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Industrial Chemicals Environmental Management (Register) Bill 2020 [and associated Bills]



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ISSN 1328-8091

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BILLS DIGEST NO. 54, 2020-21 17 MARCH 2021

Industrial Chemicals Environmental Management (Register) Bill 2020 [and associated Bills] Sophie Power Science, Technology, Environment and Resources Section

Contents

Purpose of the Bills ......................................................... 3

Structure of the ICEMR Bill .............................................. 3

Commencement ............................................................. 4

Background ..................................................................... 4

Regulation of chemicals in Australia ........................... 4

History behind Bills...................................................... 5

Productivity Commission report ............................... 5

Council of Australian Governments’ response.......... 6 Environment Ministers decision ............................... 6

Consultation on draft legislation ............................... 7

Committee consideration ................................................ 7

Senate Environment and Communications Legislation Committee ................................................ 7

Senate Standing Committee for the Scrutiny of Bills .............................................................................. 7

ICEMR Bill .................................................................. 7

Charges Bills .............................................................. 9

Amendment Bill ......................................................... 10

Policy position of non-government parties/independents.................................................... 10

Position of major interest groups................................... 10

Cost recovery ........................................................... 11

Financial implications .................................................... 12

Statement of Compatibility with Human Rights.............. 12

Parliamentary Joint Committee on Human Rights ... 12 Key issues and provisions .............................................. 12

Purpose of the Bills ................................................... 12

Objects ...................................................................... 13

Date introduced: 3 December 2020

House: House of Representatives

Portfolio: Environment

Commencement: Various dates as set out in this Bills Digest. Links: The links to the Industrial Chemicals Environmental Management (Register) Bill 2020, the Industrial Chemicals Environmental Management (Register) Charge (Customs) Bill 2020, the Industrial Chemicals Environmental Management (Register) Charge (Excise) Bill 2020, the Industrial Chemicals Environmental Management (Register) Charge (General) Bill 2020, the Industrial Chemicals Legislation Amendment Bill 2020, and their Explanatory Memoranda can be found on the Bills’ home pages, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at March 2021.

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Key definitions ........................................................... 13

Industrial chemical .................................................. 14

Industrial use ........................................................... 14

Industrial Chemicals Environmental Management Register...................................................................... 14

Figure 1: proposed structure of the national standard .................................................................. 15

Scheduling decisions ............................................... 16

Considerations for scheduling decisions ............... 18 Decision-making principles ..................................... 18

Public consultation before scheduling decisions .... 19 Advisory Committee .................................................. 20

Rules .......................................................................... 21

Cost recovery............................................................. 21

Confidentiality and information sharing ................... 22

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Industrial Chemicals Environmental Management (Register) Bill 2020 [and associated Bills] 3

Purpose of the Bills This Bills Digest is for a legislative package of five Bills, that is, the:

• Industrial Chemicals Environmental Management (Register) Bill (ICEMR Bill)

• Industrial Chemicals Legislation Amendment Bill 2020 (Amendment Bill) and

• three Charges Bills:

- the Industrial Chemicals Environmental Management (Register) Charge (Customs) Bill 2020 (Customs Bill) - the Industrial Chemicals Environmental Management (Register) Charge (Excise) Bill 2020 (Excise Bill) and - the Industrial Chemicals Environmental Management (Register) Charge (General) Bill 2020

(General Bill).1 The purpose of this legislative package is to:

• establish a national framework and nationally consistent standards to manage the environmental risks of industrial chemicals, which will then be implemented by states and territories and the Commonwealth within their own jurisdictions

• establish a cost recovery model to implement the national framework and

• make consequential and other minor amendments to the Industrial Chemicals Act 2019.

Structure of the ICEMR Bill The ICEMR Bill is divided into six parts:

• Part 1 sets out preliminary provisions including the objects and definitions

• Part 2:

- establishes the Industrial Chemicals Environmental Management Register (the Register) - enables the Minister to make ‘scheduling decisions’ which assign industrial chemicals to a schedule of the Register - enables the Minister to make decision-making principles which set out criteria for scheduling

decisions

• Part 3 establishes the Advisory Committee on the Environmental Management of Industrial Chemicals

• Part 4 provides mechanisms for sharing and protecting information, and for the use and disclosure of protected information in certain limited circumstances

• Part 5 deals with the administration of the scheduling charge imposed by the Charges Bills, including liability for the payment of the charge and

• Part 6 contains miscellaneous provisions, including delegation provisions and provisions which enable the Minister to make rules in relation to the proposed regime.

1. The three Charges Bills are separate due to the constitutional requirement for taxation, duties of excise and duties of customs to be dealt with in Bills that only include that individual, respective type of charge: Commonwealth of Australia Constitution Act, (Australian Constitution) section 55.

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Commencement Bill Commencement

ICEMR Bill The day after Royal Assent

Amendment Bill Sections 1-3 on Royal Assent

Schedule 1 on the day after Royal Assent

Schedule 2 on the later of: the start of the day after Royal Assent and immediately after the commencement of the Industrial Chemicals Environmental Management (Register) Act 2020. Schedule 2 will not commence if the Industrial Chemicals Environmental Management (Register) Act does not commence.

Schedule 3 on the later of: immediately after the commencement of the Industrial Chemicals Environmental Management (Register) Act 2020 and immediately after the commencement of the Federal Circuit and Family Court of Australia Act 2020. Both these events must occur for Schedule 3 to commence.

Charges Bills The later of the start of the day after Royal Assent and immediately after the commencement of the Industrial Chemicals Environmental Management (Register) Act. However, these Bills will not commence if the Industrial Chemicals Environmental Management (Register) Act does not commence.

Background

Regulation of chemicals in Australia Chemicals introduced to Australia (whether through importation or manufacture) are regulated through four federal schemes. The schemes are divided by end use of the product. The four areas concentrate on:

• therapeutic goods including medicines and sunscreens—regulated by the Therapeutic Goods Administration under the Therapeutic Goods Act 19892

• human food—regulated by Food Standards Australia New Zealand (FSANZ) under the Food Standards Australia New Zealand Act 19913

• agricultural products, pesticides, veterinary medicines and animal food—regulated by the Australian Pesticides and Veterinary Medicines Authority (APVMA) under the Agricultural and Veterinary Chemicals (Administration) Act 1992, the Agricultural and Veterinary Chemicals Code Act 1994 and the Agricultural and Veterinary Chemicals Act 19944 and

• industrial chemicals (chemicals which are not covered by the other categories) including those used in products such as ink, plastics, paint, glue, soaps and cosmetics5—regulated under the

2. Therapeutic Goods Administration (TGA), ‘Legislation and legislative instruments’, TGA website, n.d. 3. Food Standards Australia New Zealand (FSANZ), ‘Food law, treaties and agreements’, FSANZ website, n.d. 4. Australian Pesticides and Veterinary Medicines Authority (APVMA), ‘Legislative framework’, APVMA website, last updated 22 October 2019.

