been possible under interim arrangements).  A related objective is to ensure that there is clarity and regulatory certainty regarding the regulation of cosmetics;

·          enable proper monitoring and enforcement of compliance with the requirements for cosmetics; and

·          enable NICNAS to recover the costs of the regulation of such cosmetics. 

D.      Impacted Parties

 

The groups likely to be affected by any changes to the regulation of cosmetics are:

·          industry

Ø   The cosmetics industry is global, characterised by companies marketing branded products across international boundaries. Australia accounts for approximately 1.2% of worldwide sales of cosmetic products, with many cosmetic products imported as fully formulated and packed products.

Ø   Obtaining aggregated data on the value of sales for this sector is extremely difficult as there are multiple data sources disaggregating the retail sector into various components.  Most of this data is proprietorial.  However, the Australian cosmetics and toiletries market has been estimated by local industry organisations at $5,200 million (retail), covering about 700 million units consumed annually.  The hair care segment is the biggest, accounting for 24% of retail sales.

Ø   Subsidiaries of foreign companies are the main suppliers and the major sources of imports are the United States (38%), France (19%), the United Kingdom (11%) and Germany (4%).

Ø   There are approximately 55 companies involved in the marketing of the product categories that have been subject to the NICNAS administrative arrangements for cosmetics. 

·          consumers - The products that are subject to the reforms are very commonly used products such as anti-perspirants, moisturisers and cleansers. It is therefore expected that the majority of Australian consumers have the potential to be affected by any changes; and

·          the Australian Government - The three organisations most likely to be affected by any changes will be NICNAS, TGA and the Australian Competition and Consumer Commission (ACCC).

 

E.      Options and Impact analysis

 

Options

 

Option 1:        Maintain the status quo.

 

Option 2:         Amend the Act to implement the reforms on a legislative rather than an administrative basis and to extend the reforms to additional types of cosmetics.  This will involve:

·          placing the responsibility for regulation of cosmetics with NICNAS;

·          underpinning existing NICNAS Cosmetic Guidelines with legislation, enabling the Guidelines to be enforced; and

·          enabling NICNAS to recover the costs associated with the regulation of certain cosmetics (those that are subject to the reforms and were previously at the interface between TGA and NICNAS).

 

Impact analysis

 

Impacts of Option 1:   Retain the status quo

 

Industry:

For companies who market products that are subject to the current administrative arrangements, there are some negative impacts as the result of continuing the status quo.  For example, under the administrative arrangements, companies need to apply to NICNAS on a product by product basis - this then gives rise to a permit (or contract) between the Director of NICNAS and the company in respect of the particular cosmetic product.  By contrast, if the reforms were underpinned by legislation there would no longer be any need for product by product applications to be made to NICNAS.  Continuing the administrative arrangements therefore has resource implications for companies. 

 

One advantage of the administrative arrangement is that the companies subject to the arrangements do not pay any fees for the administrative permits.  By contrast, companies that are subject to the Act are required to pay an annual registration fee.  However, if they also supply other products that are subject to NICNAS regulation, it is possible that they will be cross-subsiding the regulation of products that are subject to the administrative arrangements.  This is also a negative impact for those companies that do not market cosmetics that are subject to the administrative arrangements.

 

For companies that produce the types of cosmetics that are not subject to the interim administrative arrangements, there would continue to be the negative impacts that were identified in the RIS that was prepared when the cosmetics reforms were considered (refer RIS Reference Number 5053).  In summary, these include the following:

·          higher regulatory compliance costs - the compliance costs for cosmetics treated as therapeutics and regulated by the TGA are higher than the compliance costs of cosmetics regulated by the NICNAS.  This is because, in general: GMP requirements do not apply to cosmetics regulated by NICNAS but if the product is considered a therapeutic good and is regulated by the TGA then in some cases GMP requirements must be met.  TGA registration fees are generally higher than NICNAS fees with TGA evaluation fees being based on the nature and size of the submission, but generally a minimum of $5,070 for listed products and a minimum of $7,270 for registered products.  The maximum for registered products is $45,150.  By contrast, NICNAS assessment fees are in the range of $2,440 to $14,418.  This range depends on, for example, whether a product contains one or more “new” ingredients, the notification category and the nature of the chemical and introduction volume.  Further detail regarding differences in fees is included in Table A (below).

