The chemicals industry in Australia

Chemicals are widely used in the Australian community with chemicals present in an extensive range of products including agricultural pesticides, household cleaners, cosmetics, petroleum and coal products and pharmaceutical products.

The chemicals industry directly employs over 53,000 people and represents between nine and ten percent of total Australian manufacturing activity1. According to the Plastics and Chemicals Industries Association (PACIA), the annual turnover in this industry sector is approximately $33.6 billion in Australia. In a global context, Australia represents approximately 0.6% of global sales of chemicals and about 0.85% of global trade in chemicals (source: PACIA). In 2010-11, a total of 4,759 businesses registered with the National Industrial Chemicals Notification and Assessment Scheme (NICNAS) as manufacturers or importers of industrial chemicals in Australia.

Industrial chemicals have a diverse range of uses in society including as ingredients, additives, plastics, rubbers, solvents, foams and adhesives that appear in furniture, automotive components, paints, textiles, packaging, medical ware, cosmetics and building and construction products.

Given the diversity and reach of industrial chemicals in our society, and the associated risks to human health and the environment, there is a role for government intervention in the regulation of industrial chemicals. The focus of this Discussion Paper is the nature of that regulation and the potential to improve the efficiency and effectiveness of NICNAS.

Chemicals regulation in Australia

The Australian chemicals institutional and regulatory arrangements are complex, involving some 140 pieces of legislation and multiple policy departments, assessment agencies, and regulatory decision-makers at the Commonwealth and state and territory and local levels of government.

In general:
  • the policy settings for government regulation of the chemicals industry are determined by ministerial councils
  • the Commonwealth undertakes most hazard and risk assessment and implements international agreements
  • the states and territories typically focus on risk management and control of use. The regulatory regimes cover: public health; work health and safety; the transport of dangerous goods; disposal; and environment protection
  • local government involvement varies considerably, but is usually limited to planning and waste disposal issues.

Australian Government chemicals assessment and registration schemes

There are four chemical assessment and registration schemes which are intended to operate in a complementary manner at the national level:
  • industrial chemicals are notified to, and assessed by, the National Industrial Chemicals Notification and Assessment Scheme (NICNAS)
  • pesticides and veterinary medicines are regulated by the Australian Pesticides and Veterinary Medicines Authority (APVMA)
  • therapeutic goods are regulated by the Therapeutic Goods Administration (TGA)
  • the use of chemicals in food and food additives is subject to standards set by Food Standards Australia New Zealand (FSANZ) and enforced under State/Territory food laws.

National Industrial Chemical Notification and Assessment Scheme (NICNAS)

NICNAS undertakes evidence-based assessments of risk to public health, occupation health and safety and the environment of certain industrial chemicals.

NICNAS assessments may result in the issuing of an assessment certificate or permit under the Industrial Chemicals (Notification and Assessment) Act 1989 (ICNA Act) which allows the introduction of a new industrial chemical into Australia. In addition, a new chemical may also be introduced under one of the exemptions for low risk chemicals outlined in the ICNA Act.

NICNAS assessments certificates make risk management recommendations to Commonwealth, State, Territory and local government agencies. These risk managers are then responsible for considering NICNAS recommendations and determining any necessary risk management conditions to control the use, release and disposal of industrial chemicals.

NICNAS has some risk management responsibilities, implemented through post-market monitoring of exemptions, conditions under permits and conditions on AICS.

The current review of NICNAS

In September 2011, the Australian Government announced a review of NICNAS. The purpose of the review is to examine the role of NICNAS within the broader institutional and regulatory framework for chemicals regulation.

The NICNAS review is being undertaken as a Better Regulation Ministerial Partnership between the Minister for Finance and Deregulation and the Minister for Health. The Australian Government Department of Health and Ageing (DoHA) and the Department of Finance and Deregulation (DoFD) are undertaking the review to inform the Partnership.

The review will investigate how the regulatory settings may be improved to enhance both the competitiveness of the Australian chemical industry and public health and environmental outcomes. The review will include, but is not limited to, assessing and making recommendations in relation to:
  • the role and functions of NICNAS as set out in the ICNA Act and the extent to which they adequately reflect stakeholder expectations and international best practice, having regard to the broader context of chemicals regulation in Australia
  • the governance and consultation arrangements of NICNAS and the extent to which they support the effective delivery of NICNAS’ functions
  • the efficiency and effectiveness of NICNAS’ operating arrangements and business processes, with particular regard to the protection of human and environmental health, the management of risk, and compliance costs for business
  • any implications for the resourcing of functions currently cost recovered, should the review recommend changed responsibilities.
The review will have particular regard to the recommendations of the Productivity Commission Research Report: Chemicals and Plastics Regulation, July 2008 and relevant commitments made, and reforms being progressed, under the Council of Australian Governments’ Seamless National Economy National Partnership Agreement, 2008.

As the review focuses specifically on NICNAS and the assessment and regulation of industrial chemicals, this review will not address the institutional and regulatory arrangements for chemicals more broadly.Top of Page

Inputs into the review

To date the review has been informed by:
  • submissions made by interested stakeholders. Between 1 November and 14 December 2011, written submissions were sought from stakeholders. A total of 21 submissions were received. Submissions are available on the DoHA website.
  • an internal review of NICNAS’ arrangements, functions and processes which was undertaken to inform this Discussion Paper
  • discussions with NICNAS and other Commonwealth agencies.
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1Department of Innovation, Industry, Science, Research and Tertiary Education