5. Department of Health (DoH), ‘What is an industrial chemical?’, Australian Industrial Chemicals Introduction Scheme (AICIS) website, n.d.

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recently revised scheme, the Australian Industrial Chemicals Introduction Scheme (AICIS),6 which commenced on 1 July 2020 and was established by the Industrial Chemicals Act 2019.7

As outlined in the ‘Key issues and provisions’ section of this Digest, these Bills aim to build on the recent reforms to the regulation of industrial chemicals by the Industrial Chemicals Act.8 They follow a long process of reform and consultation, as discussed further below.

History behind Bills

Productivity Commission report In 2007, the Government announced that the Productivity Commission would undertake a study into the regulation of chemicals and plastics.9 The Productivity Commission was asked to identify duplication and inconsistency of those regulations within and across all levels of government in Australia.10

The Productivity Commission released its Research Report on Chemicals and Plastics Regulation in August 2008. Chapter 9 of the report addressed the issue of managing the impact of chemicals on the environment and found:

• Chemicals have the potential to impact adversely on the environment during their manufacture, use and disposal. Governments have a role in intervening to ensure that the risks of adverse impacts are managed where that is effective and efficient.

• Governments have regulated to address the impact on the environment of a number of chemicals with known hazards. However, a large number of chemicals in use have not been subject to environmental (or other) hazard and risk assessment.

• There are some differences in the way that each state and territory regulates for environmental protection, including with respect to chemicals and plastics. This can reflect the different environments across jurisdictions and the manner in which different regulatory regimes have evolved.

• The regulatory framework for managing the impact of chemicals on the environment could be improved.11

Among other matters, the report recommended ‘the establishment of a new environmental standard-setting body … to set nationally consistent standards as necessary’, and that the states and territories should uniformly adopt the standards by reference.12

6. DoH, ‘Australian Industrial Chemicals Introduction Scheme’, AICIS website, n.d. 7. DoH, ‘Industrial chemicals’, DoH website, last updated 15 July 2019. This scheme relaced the former National Industrial Chemicals Notification and Assessment Scheme (NICNAS) and the Industrial Chemicals (Notification and Assessment) Act 1989.

8. Explanatory Note—Overview of the Legislative Framework for the National Standard for the Environmental Risk Management of Industrial Chemicals, Exposure draft of the Industrial Chemicals Environmental Management (Register) Bill 2020, 2020. 9. P Costello (Treasurer) and I Macfarlane (Minister for Industry, Tourism and Resources), Productivity Commission study of chemicals and plastics regulation, joint media release, 26 July 2007. This followed the 2006 recommendations made by the

Australian Government’s Taskforce on Reducing Regulatory Burdens on Business and the Council of Australian Governments’ (COAG) identification of regulation of chemicals and plastics as a priority area where ‘overlapping and inconsistent regimes are impeding economic activity’: Council of Australian Governments (COAG), Communique, 10 February 2006, p. 10; Productivity Commission (PC), ‘Taskforce on Reducing Regulatory Burdens on Business’, PC website, n.d.; Australian Government, Rethinking regulation: Report of the Taskforce on Reducing Regulatory Burdens on Business, Report to the Prime Minister and the Treasurer, Canberra, January 2006, pp. iv and 62-70. 10. Costello and Macfarlane, Productivity Commission study, op. cit. 11. PC, Research Report on Chemicals and Plastics Regulation, Research paper, PC, Melbourne, July 2008, p. 229. 12. Ibid., recommendation 9.2 on pp. 262-263.

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Council of Australian Governments’ response In November 2008, in response to the Productivity Commission’s recommendations, the Council of Australian Governments (COAG) requested the Environment Protection and Heritage Council (EPHC) to progress a proposal for establishing a standard-setting body for chemicals in the environment. COAG noted that this would ‘close a significant gap in the current arrangements for environmental protection’ and provide for a ‘single national decision on the environmental management of chemicals which can be adopted by reference and applied consistently in all jurisdictions’.13

Responsibility for this reform was transferred to the COAG Standing Council on Environment and Water when it replaced the EPHC in 2011.14 In April 2013, the Standing Council released a Consultation Regulation Impact Statement (RIS) on options for developing and implementing nationally consistent decisions to manage the environmental risks of industrial chemicals.15 This aimed to implement the reforms recommended by the Productivity Commission, including the creation of a standards-setting body to develop national environmental risk management decisions for industrial chemicals.16

According to the Department of Agriculture, Water and the Environment (the Department), feedback from the RIS consultation process ‘was used to refine the approach’ and options were presented for consideration by Environment Ministers:

The preferred option was a cooperative framework including a National Standard and decision powers established under Commonwealth legislation. Automatic adoption under jurisdictional legislation would occur for implementation and compliance.17

Environment Ministers decision In July 2015, Commonwealth, state and territory Environment Ministers agreed to establish a national standard to manage the environmental risks of industrial chemicals.18 The Bill aims to ‘deliver on the approach agreed by environment ministers and the recommendation of the Productivity Commission to fill this regulatory gap through the National Standard’.19

In February 2018, the Meeting of Environment Ministers noted ‘progress’ on the development of a National Standard for environmental risk management of industrial chemicals:

The Commonwealth and states and territories have been working collaboratively, and with close consultation with business and the community, to develop the National Standard.

The Australian Government will commence drafting legislation to establish this framework for protecting the health of our environment and everything living in it.

13. COAG, Response to the Productivity Commission’s recommendations for chemicals and plastics regulatory reform from its report of July 2008, [2008], p. 16. 14. National Environment Protection Council (NEPC), ‘EPHC Archive’, NEPC website, n.d. 15. PricewaterhouseCoopers Australia, Consultation Regulation Impact Statement: management of chemical environmental risks,

[Sydney], PricewaterhouseCoopers Australia, 2013. 16. COAG Standing Council on Environment and Water, ‘Management of chemical environmental risks - Consultation Regulation Impact Statement’, COAG Standing Council on Environment and Water website, last updated 9 July 2013 (archived on TROVE). 17. Department of Agriculture, Water and the Environment (DAWE), ‘Chemicals management’, DAWE website, n.d. 18. Meeting of Environment Ministers, Agreed statement, 15 July 2015, p. 2. 19. DAWE, Submission to the Senate Standing Committee on Environment and Communications, Inquiry into the Industrial

Chemicals Environmental Management (Register) Bills 2020, [Submission no. 2], 21 January 2021, p. 4.