 

·          continued lack of regulatory consistency with major trading partners may present a barrier to trade. When some products are defined as therapeutic goods in Australia, but cosmetics in other countries, additional data and assessment may be required in Australia beyond that which would be required if the product were regulated as a cosmetic. 

 

One industry group has estimated that the delays in passing the legislation could result in a minimum of $21 million loss in sales. This figure is based on approximately 100 new products that meet the NICNAS Cosmetic Guidelines but are not subject to administrative arrangements, that marketers were planning to introduce, having anticipated that the reformed regulatory framework would have been finally established by the end of 2006. These products are primarily anti-ageing and skin-whitening products which are regarded as cosmetics elsewhere, but are currently regulated as therapeutic goods in Australia.

 

Consumers:

For those products that are subject to the administrative arrangements, retaining the status quo is unlikely to have a significant impact on consumers.   There would continue to be oversight by NICNAS and although it could be argued that the absence of any capacity by NICNAS to enforce compliance with the NICNAS Cosmetics Guidelines may undermine consumer confidence, this is unlikely to be a significant issue for consumers particularly while there continues to be strong compliance by industry.

 

For those products that are not subject to the administrative arrangements, there is the potential that manufacturers may choose not to market certain products in Australia because of the costs associated with meeting the TGA’s requirements for regulation of such cosmetics (where these differ to the requirements of Australia’s major trading partners - particularly the EU).  This could have flow on effects to consumers in terms of limiting choice and reducing product range relative to consumers in some other countries.

 

Government:

There are risks to Government if the status quo is maintained.  This is because the Government would have no capacity to take legal action or impose penalties in the event that a manufacturer does not comply with the conditions specified in the NICNAS Cosmetic Guidelines under existing administrative arrangements.  Government would also continue to be criticised for applying the administrative arrangements to some cosmetics and not to others.  Any further extension of the administrative arrangements would only add to the potential risks to government (because more products would be subject to the unenforceable arrangements).

 

Impacts of Option 2:             Amend the Act to implement the reforms on a legislative rather than an administrative basis and to extend the reforms to additional types of cosmetics

Industry:

For the manufacturers of cosmetics who have not previously been subject to the NICNAS administrative arrangements, benefits will include: lower compliance costs; greater harmonisation with international cosmetics regulation (reducing trade barriers); and greater regulatory certainty regarding those chemicals that are regulated by NICNAS as cosmetics and those that are regulated by the TGA as therapeutic goods. 

 

Companies producing cosmetics will also be required to pay an annual registration fee to NICNAS.  While most companies that produce cosmetics already produce other products that are regulated by NICNAS (and therefore already pay an annual fee), in some cases this fee may increase where a company may need to register at a higher NICNAS Registration Tier when additional products are regulated as cosmetics. 

 

Consumers:

Regulation of cosmetics by NICNAS will ensure continued protection of public health, occupational health and safety and the environment. 

 

For those cosmetics that have not previously been subject to NICNAS oversight (and will be moving from TGA regulation to NICNAS regulation), the main benefit to consumers is that there will be full ingredient disclosure on product labels (as opposed to the requirement for medicines which involves listing only of active ingredients and ingredients known to cause adverse reactions in some persons). This will enhance consumer knowledge and the ability to make informed choices. 

 

The success of the cosmetics reforms relies on cosmetic products being marketed and presented within defined parameters.  By making these legally enforceable this provides added consumer confidence and assurances that any non-compliance can be adequately policed.  This approach ensures that not only are appropriate controls in place for cosmetic products, but that there is ability to “police” compliance though legislative underpinning of these guidelines. 

 

Government:

This option reduces risks to government because the Government would have the capacity to monitor and enforce compliance with the NICNAS Cosmetics Guidelines and to take action in the event of non-compliance.  This option also enables NICNAS to recover the costs associated with the regulation of the cosmetics that are subject to the NICNAS Cosmetics Guidelines.  This option also enhances clarity of the regulatory roles and responsibilities between NICNAS and the TGA with respect to cosmetic chemicals.

