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Monday, 3 November 2003
Page: 21808

Mr ORGAN (7:39 PM) —You might expect that as the sole Greens MP in this House I would welcome the Ozone Protection and Synthetic Greenhouse Gas Legislation Amendment Bill 2003 and its associated legislation, and I must say at the outset that these changes are long overdue and very welcome—as far as they go. And that is just the problem: they do not go anywhere near far enough. It is a missed opportunity. There are widespread concerns about the bill, despite a stated aim of minimising the impact of ozone-depleting substances on the environment.

The minister has told us that the purpose of this bill is to amend the Ozone Protection Act 1989 to ensure we have a truly national regulatory scheme for the management of both ozone-depleting substances and synthetic greenhouse gases—SGGs—used as their replacements. The minister told us that it also ensures Australia remains an international leader on action to preserve the earth's ozone layer by implementing the most recent amendment to the Montreal Protocol on Substances that Deplete the Ozone Layer. The explanatory memorandum to the bill says this will be done by amending the Ozone Protection Act 1989 to:

introduce a licensing system for the import, export and manufacture of syn-thetic greenhouse gases (SGGs) used as alternatives to ozone depleting sub-stances (ODS), accompanied by a licence application fee, activity levy and reporting obligations;

introduce a licensing system for refrigeration and air-conditioning equip-ment imported into Australia containing the ozone depleting substance hydro-chloro-fluorocarbon (HCFC) or the syn-thetic greenhouse gas hydrofluoro-carbon (HFC), accompanied by a licence application fee, activity levy and report-ing obligations;

extend the existing licensing system for the import, export and manufacture of ODS to a new ODS, bromochlorome-thane, including the associated licence application fee and reporting obligations;

provide for national consistency in end-use regulation of ODS and their SGG alternatives through a power to create regulations for this purpose, replacing State and Territory ODS and SGG end-use regulations that vary in both scope and nature;

extend the scope and purpose of the Ozone Protection Special Account to include all costs and revenue associated with the amended Act and management of Australia's National Halon Bank;

introduce application fees for an exemp-tion to import or manufacture certain products containing or manufac-tured with ODS; and

undertake a series of minor technical amendments to clarify the definition of “Protocol” for the purposes of the Act, and clarify the status of ODS and SGG imported for destruction.

That all sounds very worthy, but there are significant problems with this bill, and I would like to highlight some of those. For example, it has been argued that the bill is worthy of support because it improves legislation requiring review. However, this assessment is flawed for the following reasons. Firstly, it disregards the potential of natural refrigerants—as opposed to synthetic refrigerants—to replace fluorocarbons. The member for Wills has already made reference to concerns of peak environmental groups. The most significant of these is the exclusive focus on end-use controls on fluorocarbons taken by the bill and the unjustifiable dismissal in the explanatory memorandum of the potential for the uptake of non-ozone-depleting substances, non-SGG alternative substances and not-in-kind technologies such as hydrocarbons, ammonia, water and carbon dioxide.

The government has repeated fluorocarbon industry views that these substances and technologies are unproven or unsuitable. Amongst experts in the use of natural refrigerants there is no uncertainty about their suitability for use in a wide range of applications, and there is very strong interest in the refrigeration and airconditioning industry in pursuing these solutions. The government claims that a study being conducted into the suitability of natural refrigerants is needed to resolve uncertainty. The study referred to was undertaken at the behest of the natural refrigerants industry. It has been published in draft form and sheds very little new light on the suitability of alternatives, merely presenting instead a snapshot of opinion across different sectors of the industry. Taking firm action to encourage the use of natural refrigerants is not in any way dependent on the findings of the study, which is apparently being used by the government as an excuse for doing nothing. This outrageous attempt by the government to dodge the most pressing issues confronting the Australian refrigeration industry is simply unacceptable.

The use of hydrofluorocarbons, HFCs, will expand dramatically in the next few years. There is therefore no excuse for the failure of the bill to provide for strong action to facilitate a transition to the use of other substances and technologies. The limited extent of the uptake to date says nothing about the potential of such environmentally benign technologies to replace fluorocarbons in most applications, and immediately. There is a real strategic requirement to make the adoption of natural refrigerants a priority of the act and its associated regulations. The feasibility of replacing fluorocarbons is demonstrated by a number of European Union member states that have gone further by proposing a phase-out of HFCs as the primary mechanism for minimising emissions. Additionally, clear guidance needs to be given by the parliament on the formation of the proposed national industry boards.