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All jurisdictions will continue to work together and consult broadly during implementation of the National Standard to ensure we deliver the best possible outcomes for governments, businesses and the community.20

Consultation on draft legislation In January 2020, the Department released draft legislation and supporting information for public consultation in February 2020.21 The supporting information explained that the draft legislation aims to build on recent reforms to the regulation of industrial chemicals by the Industrial Chemicals Act, and that the ‘ICEMR Bill has been designed to work in conjunction with the mechanisms under the [Industrial Chemicals Act], and to avoid duplication’.22

Eleven formal submissions were received.23 According the Department, feedback received during that process has been ‘incorporated into the final legislative package’.24

Committee consideration

Senate Environment and Communications Legislation Committee The Bills were referred to the Senate Environment and Communications Legislation Committee for inquiry and report by 11 March 2021. The Committee received seven submissions. Issues raised in these submissions are discussed elsewhere in this Digest. The Committee recommended that the Bills be passed,25 but also made two other recommendations:

• that the government and the Department ‘continue to actively engage state and territory governments, particularly around planning for the adoption of the Register in their respective jurisdictions’ (recommendation 1) and

• that the Department continue its engagement with industry stakeholders in the implementation of the Bills, ‘particularly with reference to the cost-recovery arrangements and the role of Australian Industrial Chemicals Introduction Scheme’ (recommendation 2).26

Senate Standing Committee for the Scrutiny of Bills

ICEMR Bill The Scrutiny of Bills Committee has raised concerns that the ICEMR Bill provides for a range of matters that are significant to the operation of the proposed framework for managing industrial chemicals to be set out in non-disallowable legislative instruments.27 This includes:

• subclause 22(1), which allows the Minister to establish a register of scheduling decisions for industrial chemicals

• subclause 23(1), which proposes to enable the Minister to determine principles to be complied with in making, varying or revoking scheduling decisions and

20. Meeting of Environment Ministers, Statement on environmental management of industrial chemicals, 16 February 2018. 21. DAWE, ‘National standard consultation and Bill’, DAWE website, n.d. 22. Explanatory Note, op. cit., p. 2. 23. The submissions are available at: DAWE, ‘National standard consultation and Bill’, op. cit. 24. DAWE, Submission, op. cit., p. 6. 25. Senate Environment and Communications Legislation Committee, Inquiry into the Industrial Chemicals Environmental

Management (Register) Bill 2020 [Provisions] and related bills, The Senate, Canberra, 11 March 2021, p. 23 (recommendation 3). 26. Ibid., pp. 16 and 20. 27. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 2, 2021, 3 February 2021, p. 6.

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• clause 76, which enables the Minister to make rules prescribing various matters required or permitted by the Bill, or which are necessary or convenient to be prescribed for carrying out or giving effect to the Bill.28

The Scrutiny Committee observed that the note accompanying each of these provisions states that section 42 (disallowance), and Part 4 of Chapter 3 (sunsetting), of the Legislation Act 2003 do not apply to the instrument. The Committee expressed the view that matters which may be significant to the operation of a legislative scheme should be included in primary legislation unless sound justification for the use of delegated legislation is provided.29 The Explanatory Memorandum does explain that the exemptions are because the legislation facilitates the establishment or operation of an intergovernmental scheme.30 However, the Committee stated its expectation that any exemption of delegated legislation from the usual disallowance and sunsetting processes should be fully justified in the Explanatory Memorandum, including why the exemption is appropriate in the particular circumstances.31

As such, the Committee requested the Minister's advice as to why it is appropriate and necessary for the relevant matters to be left to the delegated legislation which is exempt from parliamentary disallowance and sunsetting.32 The Committee also queried whether the Bill could be amended to provide that these matters are subject to the usual parliamentary disallowance and sunsetting processes.33

In response, the Minister advised that the exemptions in sections 44 and 54 of the Legislation Act are ‘automatic exemptions’, and:

… at the time of enactment, the rationale for including these exemptions for instruments made under national schemes focused on concerns about unilateral actions of one party to an agreement affecting the operation of multi-jurisdictional schemes.34

In relation to the proposed principles, the Minister explained that they would be included in a technical document based on up-to-date scientific information and as such, ‘it is appropriate that the Principles be set out in delegated legislation to allow for them to be amended as necessary in response to evolving scientific knowledge’.35 The Minister gave similar reasons in relation to the Register and Rules.36 The Minister also explained, for example, that as the states and territories will draw from the scheduling decisions in the Register, if the Register were subject to sunsetting, certainty could be undermined for both governments and industry, and disallowance ‘would affect the content of State and Territory legislation, which would be inconsistent with the intergovernmental agreement.’37

The Committee noted the Minister's advice, but requested that an ‘addendum to the explanatory memorandum containing the key information provided by the minister be tabled in the Parliament

28. Ibid. 29. Ibid., pp. 6-7. 30. See, for example, Explanatory Memorandum, Industrial Chemicals Environmental Management (Register) Bill 2020 (ICEMR Bill), pp. 25-26.

31. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 2, op. cit., p. 7. 32. Ibid. 33. Ibid. 34. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 4, 2021, 24 February 2021, p. 23. 35. Ibid., p. 21. 36. Ibid., pp. 21-23. 37. Ibid., p. 22.

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Industrial Chemicals Environmental Management (Register) Bill 2020 [and associated Bills] 9

as soon as practicable’.38 The Committee also drew its scrutiny concerns to the attention of Senators and left to the Senate as a whole:

… the appropriateness of leaving matters which are significant to the operation of the legislative scheme established by the Bill, including principles to be complied with when making scheduling decisions and rules prescribing a wide range of matters, to delegated legislation which is exempt from parliamentary disallowance and sunsetting.39

Charges Bills The Committee also raised concerns in relation to each of the three Charges Bills, which seek to impose a charge as a tax payable by a registered introducer of industrial chemicals for a registration year. The Committee noted that subclause 8(1) of each Bill provides that the amount of the charge payable in each case may be prescribed by the regulations, and the regulations may either set out the amount of the charge payable or a method for working out the amount.40

The Committee stated its ‘consistent scrutiny view’ that ‘it is for the Parliament, rather than makers of delegated legislation, to set a rate of tax.’41 The Committee noted that the Explanatory Memoranda state that there is a need for flexibility in prescribing the amount of the charge and that any applicable charge will be determined through a Cost Recovery Implementation Statement and will be consistent with the Australian Government Charging Framework and the Australian Government Cost Recovery Guidelines.42 Nonetheless, the Committee noted that it ‘has generally not accepted a desire for administrative flexibility to be a sufficient justification, of itself, for leaving significant matters to delegated legislation’.43 The Committee suggested that it is unclear to ‘why at least high-level guidance in relation to these matters cannot be provided’.44

The Committee therefore requested the Minister's advice as to whether:

• guidance could be specifically included in each Bill in relation to the method of calculation of these charges and/or a maximum charge or

• the Bills could be amended to specify that, before the Governor-General makes regulations prescribing an amount of charge, the Minister must be satisfied that the amount of the charge is set at a level that is designed to recover no more than the Commonwealth’s likely costs in connection with the administration of the framework established by the ICEMR Bill.45

In response, the Minister advised that the amount of any applicable charge will be determined through a Cost Recovery Implementation Statement (CRIS) and that this CRIS (including the method of calculation) would be released for public consultation.46 The Minister advised that, for these reasons, the method of calculation of charges or the maximum charge will not be able to be included in the Bills themselves before this process is completed.47 The Minister further advised that the Department of Finance must be satisfied that the charge is set at a level that is designed to recover no more than the full and efficient costs of the administration of the framework and that the Finance Minister must agree to the final CRIS.48

38. Ibid., p. 24. 39. Ibid. 40. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 2, op. cit., p. 8. 41. Ibid. 42. Ibid., p. 9. 43. Ibid. 44. Ibid. 45. Ibid., p. 9. 46. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 4, op. cit., p. 26. 47. Ibid. 48. Ibid.