 

Table A:  Summary of key differences between Option 1 and Option 2

 

 

Option 1

 

Option 2

 

Compliance costs - Fees [1]

 

 

Evaluation fees

TGA

Min: $5070 (listed product with new substance) [$520 for listed product without new substance], $7270 (registered)

Max: $5070 (listed), $45150 (registered)

NICNAS

$2440 - $14418

Annual fees (per product)

TGA: $690 (listed), $880 (registered)

NICNAS: N/A

Annual fees (per company)

TGA: $8630 (for GMP manufacturing licence - for manufacturers only)

NICNAS: $367 - $8186

Audit fees

TGA: $460 per hour

NICNAS: N/A

Differences in nature of assessment/regulation

 

 

International harmonisation

More onerous data requirements in Australia than in other major trading partners of Australia

Better harmonisation of the regulation of cosmetics with major trading partners

Consumer information

Limited ingredients disclosure

Full ingredients disclosure

Environmental assessment

N/A

Undertaken as part of cosmetics assessment

 

F.      Consultation

 

Both NICNAS and the TGA have consulted widely with a broad range of stakeholders including: the cosmetics industry and its industry bodies; government and non-government organisations; and worker and community representatives.

 

In May 2004 NICNAS and the TGA wrote to stakeholders seeking preliminary comment on the Review of the Regulation of Products at the Interface between Cosmetics and Therapeutic Goods.  An independent consultant was also engaged to undertake one-on-one interviews with interested parties in government, industry (including industry associations) and the community.  In March 2005, a detailed draft discussion paper entitled “Review of the Regulation of Products at the Interface between Cosmetics and Therapeutic Goods” was released for public comment. 

 

NICNAS also consulted with the NICNAS Industry Government Consultative Committee, the Community Engagement Forum and the NICNAS States and Territories Memorandum of Understanding Group. 

 

Eighty-five written responses were received from a wide range of stakeholders and responses to issues raised were published on the TGA and NICNAS web sites.  In general, stakeholders considered that the arrangement for regulating products at the cosmetic-therapeutic interface was inadequate and open to interpretation and that there was an urgent need for clarity in the demarcation between cosmetic products and medicines.  Industry submissions were supportive of the reform options presented in the Review because of the benefits they would bring to industry through a more efficient and effective regulatory system. 

 

As noted previously in this RIS, some of the key elements of the reforms have been implemented through administrative arrangements (including through the NICNAS Cosmetics Guidelines).  At the time that NICNAS published these Guidelines it was noted that they were interim only and that they would be underpinned by legislation.  This was fully supported by all stakeholders.

 

Since the publication of the NICNAS Cosmetics Guidelines, NICNAS has continued to consult with stakeholders including through the NICNAS Industry Government Consultative Committee and the Community Engagement Forum.  All stakeholders strongly support the reforms being underpinned by legislation to:

 

·          provide greater clarity;

·          increase regulatory certainty;

·          enable extension of the reforms to additional cosmetics; and

·          enable action to be taken in the event of non-compliance.

 

G.      Conclusion and Recommended option

 

Option 1 does not address the existing problems which are described in Part C of this RIS, is not supported by stakeholders and is not consistent with the objectives of government action.

 

Option 2 is the preferred option.  Amending the Act to extend the reforms to additional cosmetics and to provide a legislative basis for the NICNAS Cosmetics Guidelines will deliver:

 

·          greater clarity and certainty for industry;

·          capacity for NICNAS to take action in the event of non-compliance and, by  so doing, ensure the protection of public health, occupational health and safety and the environment;

·          increased international harmonisation with Australia’s key trading partners;

·          greater access to the reforms for all relevant cosmetics products (reducing  the regulatory burden and costs to industry); and

·          enhanced consumer information.  All products regulated as cosmetics by NICNAS will require full ingredients disclosure on the labels (this is not currently the case for products regulated as therapeutics by the TGA).

 

H.      Implementation and review

 

It is proposed that the preferred option (Option 2) be implemented through legislative amendments to the Act.

 

In order to ensure that the preferred option is clear, consistent, comprehensible and accessible to users, NICNAS proposes to:

 

·          publish, and circulate widely, detailed guidance to explain the legislative changes;

·          continue to work in partnership with community, industry and Government consistent with its Community Engagement Charter; and

·          seek ongoing advice from experts on matters relating to the NICNAS Cosmetic Guidelines.