The detailed changes to the governance of the industry will be substantially determined by the regulation made under the legislation, in particular the establishment of national industry boards that will replace the current state based licensing system. I would like to talk a little about this issue. These new national boards will play a crucial role in influencing the performance and direction of the industry, and it is essential that the boards that are put in place to perform these functions enjoy the confidence and trust of the industry participants—not just the big end of town players and those with a vested interest, such as manufacturers of chemicals and equipment, but also those workers and contractors who are at the coalface, so to speak, in the installation and maintenance of airconditioning and refrigeration facilities. They're the ones who will be regulated!

It is widely anticipated in the industry that the National Refrigeration and Air Conditioning Council, NRAC, will be appointed by the government to administer the refrigeration industry board. Back in June, I asked the Minister for the Environment and Heritage a number of questions about NRAC. The first related to the Australian Greenhouse Office having invested $3.6 million of taxpayers' funds in two organisations, Refrigerant Reclaim Australia and the National Refrigeration and Air Conditioning Council Ltd through a Greenhouse Gas Abatement Program performance based grant to facilitate better handling and recovery of hydrofluorocarbon and perfluorocarbon refrigerants. According to the minister's reply this activity is expected to result in abatement of greenhouse gases equivalent to 3.58 million tonnes of carbon dioxide.

My second question sought information on Refrigerant Reclaim Australia and NRAC in regard to their legal status, structures, directors, key operating personnel, and financial reporting. The minister revealed that Refrigerant Reclaim Australia, RRA, is a company limited by guarantee which exists primarily to be the trustee of the Ozone Depleting Substance Reclaim Trust. RRA is a not-for-profit industry-funded organisation that has been established to recover and destroy waste refrigerant gases. RRA has a board of directors and a chief executive. It contracts with professional organisations to effect the recovery, transport, storage and destruction of waste refrigerants, and, according to the minister, it utilises world best practice Australian-developed destruction technology to transform waste refrigerant to salts and water.

The minister further pointed out that the board of RRA is a vertical slice of the refrigeration and airconditioning industry, with representatives from importers, wholesalers, contractors and end users of refrigerants. Current directors are from five organisations: the Refrigeration and Air Conditioning Contractors Association, the Australian Refrigeration Wholesalers Association, the Australian Fluorocarbon Association, the Vehicle Air-conditioning Specialists of Australasia and the Air-conditioning and Refrigeration Equipment Manufacturers Association. The Chief Executive of RRA is Michael Bennett. As RRA is not a publicly listed company, it is not required to produce public financial reports. However, RRA is required to report to the Australian Greenhouse Office on expenditure relating to its Greenhouse Gas Abatement Program grant. No such reports were available at the time of the minister's response to my question on this matter.

In regard to NRAC, we were informed that it is a not-for-profit, limited liability company with a board of directors and a chief executive officer. Current board members include representatives of the four organisations I have referred to but excluding the Australian Fluorocarbon Association, along with the Motor Traders Association of Australia, the Institute of Refrigeration Airconditioning Service Engineers, the Australian Institute of Refrigeration Air-condition-ing and Heating and the Air-conditioning and Mechanical Contractors Association. Current directors are from the AIRAH; AREMA; ARWA; RACCA; VASA; and the AMCA. NRAC is currently preparing a financial report for the Australian Greenhouse Office covering the period from 19 September 2001, when the first funding was received, to 30 June 2003. That statement has not yet been received.

I also asked a question seeking details of any contracts between these organisations and the government. We know that the Commonwealth signed Greenhouse Gas Abatement Program deeds of agreement with Refrigerant Reclaim Australia and the National Refrigeration and Air Conditioning Council on 19 September 2001. As the Greenhouse Gas Abatement Program is focused on the delivery of abatement in the Kyoto protocol commitment period, and these projects therefore need to continue throughout this period, the deeds of agreement do not expire until 2013.

There are therefore a number of questions that could be asked about the validity of the abatement methodology proposed by NRAC and the extent to which it is likely to succeed, and particularly about whether NRAC is achieving the milestones specified in the deed of agreement with the Australian Greenhouse Office. One of those milestones is the registration of contractors working in the refrigeration and airconditioning field. I understand that NRAC is way behind in the number of membership registrations it needs to have, yet it is quite explicit in its June 2002 annual report that it will be in deep trouble if the legislation before us is not passed to make the scheme compulsory.

Understandably there are substantial objections from many in the industry in regard to NRAC being handed this critical regulatory role. They include a number of small business operators in the airconditioning field in my electorate of Cunningham who came to see me earlier this year and raised concerns about the impact of this new national regime and the dominance of NRAC on an industry which is going along smoothly under the present state regulatory regime. Those local business operators were very concerned about the idea of NRAC coming in and regulating on a national scale.