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The Committee noted this advice, and requested ‘an addendum to the Explanatory Memorandum containing the key information provided by the minister be tabled in the Parliament as soon as practicable’.49 The Committee also drew this matter to the attention of senators and left to the Senate as a whole the appropriateness of allowing the rate of charges in relation to the scheduling of industrial chemicals to be set in delegated legislation.50 Finally, the Committee also drew this matter to the attention of the Senate Standing Committee for the Scrutiny of Delegated Legislation.51

Amendment Bill The Scrutiny Committee had no comment on the Amendment Bill.52

Policy position of non-government parties/independents At the time of writing, non-government parties and independents do not appear to have commented on the Bills.

Position of major interest groups In its submission to the Senate inquiry, Accord53 supported the introduction of a new framework for a nationally uniform approach for the environmental risk management of industrial chemicals.54 However, it highlighted the ‘regrettably poor timing’ of the introduction of the regime during a time of pandemic, particularly given the industry concern about costs and other administrative burdens associated with the proposed new regime.55 Nonetheless, Accord supported the ICEMR Bill ‘being passed as written’.56

In its submission to the Senate inquiry, Chemistry Australia supported the principles to which the Bills are directed, being the protection of the environment through the appropriate management of risks posed by industrial chemicals; and the establishment of nationally consistent, transparent, predictable, streamlined and efficient approaches to the environmental risk management of industrial chemicals. Chemistry Australia also supported those elements of the Bills that provide a framework for Australia to ratify and give effect to the decisions made under the Stockholm Convention on Persistent Organic Pollutants and other international agreements.57

However, Chemistry Australia noted that the success of the scheme and its ability to meet its objects is entirely dependent upon its uniform adoption in state and territory legislation.58 Chemistry Australia expressed concern that, without uniform adoption:

… the scheme will simply introduce an additional layer of regulatory burden/cost and potentially become an obstacle to the availability of newer, innovative and safer chemistry in Australia, undermining all of the benefits of the reforms introduced by the Industrial Chemicals Act 2019.59

49. Ibid., p. 27. 50. Ibid. 51. Ibid. 52. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 2, op. cit., p. 26. 53. Accord is the national industry association representing manufacturers and marketers of formulated hygiene, personal care

and specialty products, their raw material suppliers, and service providers: Accord, Accord website, n.d. 54. Accord, Submission to the Senate Standing Committee on Environment and Communications, Inquiry into the Industrial Chemicals Environmental Management (Register) Bills 2020, [Submission no. 7], 29 January 2021, p. 1. 55. Ibid. 56. Ibid. 57. Chemistry Australia, Submission to the Senate Standing Committee on Environment and Communications, Inquiry into the

Industrial Chemicals Environmental Management (Register) Bills 2020, [Submission no. 5], 2 January 2021, p. 2. 58. Ibid. 59. Ibid.

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For this reason, Chemistry Australia suggested a provision be incorporated in the Bills to delay commencement of the scheme until implementing legislation has been passed by every state and territory. Chemistry Australia considered this would ‘encourage all states and territories to promptly enact legislation to implement the scheme and avoid a situation under which different rules might continue to apply across jurisdictions for some time’.60

The Minerals Council of Australia did not make a submission to the Senate Committee Bill inquiry but did make a submission in relation to the exposure draft of the Bill (as mentioned in the ‘Background’ section of this Digest). In that submission, the Minerals Council expressed general support for the draft Bill, particularly the requirements for the Minister to consult before making, varying or revoking a scheduling decision on an industrial chemical, and to comply with the decision-making principles.61 The Minerals Council also supported the ‘standing of the register’ as not prohibiting, restricting or creating obligations in State or Territory jurisdictions.62 The Minerals Council considered that ‘this approach allows for flexibility in chemical management pending the activity and locality with respect to environment and social considerations’.63

Cost recovery Several industry groups expressed concern about the cost recovery arrangements proposed for the new regime. For example, Accord expressed concern about the increases in registration costs already experienced as a result of the AICIS scheme, and about the limited transparency ‘at this stage about the estimated costs’ relating to the proposed new regulatory scheme to be established by the ICEMR Bill.64 Accord called for the charges to be set at nil initially, along with ‘meaningful consultation’ with industry on the cost-recovery arrangements.65

The Vinyl Council of Australia (the peak association for the vinyl, or PVC, industry in Australia) similarly noted the intention that annual scheduling charges on registered introducers of industrial chemicals should be implemented on a government cost recovery basis. The Council raised concerns about the impact of existing AICIS registration fees on its members, and particularly small businesses, and suggested that the AICIS registration fee schedule be amended.66

Chemistry Australia also noted the current fees and charges imposed on industry under the AICIS, which it considered ‘already incorporate elements of cost recovery for the environmental assessment of industrial chemicals’.67 Chemistry Australia therefore questioned whether a separate cost recovery scheme under the ICEMRB is necessary:

While the collection of the ICEMRB fee might be managed as part of the annual AICIS fee payment arrangements, a separate cost recovery scheme will still require additional work by the Department, including the preparation of annual cost recovery impact statements and consultations with stakeholders. It will also impose additional burdens on industry. The costs associated with the cost recovery regime may well end up being a significant part of the costs of administering the Register.68

60. Ibid. 61. Minerals Council, Submission on the exposure draft Industrial Chemicals Environmental Management (Register) Bill 2020, 21 February 2020, pp. 1-2. 62. Ibid., p. 2. 63. Ibid. 64. Accord, Submission, op. cit., p. 4. 65. Ibid., pp. 4-5. 66. Vinyl Council Australia, Submission to the Senate Standing Committee on Environment and Communications, Inquiry into the

Industrial Chemicals Environmental Management (Register) Bills 2020, [Submission no. 3], 20 January 2021. 67. Chemistry Australia, Submission, op. cit., pp. 2-3. 68. Ibid.