 

In order to ensure that the preferred option is sufficiently flexible to adapt to changing circumstances, it is proposed that the legislation create the power to make standards relating to cosmetics and that the actual standards be made in delegated legislation. 

 

This will ensure that changes can be made more readily, in order to adapt to any changing circumstances or new classes of cosmetic products. This is particularly important in light of the fact that the cosmetics industry is an extremely competitive one, with a high level of innovation, high product turnover and market driven style changes.

 

NICNAS will monitor the effectiveness of the legislation on an ongoing basis and will provide routine reports on the operation of, and compliance with, the new requirements to the following groups:

·          the Industry Government Consultative Committee;

·          the Community Engagement Forum;

·          States and Territories Memorandum of Understanding Group: and

·          a proposed new Cosmetics Advisory Group.

 

Each of these committees (collectively comprising all of the key stakeholders) will be able to provide advice on implementation issues. 

 

At the time that Option 2 is implemented, it is also proposed that the following amendments be made to the Act to improve clarity and consistency within the Act:

 

(a)     Amend the Act to improve consistency regarding the use of the term “calendar year” and “12 month period”;

(b)     Amend the Act to ensure consistency in the categories of information that may be claimed as exempt in connection with a permit;

(c)     Amend the Act to ensure consistency in respect of the Director’s ability to require further information from an applicant for a permit and to ensure that in all cases the Director may refuse a request for a permit should the applicant fail to comply with a notice;

(d)     Amend paragraphs 23(8)(a) and 23(8)(b) of the Act to change the word “biopolymer” to read “polymer” and in so doing address an unintended consequence of previous amendments to the Act;

(e)     Amend section 30A of the Act to rectify unintended omissions from the section by detailing the matters that the Director should consider when determining whether to grant an early introduction permit in respect of a polymer of low concern;

(f)      Repeal section 77 of the Act as this section is not currently utilised and is not necessary for compliance monitoring;

(g)     Amend the Act to ensure consistency between the publication obligations in relation to permits granted; and

(h)     Amend the Act to ensure consistency regarding NICNAS reporting obligations and protections for confidential commercial information

 

The Office of Best Practice Regulation has advised that a RIS is not required for these technical amendments.

 

These proposed amendments will have no significant impact on business, do not place any restriction on competition and do not place any significant additional requirements on the industrial chemicals industry. 

 

 

 



INDUSTRIAL CHEMICALS (NOTIFICATION AND ASSESSMENT) AMENDMENT (COSMETICS) BILL 2007

 

NOTES ON CLAUSES

 

Clause 1 - Short title

This clause provides that the Act may be cited as the Industrial Chemicals (Notification and Assessment) Amendment (Cosmetics) Act 2007 .

 

Clause 2 - Commencement

This clause provides that Sections 1 to 3 of the Act commence on the day that the Act receives Royal Assent.  Schedules 1 and 2 commence on the 28 th day after this.

 

Clause 3 - Schedules

This clause provides that each Act that is specified in a Schedule to this Act is amended or repealed as set out in the relevant Schedule.  Any other item operates according to its terms.

 

 

Schedule 1 - Cosmetics

Industrial Chemicals (Notification and Assessment) Act 1989

 

Item 1

This item amends the long title of the Act to reference the fact that the legislation will, as a result of the amendments described in Schedule 1, provide for national standards for cosmetics imported into, or manufactured in, Australia.

 

Item 1 amends the long title to read ‘An Act to establish a national system of notification and assessment of industrial chemicals, to provide for registration of certain persons proposing to introduce industrial chemicals, to provide for national standards for cosmetics imported into, or manufactured in, Australia and for related purposes’.

 

Item 2

This item repeals section 3 (Objects of the Act) and replaces the section with a new objects clause.

 

Section 3 Objects of Act

 

While the ingredients in cosmetics have been regulated by NICNAS as industrial chemicals for quite some time, the Bill represents an extension of the existing approach by enabling the Minister to make standards, by legislative instrument, for cosmetic products as a whole that are imported into, or manufactured in, Australia (refer proposed section 81).

