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Community Affairs Legislation Committee
17/10/2012
Estimates
HEALTH AND AGEING PORTFOLIO
National Industrial Chemicals Notification and Assessment Scheme

National Industrial Chemicals Notification and Assessment Scheme

[14:36]

CHAIR: Welcome, Dr Richards.

Senator WATERS: I spoke extensively with Dr Healy in the previous estimates about the number of chemicals identified as being used in coal seam gas hydraulic fracturing fluids, or fracking as it is known. Can you give me an update on the number of chemicals that NICNAS has now identified as being used in fracking fluids in Australia?

Dr Richards : At this stage, as you are aware, we have commenced a process of engagement with industry with a view to finding out exactly how many chemicals are being used and which chemicals they are. At this stage we still do not have a precise total. We are still in some negotiation with a number of industry players regarding obtaining that information. In general they have been cooperative but they have a number of issues that we are working through in order to access that information. We have not got a precise number yet but we believe we have a process that gives the answer.

Senator WATERS: I have a few questions about the process, but in terms of an interim figure, has it changed from the 80 or 90 that Dr Healy told me in May?

Dr Richards : We are expecting it to be in that ballpark.

Senator WATERS: Okay, so there has been no change as of today.

Dr Richards : No change from that ballpark from the intelligence we have to date.

Senator WATERS: On that process, Dr Healy mentioned to me last time that the consultation with industry was essentially subject to funding. Can you update me on whether that funding has be forthcoming and what is your expected timeframe to complete those discussions with industry? When will we know what that figure is?

Dr Richards : NICNAS has received funding from the department of environment, SEWPaC as it is generally known. NICNAS has received funding to do some work for stage 1 of part of an assessment that was announced by government earlier this year.

Senator WATERS: This is the fast-tracking process, is it Dr Richards?

Dr Richards : It is identifying and starting the assessment of the chemicals used. We expected that to take about 18 months to complete.

Senator WATERS: Sorry to butt in, but I just want to make sure I am following you. Is that the same fast-tracking process where you are going to expedite the assessment of 3,000 chemicals and of that the fracking chemicals were included?

Dr Richards : No, Senator, that is a different process.

Senator WATERS: Can you talk to me about what this new process is?

Dr Richards : In January this year the government announced the establishment of an Interim Independent Expert Scientific Committee on Coal Seam Gas and Coal Mining. Following advice from this committee the Department of Sustainability, Environment, Water, Population and Communities, SEWPaC, Minister Burke agreed to provide $4.2 million for stage 1 of a project. That project is to undertake a comprehensive national assessment of the chemicals associated with coal seam gas extraction including risks associated with surface handling of chemicals in hydraulic fracturing and flow-back produced waters. We commenced stage 1 of this project on 1 July and we expect it to take around 18 months.

Senator WATERS: That is obviously running concurrently with your discussions with industry about what chemicals they are using.

Dr Richards : Those discussions are part of that project.

Senator WATERS: That is one and the same.

Dr Richards : That is right. There is a separate process, which is the inventory multitiered assessment and prioritisation process, which is the commencement of an accelerated process to evaluate chemicals that are already on the Australian Inventory of Chemical Substances.

Senator WATERS: Will the fracking chemicals already on the inventory, which are included in that 3,000 being fast tracked, still continue along that pathway or will they now be moved into this new pathway?

Dr Richards : In relation to their use in fracking they will continue down this pathway, but in relation to other uses those chemicals might, in industry more broadly, be subject to assessment under IMAP.

Senator WATERS: Thank you, that is clear now. You have $4.2 million and that will be completed in 18 months.

Dr Richards : That is the estimation at this point.

Senator WATERS: Have you been able to put additional staff on to undertake that assessment?

Dr Richards : We have recruited some additional staff and we are in the process of recruiting further staff to assess that process.

Senator WATERS: Could you on notice provide me with a few more details about the staffing that you been able to recruit.

Dr Richards : In our business plan for this year we have budgeted for an additional seven positions for that task and an additional three positions for the IMAP process.

Senator WATERS: Thank you for that; that changes things a little. I am interested now and have previously asked about the interactions of chemicals, because obviously the normal assessment process looks at chemicals in isolation but an additional concern with fracking fluids is their combination, the cocktail effect if you like. Will this new process have the capacity to assess that combined cocktail effect or will you still look at them in isolation?

Dr Richards : Certainly, Senator, we are aware of that issue and we have been looking at it. The issue is in relation to the availability of validated methodologies for assessing the effect of chemicals used together. Most of the methodologies that are used internationally in the assessment of chemicals, as you say, look at them chemical by chemical. As part of this process we are exploring the availability of methodologies, but I am not in a position to guarantee that we will be able to conduct such an assessment at this point, but we are certainly exploring that issue.