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On this issue, the Minerals Council suggested (in its submission on the Exposure draft of the Bill) that cost recovery arrangements should ‘focus primarily on new substances’, given that extensive data already exists for a range of substances.69

Financial implications According to the Explanatory Memorandum, the measures in the ICEMR Bill ‘are estimated to have a minimal financial impact on the Australian Government Budget’:

The initial costs of implementing the National Standard have been funded by the measure ‘Environmental Management - the use and disposal of industrial chemicals’ which provides $9.1m for 5 years from 2019/20 (and $1.3 million per year ongoing) to set standards for how industrial chemicals that pose a risk to the environment should be managed through their life cycle. The Bill introduces arrangements to recover the cost of this measure through a levy applied alongside the annual registration charge for chemical introducers under the Industrial Chemicals Act 2019.70

The Charges and Amendment Bills have no financial impact on the Australian Government.71

Statement of Compatibility with Human Rights As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the compatibility of the Bills with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bills are compatible.72

Parliamentary Joint Committee on Human Rights The Parliamentary Joint Committee on Human Rights had no comment on the Bills.73

Key issues and provisions74

Purpose of the Bills These Bills aim to build on the recent reforms to the regulation of industrial chemicals by the Industrial Chemicals Act.75 While industrial chemicals are assessed for health and environmental risks through the AICIS under the Industrial Chemicals Act, regulations for managing the environmental risks of those chemicals vary across Australia. As the Explanatory Memorandum states:

Under the current regulatory framework for environmental risk management of industrial chemicals, there is no mechanism to consistently implement the recommendations for the management of risks to the environment made by AICIS … in contrast to other frameworks for worker and public health and safety, such as the Standard for the Uniform Scheduling of Medicines and Poisons (also known as the Poisons Standard).

69. Minerals Council, Submission, op. cit., pp. 1-2. 70. Explanatory Memorandum, ICEMR Bill, op. cit., p. 4. 71. Explanatory Memorandum, Charges Bills, op. cit., p. 2 and Explanatory Memorandum, Industrial Chemicals Legislation Amendment Bill 2020 (Amendment Bill), p. 2.

72. The Statement of Compatibility with Human Rights can be found at pages 1 to 7 of the Attachment to the Explanatory Memorandum to the ICEMR Bill, pages 1 to 2 of the Attachment to the Explanatory Memorandum to the Amendment Bill and pages 11-13 of the Explanatory Memorandum to the Charges Bills.

73. Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, 15, 2020, 9 December 2020, p. 6. 74. This section primarily outlines the key issues and provisions in relation to ICEMR Bill, and unless otherwise specified clause numbers refer to relevant clauses in the ICEMR Bill. Please note that the provisions of the Amendment Bill are not discussed as they are technical and/or consequential amendments which are adequately explained in the Explanatory Memorandum to

the Amendment Bill. 75. Explanatory Note, op. cit., p. 2.

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Without a national approach, inconsistent implementation of recommendations for managing the risks from the use of industrial chemicals may lead to uncertainty, increased costs for business, and inadequate environmental protection.76

The ICEMR Bill aims to address these issues and ‘fill an important regulatory gap’ by establishing a new national standard for the environmental risk management of industrial chemicals.77 As discussed earlier in this Digest, some stakeholders, such as Chemistry Australia, have highlighted that whether the scheme meets its aims will depend on adoption and implementation by state and territory governments.78 Chemistry Australia considered that without uniform adoption, there is a risk that the scheme will introduce an additional layer of regulatory burden and cost to industry.79

Objects Clause 3 sets out the objects of the proposed ICEMR Act as:

• to give effect to an intergovernmental scheme involving the Commonwealth and the states and territories relating to the establishment of nationally consistent standards to minimise risks to the environment from industrial chemicals

• to provide for the Commonwealth Government to establish a national register of scheduling decisions for relevant industrial chemicals

• to provide for the Register to operate as a national scheme, in that another law of the Commonwealth, or a law of a state or territory:

- may apply or adopt the Register (with or without modification) and - may make provision for, or in relation to, its implementation and enforcement, as so applied or adopted • to reflect, through scheduling decisions for relevant industrial chemicals included in the Register, the views of the Commonwealth on the controls, including risk management measures, that should be applied to those chemicals

• to regulate the conduct of the Commonwealth, and persons employed or engaged by the Commonwealth, in connection with the Register

• to contribute to meeting Australia’s international obligations in relation to industrial chemicals.80

Key definitions Clauses 7 and 8 provide definitions of key terms to be used in the proposed Act. Some of the key definitions include ‘industrial chemical’ and ‘industrial use’, which are defined by reference to their meaning in the Industrial Chemicals Act 2019.

Importantly, scheduling decisions under the proposed regime will only be able to be made for industrial chemicals, which means that only industrial chemicals will be included in the Industrial Chemicals Environmental Management Register (which is discussed further below).

76. Explanatory Memorandum, ICEMR Bill, p. 1. 77. S Ley, ‘Second reading speech: Industrial Chemicals Environmental Management (Register) Bill 2020’, House of Representatives, Debates, 3 December 2020, p. 10439. 78. Chemistry Australia, Submission, op. cit., p. 2. 79. Ibid. 80. For further details of relevant international obligations, see Appendix F at pp. 73-78 of the Decision Regulation Impact

Statement attached to the Explanatory Memorandum.

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Industrial chemical Section 10 of the Industrial Chemicals Act defines an ‘industrial chemical’ as any of the following:

• a chemical element that has an industrial use

• a compound or complex of a chemical element that has an industrial use

• a UVCB substance that has an industrial use81

• a chemical released from an article where the article has an industrial use

• a naturally-occurring chemical that has an industrial use

• any other chemical or substance prescribed by the rules that has an industrial use

but not a chemical or substance that is prescribed by the rules as not being an industrial chemical.

Industrial use Subclause 8(2) clarifies that the proposed ICEMR Act will only apply to an industrial chemical to the extent that the industrial chemical is used, or proposed to be used, for an ‘industrial use’ within the meaning of the Industrial Chemicals Act. In other words, if an industrial chemical has both industrial uses and non-industrial uses, scheduling decisions will only be able to be made in respect of the industrial uses (or proposed industrial uses) of that chemical.

The term ‘industrial use’ is defined in section 9 of the Industrial Chemicals Act as a use other than (or in addition to) one of the following uses:

• use as an agricultural or a veterinary chemical product82 (within the meaning of the Agvet Code) or in the preparation of such a product

• use as a substance or mixture of substances83 (or in the preparation of such a substance or mixture of substances)

• use as a therapeutic good (within the meaning of the Therapeutic Goods Act) or in the preparation of such a good

• use as food intended for consumption by humans (or in the preparation of such food)

• use as feed intended for consumption by animals (or in the preparation of such feed)

• any use prescribed by the rules.

Industrial Chemicals Environmental Management Register Clause 22 of the Bill provides for the establishment of the Industrial Chemicals Environmental Management Register (the Register). Under subclause 22(1), the Register is established by the Commonwealth Minister for the Environment by a non-disallowable legislative instrument.84

The Explanatory Memorandum states that the Register is exempt from disallowance and sunsetting because the enabling legislation for the Register (that is, this Bill) facilitates the establishment or operation of an intergovernmental scheme involving the Commonwealth and

81. ‘UCVB substance’ is defined at section 9 of the Industrial Chemicals Act as being short for ‘unknown variable composition or biological substance’ and means a chemical of unknown or variable composition, a complex product of a chemical reaction, or biological material, other than a whole animal or a whole plant.