 

The extension of regulation from cosmetic ingredients to cosmetic products has necessitated consequential amendments to various provisions in the Act, including the objects of the Act.

 

The proposed section 3 replicates the existing objects section, but adds an additional object which is to provide for national standards for cosmetics imported into, or manufactured in, Australia and the enforcement of those standards.

 

 

Item 3

Section 4 of the Act describes the additional operation of the Act.  This item amends this section by inserting references to cosmetics alongside existing references to chemicals.  This is a consequential amendment that has resulted from the extension of regulation under the Act from chemicals (including cosmetic ingredients) to cosmetic products.

 

Item 4

This item repeals the existing definition of cosmetic within subsection 5(1) and inserts a new definition.

 

The amendment achieves three main purposes:

 

·          it defines cosmetic in full by drawing on the wording currently contained in the definition of chemical product within the Trade Practices (Consumer Product Information Standards) (Cosmetics) Regulations 1991 (which aligns with the European definition of cosmetics).  Previously the definition of cosmetic in the Act simply cross-referenced this definition.  For the purpose of clarity, it is now considered desirable that the definition be included, in full, in the Act.  The inclusion of the definition does not represent any change in policy;

 

·          the definition clarifies that a cosmetic does not include a therapeutic good within the meaning of the Therapeutic Goods Act 1989.  Again, this has been included for clarity, and to address interface issues between NICNAS and the Therapeutic Goods Administration.  It is intended that once the amendments to the definition of cosmetic in the Act take effect, a change will also be made to the therapeutic excluded goods order, to provide that any product meeting the requirements in the cosmetics standard will be excluded from the definition of a therapeutic good.  It is also intended that the references to the Therapeutic Goods Act 1989 will be replaced with a reference to the new trans-Tasman therapeutic goods legislation, if and when this legislation comes into effect; and

 

·          the definition expressly includes, and excludes, any substance or preparation prescribed in Regulations.  This has been included to ensure flexibility, enabling the legislation to respond, where appropriate, to:

 

-           any significant changes in the nature of the cosmetics industry (which is recognised as an evolving and innovative industry); and

-           any changes in national or international definitions that may occur over time. 

 

Rather than needing to amend the Act (which can take a considerable period of time) regulations can be made more quickly to ensure that products do not “fall through the gaps”.  Any regulations would be developed in consultation with relevant stakeholders, and would also be subject to consideration by the Parliament.

 

Items 5 to 10

These items amend the definitions of ‘disposal’, ‘handling’ and ‘import’ so that these definitions are no longer specific to chemicals and also apply to cosmetics.  Changes to these definitions have been necessary because these words are used within section 86, which relates to searches to monitor compliance with the legislation.  Items 12 to 15 further amend section 86 to ensure that it applies not only to industrial chemicals but also to cosmetics.

  

Item 11

This item inserts a new Part after Part 3A, namely Part 3B—Standards for cosmetics imported into, or manufactured in, Australia.

 

Part 3B—Standards for cosmetics imported into, or manufactured in, Australia

 

Section 81  Setting standards

This section provides that the Minister may, by legislative instrument, determine standards for cosmetics imported into, or manufactured in, Australia, having regard to Australia’s international obligations.

 

A standard must not only be registered in accordance with the Legislative Instruments Act 2003, but a copy of the instrument must also be published in the Chemical Gazette.  This is consistent with current operating practice whereby NICNAS publishes important notices in the Chemical Gazette.  The section clarifies that failure to publish a copy in the Chemical Gazette does not affect the validity or enforceability of the instrument.

 

NICNAS intends to publish the standard on the NICNAS website, and to make it available in hard copy on request (along with, for example, any Australian Standards that are referenced in the cosmetics standard, such as the joint Australian/New Zealand sunscreen standard (AS/NZS 2604:1998)).

 

It is proposed that the standard will be consistent with the current NICNAS Cosmetics Guidelines (which have been implemented on an informal and administrative basis pending these legislative amendments).  It is further proposed that the detail of the standard will be developed in consultation with relevant stakeholders and that it will come into force at the same time as the amendments come into force (that is, 28 days after Royal Assent).  

