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Thursday, 21 June 2007
Page: 132

Ms ROXON (10:01 AM) —I rise today to speak on the Industrial Chemicals (Notification and Assessment) Amendment (Cosmetics) Bill 2007. The bill amends the Industrial Chemicals (Notification and Assessment) Act 1989 and provides legislative underpinning for the reform of cosmetics regulation in Australia, which has for the past several years been implemented on a limited, interim and administrative basis.

The proposed amendments to the act are intended to provide underpinning for reforms to the regulation of cosmetics, as part of the National Industrial Chemicals Notification and Assessment Scheme’s low regulatory concern chemicals reform program, and to 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.

Labor anticipate that this bill will have favourable outcomes for consumers, industry and government. We are particularly supportive of this bill because the legislative underpinning of the regulatory scheme for cosmetics will provide clarity for all involved in the cosmetics industry in Australia.

By way of background, NICNAS is the Australian government’s regulatory authority for industrial chemicals, including domestic chemicals, personal care products and cosmetics. The scheme was established in 1990 under the Industrial Chemicals (Notification and Assessment) Act 1989 and is located within the Office of Chemical Safety in the Department of Health and Ageing. NICNAS operates within a whole-of-government chemicals regulatory framework that consists of four assessment and registration schemes. In addition to the chemicals scheme operated by NICNAS, there are regulatory frameworks operated by the Therapeutic Goods Administration, for medicines and medical devices; by Food Standards Australia and New Zealand, for food and food additives; and by the Australian Pesticides and Veterinary Medicines Authority, for pesticides and veterinary medicines. The overall aim of these regulatory structures is to provide for the health and safety of the Australian people whilst also protecting the environment.

NICNAS in particular works to encourage the safe and sustainable use of industrial chemicals, providing a national notification and assessment scheme that assesses both chemicals already in use and chemicals that are new to Australia. NICNAS assessment information is made widely available and assists states and territories—particularly their offices of health and safety, public health and environmental agencies—in the environmentally sound management of industrial chemicals. NICNAS assessments also provide risk and safety information to industry, workers and the public, to promote greater awareness of the dangers of chemicals and advice on how to use them safely.

The bill will amend the 1989 act to extend the current regulatory scheme for industrial chemicals to the regulation of cosmetics as administered by the Director of NICNAS. Historically, cosmetics in Australia have been regulated within the Health and Ageing portfolio by both NICNAS and the TGA. Under the act as it currently stands, and reflecting the historical timing of the establishment of the respective regulatory agencies, a product is deemed to be a cosmetic if it is not a therapeutic good. This is determined with reference to claims about the product and its composition. This approach for defining cosmetics by their exclusion as medicines has created a disconnect between Australian industries and some of Australia’s trading partners in the sector.

This approach has also led to differential regulation of broadly similar products. Under the act as it currently stands, products classified as cosmetics are regulated by NICNAS and include an environmental assessment of chemicals in the cosmetic products, whereas therapeutic goods come under the TGA’s regulatory umbrella and no environmental assessment is undertaken. The move to reform the regulatory interface between cosmetics and therapeutic goods can be traced to the Australian government’s November 2002 response to the Chemicals and Plastics Action Agenda, which included a commitment to consider and develop options for assessing and/or testing chemicals presenting low regulatory concern. The NICNAS Low Regulatory Concern Chemicals Task Force was subsequently established to investigate the reform of the regulation of industrial chemicals of low regulatory concern.

In an acknowledgement of the particular regulatory challenges that cosmetics present, cosmetics were considered separately in this process through the Low Regulatory Concern Chemicals Cosmetics Technical Working Group. NICNAS and the TGA subsequently undertook an independent review of the regulation of products at the cosmetic-therapeutic interface in 2004-05. A draft discussion paper, Review of the regulation of products at the interface between cosmetics and therapeutic goods, was published in March 2005 for public comment and 85 written responses to this review were received from a wide range of stakeholders, including representatives of industry, consumers, regulators, medical practitioners and health care interest groups. There was overwhelming support for the proposed reforms from a majority of respondents.

The government’s response to the independent review, the Regulation of cosmetic chemicals: final report and recommendations, was published on 1 November 2005 and the Cosmetic Reforms Implementation Working Group, comprising community, industry and government representatives, was established to finalise the NICNAS cosmetic guidelines. The cosmetic guidelines consist of a set of cascading instruments which comprise criteria for defining cosmetics, a table of product categories including mandated conditions to ensure compliance with performance or other standards as required and a new mechanism for publicly identifying those chemicals that are prohibited or restricted for use in cosmetics in Australia.