Senator WATERS: Thank you. Dr Healy told me last time that it was a bit of a methodological weakness of the process at the time but, again, she also said she thought there might be other methodologies available, so you are looking into those. Is it only that methodological constraint or is there also a funding constraint in the ability of NICNAS to look at that cocktail effect?

Dr Richards : I do not believe there is a funding constraint. It is more applying that funding to an appropriately validated methodology.

Senator WATERS: Okay. You think that that $4.2 million would allow you to look not only at the fracking fluid chemicals in isolation but also their combined effect?

Dr Richards : As I stated a minute ago, Senator, that is subject to the availability of a methodology.

Senator WATERS: A methodology that is appropriate, sure. The funding is not the problem?

Dr Richards : The $4.2 million is not just for NICNAS. NICNAS is in a way the prime contractor for this piece of work, but we are also working with CSIRO and with some sections of SEWPaC in conducting that work. The $4.2 million is for the entire project which NICNAS is managing, but not all the $4.2 million is coming to NICNAS.

Senator WATERS: Could you on notice provide me with a breakdown of who is getting what to do what? Were you asked either by SEWPaC or by the minister to advise on the utility of the assessment of the chemicals? My point is that we have just established this Interim Independent Expert Scientific Committee on Coal Seam Gas and Coal Mining and, although its advice scope is relatively broad, the decision-making powers of the minister are unfortunately not as broad. Has advice been sought from NICNAS as to how the assessment will end up being used by decision-makers?

Dr Richards : The project as a whole, the multistage project that has been announced by the government, aims to develop a broad understanding of the occupational public health and environmental risks associated with chemicals either used in or mobilised by hydraulic fracturing in coal seam gas.

The particular project we are undertaking at the moment is looking at the potential human health and environmental risks associated with the use of these chemicals. Clearly in providing advice to government about the risks that have been identified, we need to provide advice about any uncertainties in the data and in those conclusions insofar as any of those conclusions relate to methodological issues.

Senator WATERS: If you have been asked to advise on the health and environmental risks, were your investigations in any way prescribed by the department or the minister given that that committee is not charged with looking at the health effects of chemicals, despite an amendment that I proposed to fix that?

Dr Richards : Certainly the project which NICNAS has been engaged to conduct is looking at the human health and environmental risks.

Senator WATERS: So your research has not been in any way asked to concentrate in particular areas or parameters?

Dr Richards : Not that I am aware of.

Senator WATERS: That is good news.

Senator FIERRAVANTI-WELLS: Could you take on notice the funding for actual expense for 2010-11. Do you have the reference to your annual report?

Dr Richards : I have the data with me. On page 101 of the 2010-11 annual report that was tabled in parliament last year, the expenditure by NICNAS was $9, 259,000. This year's annual report is yet to be tabled but it is at the printers and I can advise that the figure for 2011-12 is $10,004,000.

Ms Halton : No cents?

Dr Richards : I do not have cents. These are rounded figures to the nearest thousand dollars.

Ms Halton : I will use that against him later. We want to make sure Hansard spelt that word correctly. Hansard, you can use various spellings and we will choose whether or not to correct you.

Senator FIERRAVANTI-WELLS: Is it only one program? Are you on track with your budget for this year?

Dr Richards : We are on track, as explained, both in TGA and OGTR. NICNAS is a cost recovered agency. We endeavour to operate on a cost-neutral basis. Some years we expend more than our receipts. Other years we expend less than our receipts. We are on track to expend what we estimate our income to be this year but obviously the income is difficult to estimate given it is cost recovered. It depends on the number of applications and on the number of companies registering.

Senator FIERRAVANTI-WELLS: Are there no changes to your budget?

Dr Richards : The budget for this year has increased for the project we were just discussing, the hydraulic fracturing work, so the estimated budget for this year is now $14,475,000.

Senator FIERRAVANTI-WELLS: Has there been any variation to staff numbers?

Dr Richards : Both in 2010-11 and 2011-12 there were 61 full-time equivalent staff. We estimate this year to require 71 full-time staff. As I answered in Senator Waters' question, seven of those are being engaged to work on the hydraulic fracturing work and three on the IMAP project.

Senator FIERRAVANTI-WELLS: What are the forward estimates?

Dr Richards : The estimated expenses as best we can judge them at this point in the forward estimates 2013-14 is $14,077,000; 2014-15 is $13,369,000; and 2015-16 is $13,753,000.

CHAIR: We now move to the Australian Commission on Safety and Quality in Health Care.