 

Section 81A  Complying with standards

This section provides that a person commits an offence if, at a particular time:

·          the person imports into, or manufactures in, Australia a cosmetic;

·          the cosmetic is subject to a standard set under section 81; and

·          the cosmetic does not meet the standard.

 

The maximum penalty for failure to comply is 120 penalty units. This equates to the penalty for failing to comply with a condition of use listed on the Australian Inventory of Chemical Substances and is equivalent to $66,000 for a corporation.

 

Items 12 to 15

These items amend section 86 of the Act (Searches to monitor compliance with the Act etc.) to enable an inspector to monitor compliance with the legislation not just in relation to industrial chemicals, but also in relation to cosmetics.  



 

Schedule 2—Other measures

 

Part 1—Periods relevant to certain permit systems

Industrial Chemicals (Notification and Assessment) Act 1989

 

Items 1 to 8

Within the Act, reference is made in various provisions to permits being issued for certain industrial chemicals by reference to the quantity within “a calendar year”, and to the volume within a “12 month period”.  This inconsistency has created confusion within industry as to the precise effect of these sections.  The proposed amendments to sections 21Q, 21S, 21U, 21W and 22C (identified in items 1 to 8) ensure that reference is consistently made to a 12 month period. 

 

In particular:

 

·          Item 1 amends paragraph 21Q(a) (object of permit system for low volume chemicals) to reference any 12 month period (rather than any calendar year).

 

·          Items 2 and 3 amend sub-subparagraphs 21S(2)(a)(iv)(A) and (B) to provide that an application for a low volume permit is taken not to be duly made unless the applicant states the quantity of the chemical proposed to be introduced by the applicant in the 12 month period beginning on the date on which the application is made, and in each of the next two 12 month periods.  This replaces the requirement for the applicant to state the quantity of the chemical proposed to be introduced by the applicant in the period beginning on the date on which the application is made, and ending at the end of the calendar year in which that date occurs, and in each of the next three calendar years. 

 

The amendments have no effect on the duration of the permit (three years) nor on the volume to be introduced (100 kg/year, or 1000 kg/year in special cases).  In practice, applicants for the low volume permit usually provide estimates for the three years following the date of application, that is, applicants usually align their volume estimates with the three-year duration of the permit.

 

·          Item 4 amends paragraph 21U(2)(c) to provide that the Director must grant an application for a low volume permit if the Director is satisfied, among other things, that the total quantity of the chemical that is proposed to be introduced by the applicant during any 12 month period does not exceed the amounts specified in the provision (currently, the provision refers to the quantity of the chemical proposed to be introduced during any calendar year).

 

·          Items 5 and 6 amend paragraph 21W(1)(b), which relates to conditions that may be applied to low volume permits, to remove the references to ‘calendar year’ and ‘period’ and replace with references to ‘12 month period’.

 

·          Items 7 and 8 amend paragraphs 22C(2)(c) and (d) (which relate to matters to be included in applications for a controlled use permit) so that the application must state:

 

-           the quantity of the chemical proposed to be introduced by the applicant in the 12 month period beginning on the date on which the application is made; and

-           the quantity proposed to be introduced in each of the next two 12 month periods.

 

This replaces the requirement for the application to state the quantity of the chemical proposed to be introduced in the period beginning on the date on which the application is made and ending at the end of the calendar year in which that date occurs, and in each of the next three calendar years.  This amendment has no effect on the duration of the permit.  Applicants will be able to align their volume estimates with the three year duration of the permit, consistent with current practice for other applications.

 

Item 9

This item ensures that the amendments do not have any retrospective effect.  The amendments apply only to applications made, and permits granted, after the commencement of the amendments.

 

This item provides that the amendments made by:

 

·          items 2 to 4 of the Schedule apply to an application for a low volume permit, or a renewal of a low volume permit, made on or after the commencement of those items;

 

·          items 5 and 6 of the Schedule apply to a low volume permit granted as a result of the determination of an application made on or after the commencement of those items; and

 

·          items 7 and 8 of the Schedule apply to an application for a controlled use permit, or a renewal of a controlled use permit, made on or after the commencement of those items.