As you can see from the above information, NRAC is dominated by refrigerant importers and large equipment manufacturers and has been greeted with great scepticism by contractors and other industry professionals. Reflective of this lack of trust by the industry in the NRAC are the very modest membership levels NRAC is understood to have achieved to date. A number of well-established industry associations worked cooperatively in the late 1980s and early 1990s to establish the state based controls and licensing requirements for CFCs and came up with effective and widely accepted arrangements. These industry associations and organisations are the repository of the technical knowledge and practical experience that is required to develop effective systems of control and management of the industry, and it is essential that they be assured of a decisive role in the establishment of the national industry boards under this legislation. It is imperative to the success of the national industry boards that they are comprised of a genuinely representative group of experienced industry professionals and that the industry is not placed under the control of a small group that does not have the confidence of the industry at large.

As I said in the debate on the Industrial Chemicals (Notification and Assessment) Amendment Bill 2003 earlier this year, we are in danger of allowing the industry dog to wag the regulatory tail. Workers and contractors in the industry do not want this and the government needs to recognise their voices and listen to them. A further consideration about this bill is that significant improvements can easily be achieved by taking time to consider amendments. Unfortunately the member for Wills has indicated the opposition's refusal to consider such amendments, citing them as `mischief' by the Greens, although our suggested amendments do go towards supporting natural refrigerants.

When this bill reaches the Senate, the Greens will move to ban imports of synthetic greenhouse gases in small split-system airconditioners. Small domestic airconditioners imported into Australia and prefilled with synthetic greenhouse gases, called fluorocarbons, can be installed by unqualified tradespeople, which leads to the greenhouse gases leaking. If the airconditioners were imported without the gas inside, they would have to be installed by qualified tradespeople, which would stop thousands of tonnes of ozone depleting and greenhouse inducing gases from escaping to the atmosphere. This simple move would make a big contribution to reducing Australia's greenhouse gas emissions and is strongly supported by companies like Pioneer Air Conditioning and industry groups like the Heating and Cooling Association of Australia.

The Greens will also move amendments to the legislation to phase out synthetic greenhouse gases altogether and promote the move to natural refrigerants which harm neither the ozone layer nor the climate. The transition to natural refrigerants is well established in Europe and if Australia followed suit we would be well-positioned to lead the way in Asia. I therefore call on the government and the opposition to back the Greens move to ban imports of split-system airconditioners precharged with synthetic greenhouse gases and not to cave into pressure from the fluorocarbon users.

The Greens amendments to support the industry's call for a ban on the imports of split type refrigeration and airconditioning equipment precharged with HFCs and HCFCs will have a significant immediate and positive effect on improving industry practices and reducing emissions. The amendments aim to require that fluorocarbon refrigerants would have to be put into split systems—as opposed to sealed `packaged' systems—in Australia by licensed technicians, reducing leaks and waste from overcharged and/or incorrectly installed systems. An effect of this requirement will be to encourage the purchase of split type airconditioners from specialist airconditioning and refrigeration dealers and installers, who are licensed to handle refrigerant gases and are required to abide by best practice techniques to avoid leakage in the installation, operation and ongoing servicing of the equipment. Qualified professionals taking due care in the installation of split-system airconditioners is an important strategy to achieve substantial reductions in emissions from this rapidly growing sector of the industry.

The practical measure of requiring split-system airconditioners to be charged with a nitrogen holding charge instead of environmentally harmful refrigerants will provide an effective means of improving industry practice, reducing emissions and enhancing the efficient operation of airconditioning equipment. It will also help to support small- and medium-sized Australian companies and will assist them to make the investment in training their employees in best practice refrigerant handling techniques. Further significant improvements to the bill could be achieved by implementing the refrigerant classification and safety standard, AS1677 parts 1 and 2, and expanding the purposes for which funds established under the act may be used.

In summary, the government's approach encourages the overseas fluorocarbon industry while ignoring or hampering the domestic natural refrigeration industry. It is obvious that the fluorocarbon industry is concerned by the potential loss of market share they face from competition with products that are less damaging to the environment. This bill ignores numerous issues which, although largely unseen, have an impact on the lives of many Australians. The bill, as currently proposed, is seriously flawed and contains several problems that could be easily fixed. I would strongly urge the government to reconsider its position on this legislation and to take action to bring about improvements that will provide support to the Australian refrigeration and airconditioning industry and make a more substantial contribution to the reduction of harmful ozone depleting and global warming gases. Until it does, I cannot support the legislation in its present form as the government could so easily do much more to deal with this important issue.