82. The definition refers to the Agricultural and Veterinary Chemicals Code Act 1994 (AgVet Code), which is part of a cooperative statutory scheme in place for the evaluation, registration and control of agricultural and veterinary chemical products: see further APVMA, ‘Legislative framework’, APVMA website, last updated 22 October 2019.

83. As mentioned in paragraph 5(4)(a) of the Agvet Code, which deals with substances or mixtures of substances prepared by a pharmacist or veterinary surgeon. 84. Note 2 to subclause 22(1) states that the Register will be exempt from disallowance and sunsetting provisions of the Legislation Act 2003 as a result of the operation of subsections 44(1) and 54(1) (respectively) of that Act.

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Industrial Chemicals Environmental Management (Register) Bill 2020 [and associated Bills] 15

one or more states and territories, and authorises the instrument to be made for the purposes of the scheme.85

As outlined earlier in this Digest, the Scrutiny of Bills Committee expressed concern that the Register will be set out in a non-disallowable legislative instrument given the Register’s significance to the operation of the proposed regime, and requested an explanation from the Minister in relation to this issue.

Subclause 22(2) provides that the Register may include explanatory information relating to the Register or a scheduling decision, or any other information specified in the rules. The Explanatory Memorandum suggests this might include additional information concerning an industrial chemical or its use, descriptions of the Schedules, relevant guidelines or management plans, or information to assist in the interpretation and implementation of the risk management measures specified for a particular industrial chemical.86

The Explanatory Memorandum anticipates that there will be seven schedules of the Register, ‘reflecting increasing risk of harm to the environment’ (see Figure 1 below).87

Figure 1: proposed structure of the national standard

Source: DAWE, Submission to the Senate Standing Committee on Environment and Communications, Inquiry into the Industrial Chemicals Environmental Management (Register) Bills 2020, [Submission no. 2], 21 January 2021, p. 6.

The intention is that industrial chemicals will ‘be listed by reference to a particular end use’, since ‘it will generally be the end use of an industrial chemical that determines the level of concern that chemical poses to the environment, and that has been assessed in a risk assessment’.88 As such:

Which Schedule is appropriate for a particular industrial chemical or use of that chemical will depend on the risk characteristics of that chemical. This would be determined by reference to both the inherent

85. Explanatory Memorandum, ICEMR Bill, op. cit., pp. 26-27. 86. Explanatory Memorandum, ICEMR Bill, op. cit., p. 27. 87. Explanatory Memorandum, ICEMR Bill, op. cit., p. 26. 88. Explanatory Memorandum, ICEMR Bill, op. cit., pp. 12-13.

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characteristics of the chemical and its proposed use. This means that different end uses of the same chemical could be listed in different Schedules of the Register … because different end uses of an industrial chemical may have different levels of environmental concern associated with them.89

Subclause 22(4) provides that the Registrar does not, of itself, create prohibitions, restrictions or other obligations that are enforceable in judicial or other proceedings. As the Explanatory Memorandum notes:

… it is intended that each State and Territory (and the Commonwealth) will, under their own laws, adopt or apply the Register and thereby be responsible for implementing and enforcing the contents of the scheduling decisions listed in the Register in their jurisdiction. In other words, the prohibitions and restrictions that are listed in the Register for an industrial chemical will not be enforceable except as they are adopted or applied in the relevant jurisdiction.90

In turn:

It is intended that adoption of the Register by all jurisdictions will deliver greater certainty and consistency in regulation for industrial chemical users and introducers in Australia. It will also allow for better protection of the environment through improved management of the environmental risks posed by industrial chemicals.91

The Department’s submission to the Senate Committee inquiry states that the ‘Australian Government is committed to implementing the Register in areas of Commonwealth responsibility’.92 This will include developing ‘new legislation for the use, handling and disposal of chemicals on Commonwealth land, as well as improving controls on introduction of high concern chemicals into Australia’.93

As discussed in the ‘position of major interest groups’ section of this Digest, Chemistry Australia was concerned that the success of the scheme is ‘entirely dependent’ on uniform adoption and implementation by state and territory governments.94 Chemistry Australia recommended that a provision be incorporated to delay commencement of the scheme until implementing legislation has been passed by every state and territory. It suggested this would ‘encourage all states and territories to promptly enact legislation to implement the scheme and avoid a situation under which different rules might continue to apply across jurisdictions for some time’.95

Scheduling decisions Subclause 11(1) provides that the Minister may make one or more scheduling decisions for a relevant industrial chemical.96 The Minister must ensure that the scheduling decision is recorded in the Register (subclause 11(2)).

A ‘scheduling decision’ is defined in subclause 11(3) as any of the following:

• a decision to list the chemical in a particular Schedule or Schedules of the Register

• a decision to specify any one or more of the following for a chemical listed on the Register:

89. Ibid. 90. Ibid., p. 27. 91. Ibid. 92. DAWE, Submission, op. cit., p. 10. 93. Ibid. 94. Chemistry Australia, Submission, op. cit., p. 2. 95. Ibid. 96. ‘Relevant industrial chemical’ is defined in proposed clause 7 as a particular industrial chemical or a particular class of

industrial chemicals.

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- that the export, import or manufacture of the chemical is prohibited, or restricted, in all circumstances or in specified circumstances - that all or any end uses for the chemical are prohibited, or restricted, in all circumstances or in specified circumstances - one or more end uses for the chemical - one or more risk management measures for the chemical or for a specified end use of the

chemical or • a decision relating to the chemical of a kind specified in the rules.

The Explanatory Memorandum states:

Industrial chemicals vary widely in their properties and the ways in which they are used. It is therefore appropriate to have a selection of management options available to the Minister in making a scheduling decision. Listing a chemical or end use of a chemical in a Schedule of the Register will indicate the level of concern it poses to the environment. In many cases, few or no risk management measures will be necessary to manage the risks posed by a particular chemical. In some cases, it will be possible to manage the risks posed by certain end uses of a chemical, but not others. When there are significant risks posed by a particular chemical, regardless of end use, and it is not possible to manage those risks, it may be necessary to ban all end uses of the chemical, as well as its import and manufacture. In some instances, such as to comply with Australia’s international obligations, it may also be necessary to ban the export of certain chemicals.97

The Minister may list an industrial chemical in a Schedule of the Register even if it is already included in a class of industrial chemicals listed in that Schedule or a different Schedule of the Register.98 The Explanatory Memorandum states ‘this is to ensure that chemicals can be listed in different Schedules (or the same Schedule) of the Register at the same time by reference to different end uses of that chemical’.99

Subclause 11(6) aims to clarify the scope of a risk management measure that can be specified by the Minister in a scheduling decision. A risk management measure may:

• prohibit or restrict particular conduct or things in all circumstances or in specified circumstances

• require particular conduct or things in all circumstances or in specified circumstances

• impose an obligation in relation to particular conduct or things in all circumstances or in specified circumstances or

• apply from or until a particular date or for a particular period.