 

Part 2—Exempt information

Industrial Chemicals (Notification and Assessment) Act 1989

 

Items 10 to 13

Sections 21P, 21ZB and 22O of the Act each allow applicants for permits to request that certain information provided in connection with the permits be treated as exempt information under section 75 of the Act.  However, there are inconsistencies between the various categories of information that may be claimed as exempt between each of these three sections.

 

As there is no policy reason to support the inconsistencies, sections 21ZB and 22O are proposed to be amended to follow the form of section 21P, and allow all three broad categories of information to be the subject of an application that the information be treated as exempt information, if required.

 

Part 3—Commercial evaluation permit system

Industrial Chemicals (Notification and Assessment) Act 1989

 

Item 14

Sections 21F, 21SA and 22D allow the Director to request further information from an applicant for the purposes of considering the application for a permit.  The amendment described in item 14 repeals existing section 21F and replaces it with a new section to ensure consistency across all three provisions.

 

 

Section 21F  Director may request further information about application

 

This section provides that the Director may give an applicant, or another person who agrees (jointly or otherwise) to be bound by the conditions of the permit, a writt en notice requiring the person to give the Director further information about a matter referred to in subsection 21D(2), or a matter referred to in the application for the renewal of the commercial evaluation permit, within the period specified in the notice.  Subsection 21F(2) provides that the notice must specify a period of at least 14 days.

 

Item 15

This item makes a consequential amendment to section 21H to reflect the inclusion of the new section 21F.  A new subsection 3AA is inserted, which provides that the Director may refuse a request for a permit should the applicant fail to comply with a notice requesting further information under section 21F (as per item 14).

 

Item 16

This item provides that the amendments made by items 14 and 15 of the Schedule apply in relation to an application for a commercial evaluation permit or a renewal of a commercial evaluation permit made on or after the commencement of those items.

 

Part 4—Notification statements

Industrial Chemicals (Notification and Assessment) Act 1989

 

Item 17

In 2004, amendments were made to the Act to implement reforms proposed as part of the Low Regulatory Concern Chemicals Reform Program.  As part of these amendments, changes were made to the legislation to distinguish, in certain circumstances, between polymers and non-polymers. 

 

As a result of these amendments, subsection 23(8) inadvertently applies only to biopolymers, and not to all polymers.

 

This item therefore amends paragraphs 23(8)(a) and (b) to refer to polymers generally (not just to biopolymers).

 

Part 5—Application for early introduction of non hazardous chemicals

Industrial Chemicals (Notification and Assessment) Act 1989

 

Item 18

Section 30A of the Act establishes a means by which an applicant for an assessment certificate may apply for a permit to introduce certain chemicals before a full assessment of the particular chemical is completed.  As a result of the history of amendments to the Act, matters previously included in section 30A that governed whether a permit should be granted were moved to other areas of the Act, namely subsections 5(2) and 5(3). 

 

At the same time, new categories of chemicals eligible for an early introduction permit were introduced in subsection 30A(1A).  This had the unintended consequence that matters for consideration previously listed in section 30A (as to whether a permit should be granted) no longer applied to certain chemicals.

 

This item therefore specifically reinstates the matters previously included in section 30A, for a polymer of low concern, because the matters to be taken into account by the Director in deciding whether to issue a permit are not necessarily covered by the definition of a non-hazardous chemical in subsection 5(1). 

 

The notes at the end of the item insert various headings throughout section 30A to make the section clearer and easier to read.

 

Item 19

This item provides that the amendment made by item 18 of the Schedule applies in relation to an application for a permit made on or after the commencement of that item.

 

Part 6—Notice of introduction of chemical under assessment certificate

Industrial Chemicals (Notification and Assessment) Act 1989

 

Item 20

Section 77 of the Act requires a person who introduces a chemical pursuant to an assessment certificate to, within 7 days, give written notice to the Director that they have done so.

 

Since coming into effect in 1990, there has been very limited compliance with this section.  In addition, the information that would be provided by companies under this section is not necessary for NICNAS compliance activities.  Hence this item repeals section 77.

 

Part 7—Publication of notices

Industrial Chemicals (Notification and Assessment) Act 1989

 

Item 21

This item inserts within subsection 5(1) of the Act (which is the definitions section of the Act), a definition for the term ‘chemical name’.  This is a new phrase proposed to be used in amended sections 21J, 21Y and 30A.

