Discussion Paper - Review of the National Industrial Chemicals Notification and Assessment Scheme: June 2012

Attachment B: Productivity Commission Report and Applicable Reform Options

Page last updated: 30 March 2012

Productivity Commission Research Report: Chemicals and Plastics Regulation, July 2008

Council of Australian Governments’ Agreed ResponseApplicable Reform Option

Recommendation 4.1


The Australian Government should impose a statutory obligation on NICNAS to ensure that:
  • the costs of chemical assessments are commensurate with the risks posed by the chemicals concerned
  • its assessment priorities are directed to the most efficient management of the aggregate risk of all industrial chemicals.
COAG welcomes the response of the Commonwealth as set out below.

Consistent with the existing legislative objective of National Industrial Chemicals Notification and Assessment Scheme (NICNAS), the Commonwealth Government agrees that assessment effort and priorities should be risk-based. New chemical assessment categories and exemptions under the NICNAS are set on a risk-based gradient. Recent new chemical reforms have introduced additional assessment options for low risk chemicals and this reform activity will continue.

The same general approach is used for existing industrial chemicals assessments, where the assessment effort can be directed to areas of potential high risk.

The NICNAS Existing Chemical Program Review recommended a systematic risk-based approach to existing chemicals assessments. Implementation is underway. To assist in directing and clearly communicating the objective that assessment effort and priorities should be risk-based, the Commonwealth will explore the potential for embedding some guiding principles in legislation and guidance.

Resource and legislative implications require further consideration in the development of an implementation plan and through the Commonwealth’s budget processes.
B1-5, C1-2, C5, D1, F1-2, and H2
Recommendation 4.2
The Australian Government should establish a technical advisory committee within NICNAS, as a statutory requirement.
COAG welcomes the response of the Commonwealth as set out below.

The Commonwealth Government supports the recommendation. The impact on governance arrangements, resources and legislative implications require analysis as part of the development of an implementation plan and the Commonwealth's budget processes.
J1
Recommendation 4.3
The Australian Government should generally limit the role of NICNAS to the scientific assessment of the hazards and risks of industrial chemicals. The power to annotate the Australian Inventory of Chemical Substances to ban or phase out chemicals, and the responsibilities for administering the Cosmetics Standard 2007, and for implementing the Rotterdam Convention, should be removed from NICNAS.
COAG welcomes the response of the Commonwealth as set out below.

The Commonwealth Government agrees with the intention that the primary role of the National Industrial Chemicals Notification and Assessment Scheme's (NICNAS) should be as a scientific risk assessment body for industrial chemicals, noting that any change to current arrangements should not introduce regulatory gaps that would weaken health and environmental protection.

In light of the Productivity Commission’s preferred governance framework, the Commonwealth Government supports further efforts to clarify the role of NICNAS and ensure that the institutional location of standard setting and risk management powers provide a cohesive and integrated industrial chemicals framework across Commonwealth and state and territory regulatory authorities.

In this regard, reducing the power of NICNAS to annotate the Australian Inventory of Chemical Substances requires further consideration to ensure that the existing levels of human health and environmental protection are maintained and that equivalent powers are established in another national body.

The Commonwealth Government supports the transfer of responsibility for implementing the Rotterdam Convention from NICNAS to the Department of the Environment, Water, Heritage and the Arts (DEWHA).

The transfer of responsibility for the Cosmetics Standard is dealt with under Recommendation 5.5.
A1-3, B1-5, C4, D1, G1, G2, H1, I1, I2 and K1
Recommendation 4.4
All relevant national standard setting bodies should be required to respond to NICNAS recommendations within defined time limits. NICNAS should maintain a public schedule of all responses.
COAG welcomes the response of the Commonwealth as set out below.

The Commonwealth Government agrees with the recommendation. Requirements for national standard setting bodies to consider and respond to National Industrial Chemicals Notification and Assessment Scheme recommendations should be underpinned by formal arrangements such as Memoranda of Understanding or legislation. Resource and legislative implications require further consideration in the development of an implementation plan and through the Commonwealth’s budget processes.
A1, A3, B4-5 and C4
Recommendation 4.5
The Australian Government should introduce a statutory timeframe for the technical screening of applications by NICNAS.
COAG welcomes the response of the Commonwealth as set out below.

The Commonwealth Government supports the establishment of statutory timeframes for screening of applications. Resource and legislative implications require further consideration in the development of an implementation plan and through the Commonwealth’s budget processes.
B3
Recommendation 5.4
The ACCC and NICNAS should negotiate formal arrangements for cooperation on issues regarding chemicals in consumer articles. These arrangements should include the establishment of a more systematic research program to identify and deal with the risks of chemicals in consumer articles.
COAG welcomes the response of the Commonwealth as set out below.

The Commonwealth supports the recommendation. However, the establishment of a systematic research program to identify and deal with risks of chemicals in consumer articles has resource and legislative implications for both National Industrial Chemicals Notification and Assessment Scheme (NICNAS) and the Australian Competition and Consumer Commission (ACCC) that require further consideration through the Commonwealth's budget processes.
A1, A3 and G1-2
Recommendation 5.5
The Australian Government should transfer responsibility for the administration and enforcement of the Cosmetics Standard 2007 (Cwlth) from NICNAS to the ACCC.
COAG welcomes the response of the Commonwealth as set out below:

The Commonwealth supports the intent to separate the assessment and enforcement functions associated with the Cosmetics Standard. Resource and legislative implications require consideration in the development of an implementation plan and through the Commonwealth's budget processes.

Consistent with the principles of the proposed new governance framework, the Commonwealth will explore a variation to the Productivity Commission’s recommendation that provides for separation between assessment, standard setting and enforcement.
H1