As the Explanatory Memorandum notes:

Risk management measures aim to prevent harm to the environment from the use or disposal of an industrial chemical. For example, risk management measures may relate to the protection of land or the marine environment, the protection of surface or ground water, the protection of biodiversity, the storage, handling and containment of the chemical, or the treatment or disposal of the chemical.100

The Minister may also vary or revoke a scheduling decision for a relevant industrial chemical. That variation or revocation must be recorded in the Register.101

97. Explanatory Memorandum, ICEMR Bill, p. 12. 98. ICEMR Bill, subclause 11(5). 99. Explanatory Memorandum, ICEMR Bill, p. 15. 100. Ibid., p. 13. 101. ICEMR Bill, clause 12.

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Considerations for scheduling decisions Clause 15 sets out the mandatory considerations for the Minister when deciding whether to make, vary or revoke a scheduling decision. The Minister must have regard to the following matters:

• the most recent relevant Commonwealth risk assessment102 for the industrial chemical (if any)

• any relevant risks that the chemical, or end use of the chemical, poses (or may pose) to the environment and how any such risks may be minimised

• any relevant advice given to the Minister by the Advisory Committee

• any relevant international obligations Australia has under an international agreement that is specified in the rules103

• any relevant submissions provided as part of public consultation on the proposed scheduling decision and any relevant information given to the Minister under clauses 19 or 20 (discussed below) and

• any other matters that are specified in the rules.

These mandatory considerations do not apply to a variation of a scheduling decision that is of a ‘minor nature’ (subclause 15(2)). Subclauses 15(3) and (4) provide that the following are taken to be variations of a minor nature:

• a variation that does no more than change the way the chemical is identified and

• a variation that specifies an end use for a chemical instead of a generalised end use.

The discretionary matters that the Minister may have regard to when deciding whether to make, vary or revoke a scheduling decision are set out in clause 16 as follows:

• earlier Commonwealth risk assessments in relation to the chemical104

• a risk assessment in relation to the chemical undertaken by a Commonwealth entity (but that does not fall within the definition of Commonwealth risk assessment in clause 7)

• a risk assessment in relation to the chemical undertaken by a state or territory government body, a foreign government body or a public international organisation

• any environmental, social or economic matter that the Minister considers relevant

• any relevant information given to the Minister by an ‘entrusted IC person’105 and

• any other matters that are specified in the rules or that the Minister considers relevant.

Decision-making principles Clause 13 requires the Minister to comply with the decision-making principles when making, varying or revoking a scheduling decision and provides that the Minister cannot make a scheduling decision unless the decision-making principles are in force. The Minister may make, vary or revoke these decision-making principles by legislative instrument under clause 23. The Department’s submission to the Senate Committee inquiry further explains:

102. ‘Commonwealth risk assessment’ is defined in proposed clause 7 of the ICEMR Bill to mean a report prepared under various sections of the now repealed Industrial Chemicals (Notification and Assessment) Act 1989; an assessment statement or evaluation statement (within the meaning of the Industrial Chemicals Act); or a risk assessment as specified in the rules (made under proposed clause 76).

103. For further details of some potentially relevant international obligations, see Appendix F at pp. 73-78 of the Decision Regulation Impact Statement attached to the Explanatory Memorandum. 104. As noted above, ‘Commonwealth risk assessment’ is defined in proposed clause 7 of the ICEMR Bill. 105. Entrusted IC person means an entrusted person under subsection 115(2) of the Industrial Chemicals Act, which includes, for

example, the Executive Director of the AICIS.

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The Principles will set out criteria for deciding which Schedule of the Register an industrial chemical (or particular use of an industrial chemical) should be assigned to, according to its level of concern to the environment. These criteria are called risk characteristics.106

According to the Department, the principles are expected to be made ‘shortly after passage of the Bill’.107 Draft principles have already been published on the Department’s website.108 Clause 24 also requires a mandatory 20 business day public consultation period before the Minister makes, varies or revokes the principles. Clause 25 requires the Minister to consult with state and territory Environment Ministers before making, varying or revoking the decision-making principles.109

The notes to subclauses 23(1) and (2) of the Bill state that the decision-making principles will be exempt from disallowance and sunsetting provisions of the Legislation Act 2003. The Department’s submission to the Senate Committee inquiry explains:

The Principles represent a key component of the National Standard and will be developed in collaboration with the states and territories, and consultation with stakeholders. Were they to be subject to disallowance or sunsetting, the collaborative interjurisdictional effort that went into the development of the National Standard could be undermined. Subsections 44(1) and 54(1) of the Legislation Act ensure the integrity of these interjurisdictional schemes is maintained.110

However, as outlined earlier in this Digest, the Scrutiny of Bills Committee expressed concern that the principles will be set out in non-disallowable legislative instrument, particularly given their significance to the operation of the proposed regime.

Public consultation before scheduling decisions Clause 17 requires the Minister to undertake public consultation before making, varying or revoking a scheduling decision. The Minister must publish a notice on the Environment Department’s website inviting submissions on the proposed scheduling decision (or the proposed variation or revocation). The timeframe to provide submissions to the Minister must be no less than 20 business days.111

Under subclause 17(3), public consultation is not required for a minor variation of a scheduling decision. Subclauses 17(4) and (5) provide that the following are taken to be minor variations:

• a variation that does no more than change the way the chemical is identified and

• a variation that specifies an end use for a chemical instead of a generalised end use.

The Explanatory Memorandum suggests this would, for example, allow variations to correct a typographical error or substitute the proper name of the chemical without having to undertake public consultation again:

This is considered appropriate because such variations would not affect the substance of the original scheduling decision.112

Clause 18 provides an exception to this public consultation requirement if an assessment certificate has been issued in relation to a particular industrial chemical, although the Minister

106. DAWE, Submission, op. cit., p. 7. 107. Ibid. 108. DAWE, ‘National standard consultation and Bill’, DAWE website, n.d. 109. See also Explanatory Memorandum, ICEMR Bill, p. 16. and DAWE, Submission, op. cit., p. 9. 110. DAWE, Submission, op. cit., p. 9. 111. ICEMR Bill, subclause 17(2). 112. Explanatory Memorandum, ICEMR Bill, p. 23.

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Industrial Chemicals Environmental Management (Register) Bill 2020 [and associated Bills] 20

may still consult the holder of the assessment certificate and the public if appropriate.113 Assessment certificates are issued under Industrial Chemicals Act:114

An assessment certificate issued under the Industrial Chemicals Act 2019 relates to the proposed introduction to Australia (by import or manufacture) of a new industrial chemical or a new use of an industrial chemical. The proposed new chemical or use will have already been the subject of consultation under that Act and further public consultation will not generally be considered useful. A newly introduced chemical or use may also be the subject of confidential business information protections, making public consultation inappropriate. However, targeted consultation with the holder of the assessment certificate (the proposed introducer) may still be considered appropriate or necessary in the particular circumstances.115

Under clause 19, the Minister may, by written notice, request information that is relevant to a scheduling decision from a specific person, such as the introducer of an industrial chemical, a relevant industry body, a Commonwealth body or Department or an independent expert.116

Clause 20 also provides a mechanism for the Minister to make a public call for information, via the Environment Department’s website, relevant to the making, varying or revoking of a scheduling decision.