The NICNAS cosmetic guidelines have provided the administrative basis for the interim regulation of some cosmetic products. According to the explanatory memorandum to this bill, 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 guidelines. This arrangement has now been in place for 12 months and over 200 products are already subject to the arrangements.

The government cited a number of reasons for now seeking legislative underpinning of these guidelines. Firstly, these interim administrative arrangements have applied only to a limited set of cosmetics; for example, skin-whitening products and anti-ageing products have not been subject to compliance. According to the explanatory memorandum, the system has been difficult to properly enforce and there is currently no capacity to penalise companies for noncompliance. There is also no capacity to charge fees from the regulated companies for cosmetic permits issued under the interim administrative arrangements, which the government has argued is not consistent with best practice. The bill therefore seeks to implement the reforms on a legislative rather than an administrative basis and to extend the reforms to additional types of cosmetics. Labor supports that approach being taken in order to clarify and enable these other matters to be properly covered.

The bill 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. It provides for the minister to determine standards by legislative instrument for cosmetics imported into or manufactured in Australia, having regard to Australia’s international obligations.

The detail of the bill obviously sets out the particular method for ensuring that those changes can come about. The new legislative scheme for cosmetics will be implemented under the 1989 act. Schedule 1 of the bill makes that change. Item 1 amends the long title to reference the fact that the legislation will, as a result of the amendments, provide for national standards for cosmetics imported into or manufactured in Australia. There is a new objects section of the act. The proposed section 3 replicates the existing objects section but adds an additional object which provides for national standards for cosmetics imported into or manufactured in Australia and the enforcement of those standards, and there are various changes which insert references to cosmetics alongside existing references to chemicals.

Item 4 repeals the existing definition of ‘cosmetic’ within subsection 5(1) and inserts a new definition defining ‘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 us with the European definition of ‘cosmetic’. The definition clarifies that a cosmetic does not include a therapeutic good within the meaning of the Therapeutic Goods Act 1989. The definition expressly includes and excludes any substance or preparation prescribed in the regulations. This has been included to ensure flexibility, particularly in relation to changes in the cosmetic industry or changes in national and international definitions that may occur over time.

Items 5 to 10 make a range of other amendments to definitions so that certain terms are no longer specific to chemicals but also apply to cosmetics. Item 11 inserts a new part 3B: ‘Standards for cosmetics imported into, or manufactured in, Australia’. The part provides for the minister, by legislative instrument, to determine the standards, and not only must the standard be registered in accordance with the Legislative Instruments Act 2003 but a copy must be published in the Chemical Gazette. For compliance with standards, this part also deals with criminal offences for importing into or manufacturing in Australia a cosmetic that is subject to the standard and does not meet the standard, and the maximum penalty for failure to comply is 120 penalty units, equivalent to $66,000 for a corporation.

Items 12 to 15 amend section 86 to enable an inspector to monitor compliance with the legislation in relation to cosmetics as well as industrial chemicals. Obviously these provisions are important when the scheme, to date, has been administered on an administrative and ad hoc basis and, as the government notes in its introductory comments and explanatory memorandum, this is one of the reasons for wanting to move this scheme, regularise it and put it into legislation so that these sorts of offences can be included. Schedule 2 of the bill deals with a range of other measures and makes a range of minor changes to improve the clarity and consistency of the act.

As I said at the beginning, Labor supports this bill. We prefer the legislative rather than administrative underpinning of the NICNAS cosmetic guidelines and we think it will help to clarify the regulatory roles and responsibilities of NICNAS and the TGA with respect to cosmetic chemicals. The changes will increase the government’s capacity to monitor and enforce compliance with the guidelines and to take action in the event of noncompliance. A legislative rather than an administrative framework will also provide greater clarity and certainty for industry—something that, of course, they always want—will help to reduce inconsistencies in the level of regulation for cosmetic products and will remove subsequent barriers to trade arising from the regulations. As I noted earlier, it is also important that it is now making us consistent with more of our trading partners in this area.

Most importantly, regulation of cosmetics by NICNAS ensures consumer confidence in cosmetic products. All products regulated as cosmetic by NICNAS will require full disclosure of ingredients on the labels, which is not currently the case for products regulated as therapeutics by the TGA, and will include an environmental assessment of chemicals in cosmetic products—again, something that I have noted is not included for the TGA assessment process. Consumers will be assured that cosmetics are subject to NICNAS oversight in such areas as the protection of health, occupational health and safety and the environment.

In summary, we are confident that the bill will help all parties involved in the cosmetic industry in maintaining confidence in the regulatory process and giving it appropriate teeth for its enforcement. Accordingly I commend the bill to the House.