 

‘Chemical name’, in relation to a chemical, is proposed to mean:

·          in the case of a pure chemical—the Chemical Abstracts preferred Index Name, or, if such a name is not available, the name used, or to be used, by the International Union for Pure and Applied Chemistry; or

·          in any other case—a complete description of the chemical;

including, in the case of a biopolymer, a description of the biological source of the biopolymer.

 

This definition is currently in use within the industry, and is based on the definition in the Schedule to the Act, which relates to matters required for a notification statement under section 23.

 

Items 22 to 25

Currently there is an inconsistency between the four sections of the Act that require details of different types of permits to be published.  These inconsistencies have resulted from previous amendments to the Act to incorporate the different permit systems.  These items amend sections 21J, 21Y, 22L and 30A to ensure greater consistency in the operation of the permit systems.

 

In each section, the Director’s notice in the Chemical Gazette must set out:

·          the name of the holder, or holders, of the permit; and

·          either a trade name of the chemical or the chemical name of the chemical; and

·          the period of the permit.

 

Item 26

This item provides that the amendments made by items 22 to 25 of the Schedule apply in relation to permits issued on or after the commencement of those items.

 

Part 8—Annual reporting obligations and list of chemicals

I ndustrial Chemicals (Notification and Assessment) Act 1989

 

Item 27

Subsection 21AA(1) requires that a person who introduces a new industrial chemical under subsection 21(4) or 21(6) must provide a report to the Director.  This item alters paragraph 21AA(1)(a) to clarify that the name of the chemical required in this report is the chemical name.  This is a consequential amendment that is consistent with the changes made in Part 7.

 

Item 28

Currently the Act requires NICNAS to report about permits and assessment certificates.  Recognising that such permits and certificates may include confidential commercial information, provision is made for applicants to apply to have certain information treated confidentially and not disclosed as part of the reporting undertaken by NICNAS. 

 

The Act also requires NICNAS to report annually about chemicals that are exempt from notification, yet there is no provision for information in relation to such exemptions to be treated confidentially. 

 

Item 28 therefore inserts a new section 21AAA (inserted after section 21AA) to enable applications to be made for exempt status for information supplied under section 21AA.

 

Section 21AAA Exempt information supplied under section 21AA

 

This section provides that a report under section 21AA may be accompanied by an application for some or all of the information to be treated as exempt information under section 75.  If the requested exempt information includes the chemical name of a chemical introduced during a registration year, the application must include a trade name of the chemical. This enables the chemical to be properly identified even if its full chemical name is exempt from disclosure because it is commercial in confidence.

 

Item 29

Item 29 repeals subsection 21AB(2), enabling the Director’s summary of information to exclude any exempt information, and to include any information prescribed in Regulations made under the Act.  The summary must be published in the Chemical Gazette.

 

Subsection 21AB(4) provides that where the Director has refused an application for exempt information, and the applicant applies to the Tribunal under section 102 for a review of the decision, the Director must delay the preparation of the summary until the application for review has been finalised

 

Items 30 to 32

These items amend section 75 to reflect the inclusion of the new section 21AAA and to make it clear that the Director of NICNAS must not grant an application for exempt information under section 21AAA in relation to information about the chemical name of a chemical unless the application includes a trade name of the chemical.

 

Item 33

This item inserts paragraph 110(1)(fa) after paragraph 110(1)(f) to allow regulations to prescribe fees to be paid to the Commonwealth where an application for information to be treated as exempt information is made under section 21AAA.  This enables a different fee to be prescribed for applications for exempt information under section 21AAA (as opposed to applications for exempt information under other sections).  This recognises that there is likely to be less work involved in the consideration of applications under section 21AAA and as such it may be appropriate for the fee to be lower than in other cases.

 

Item 34

This item provides that the amendments made by items 27 to 29 of this Schedule apply in relation to registration years beginning on or after the commencement of those items.

 




[1] Please note that this table is intended to provide a snapshot of some of the TGA fees for the purposes of comparison with the NICNAS fees.  There are a number of TGA fees which have not been included in this table such as travel costs for auditors etc.