As the Explanatory Memorandum notes, clauses 19 and 20 are not intended to be coercive powers, and the Minister would not be able to compel a person to provide information in response to a request or invitation made under subclauses 19(1) and 20(1).117

Under clause 21, the Commonwealth Minister may (but is not required to) consult with state or territory environment ministers before making, varying or revoking a scheduling decision.

Advisory Committee Clause 27 in Part 3 of the ICEMR Bill establishes the Advisory Committee on the Environmental Management of Industrial Chemicals to provide independent expert advice to the Minister.118

Clause 28 provides that the Advisory Committee’s functions include advising the Minister about matters that are referred to it by the Minister and that relate to the making, variation or revocation of a scheduling decision for a relevant industrial chemical, the Register or the decision-making principles. Other functions can be conferred on the Advisory Committee by the rules made under clause 76 (as discussed later in this Digest).

Clause 29 provides that the Advisory Committee consists of a Chair and at least three, but not more than eight, other members. Advisory Committee members are appointed by the Minister under clause 30. A person is not eligible to be appointed as an Advisory Committee member unless the Minister is satisfied that the person has substantial experience or knowledge, and significant standing, in certain fields as specified in subclause 30(3), such as industrial chemistry, ecotoxicology, environmental risk management, environmental health, human toxicology, applied socio-economic analysis, ecology, or chemical or environmental regulation.

113. ICEMR Bill, subclause 18(3). 114. See the definition of ‘assessment certificate’ in clause 7 of the ICEMR Bill. 115. Explanatory Memorandum, ICEMR Bill, p. 24. 116. Ibid. 117. Ibid. 118. Ibid., p. 32.

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Rules Clause 76 in Part 6 of the ICEMR Bill enables the Minister to make rules prescribing matters to support the proposed ICEMR Act. Several clauses in the Bill provide for matters to be prescribed in the rules including:

• other risk assessments that will be characterised as Commonwealth risk assessments (under the definition of Commonwealth risk assessment in clause 7)

• international agreements under which Australia has obligations in relation to industrial chemicals. The Minister must have regard to any international agreement prescribed in the rules when making, varying or revoking a scheduling decision (clause 15)

• other matters the Minister must or may have regard to when making, varying or revoking a scheduling decision (clauses 15 and 16)

• additional functions of the Advisory Committee (clause 28) or the AICIS Executive Director (clause 72) and

• matters relating to collecting and recovering the scheduling charge (clause 69).

The rules would be a legislative instrument for the purposes of the Legislation Act, but would not be disallowable or subject to sunsetting.119 The Explanatory Memorandum states:

This is because the enabling legislation for the rules (being this Bill) facilitates the establishment or operation of an intergovernmental scheme involving the Commonwealth and one or more states, and authorises the instrument to be made for the purposes of the scheme.120

As outlined earlier in this Digest, the Senate Scrutiny of Bills Committee raised concerns that this means that significant matters relating to the operation of the regime are being left to delegated legislation which is exempt from parliamentary disallowance and sunsetting.

Cost recovery The ICEMR Bill, along with the Charges Bills, establish cost recovery arrangements for the proposed scheme. Part 5 of the ICEMR Bill sets out provisions relating to the scheduling charge, including who is liable for the charge (clause 67), when the charge is due for payment (clause 68) and enabling rules to be made for the collection and recovery of the charge (clause 69).

Clause 67 provides that that a registered introducer for a registration year would be liable to pay the scheduling charge. A registered introducer for a registration year means a person registered under section 17 of the Industrial Chemicals Act.121 As the Explanatory Memorandum states:

In practice, this will mean that a person who is liable under the Industrial Chemicals Act 2019 to pay a registration charge in respect of the introduction of a new industrial chemical (or a new use of an existing industrial chemical) would also be liable to pay a scheduling charge under this Bill. This is appropriate as it recognises that there will be no separate application to assess a new industrial chemical (or a new use of an existing industrial chemical) under the Bill for the purposes of making a scheduling decision. Rather, it is intended that an application for registration of a new industrial chemical (or a new use of an existing industrial chemical) under the Industrial Chemicals Act 2019 will be a trigger for the Minister to assess the environmental risks of the proposed chemical or use for the purposes of making one or more scheduling decisions under the Bill.122

119. The note following subclause 76(1) explains that, despite being a legislative instrument, the rules would be exempt from disallowance and sunsetting due to the operation of subsections 44(1) and 54(1) (respectively) of the Legislation Act 2003. 120. Explanatory Memorandum, ICEMR Bill, p. 61. 121. ICEMR Bill, clause 7. 122. Explanatory Memorandum, ICEMR Bill, p. 56.

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The scheduling charge is then imposed under the Charges Bills.123 The Charges Bills enable the amount of charge payable to be prescribed in regulations.124 The definition of ‘amount’ enables the charge to be nil.125 The Explanatory Memorandum to the ICEMR Bill states:

Consistent with the Australian Government Charging Framework, the amount of the scheduling charge imposed under the relevant charges Bills would be determined through a Cost Recovery Implementation Statement. The amount will also be required to recover no more than the Commonwealth’s likely costs and, as such, will be limited in amount to the approximate cost of services rendered by the Commonwealth.126

As discussed earlier in this Digest, the Senate Scrutiny of Bills Committee raised some concerns in relation to the Charges Bills. Similarly, as noted in the ‘position of major interest groups’ section earlier in this Digest, several industry groups raised concerns about the proposed cost recovery arrangements. However, law firm Clayton Utz has suggested that, ‘while adapting to the new scheme may require up-front costs to a business, the single national register is intended to lead to significant reductions in compliance costs in the long term’.127

Confidentiality and information sharing Part 4 of the ICEMR Bill contains provisions dealing with confidential information, the use and disclosure of protected information and other information sharing matters. These provisions are adequately explained in the Explanatory Memorandum to the ICEMR Bill. According to the Department’s submission to the Senate Committee inquiry:

These provisions allow the Minister to decide whether to publicly release information based on a weighing of the commercial interests of companies in keeping specific information confidential against the public interest in information being made available. The Bill also ensures that companies are consulted on proposed decisions to release information and have rights to reconsideration and review of decisions.128

123. See clause 7 of each Charges Bill. As noted earlier, the three Charges Bills are separate due to the constitutional requirement for taxation, duties of excise and duties of customs to be dealt with in Bills that only include that individual, respective type of charge: Australian Constitution, section 55.

124. See clause 8 of each Charges Bill. 125. See clause 6 of each Charges Bill. 126. Explanatory Memorandum, ICEMR Bill, p. 57. 127. C Smith, L Smith and R McKinlay, ‘Closing in on a National Standard for the Environmental Risks of Industrial Chemicals’,

Clayton Utz website, 23 December 2020. 128. DAWE, Submission, op. cit., p. 9.

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