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

Part 7 - Post Market Monitoring and Enforcement

Page last updated: 30 March 2012

The current situation

For chemicals that have been previously assessed by NICNAS, the ICNA Act imposes certain post-market obligations on introducers. For example:
  • introducers are required to notify significant changes in circumstances of the use of an assessed chemical and any adverse health and environment impacts (known as secondary notification)
  • NICNAS has the power to require annual reports on adverse effects and/or volumes for chemicals introduced under NICNAS exemptions and permits and certain self-assessment certificates.
However, most of the 39,000 chemicals on AICS have not been assessed by NICNAS for their health and environmental impacts. This means that the post-market obligations described above, do not apply in these circumstances and there is no legal mechanism for NICNAS to be advised of adverse effects arising from their use.

In terms of NICNAS’ overall efforts in relation to monitoring and enforcement activity:
  • the primary focus of NICNAS’ compliance and enforcement program is administering the company registration process which accounts for approximately 60% of compliance program resources
  • in 2010-11 NICNAS also undertook 126 site visits, conducted 642 desk audits and opened 40 new compliance cases. Compliance activities included action on reports of restricted ingredients in cosmetics, use of exemptions for chemicals that do not meet the exemption criteria, and companies not meeting registration requirements. Investigations led to eight new companies being registered, notification of three new chemicals and one company ceasing introduction of a chemical.

The problem

Four main problems exist in relation to post-market monitoring and enforcement:
  • for those chemicals that have been assessed and are subject to secondary notification requirements, there are two main problems:
    • the circumstances in which secondary notification is required are not clear. This is because currently AICS does not list the function or use of the chemical that was subject to the original assessment by NICNAS (nor is the assessment report linked to the AICS entry). This means that it can be difficult for introducers to know whether secondary notification obligations apply to them
    • the assessment process (following secondary notification) can be unnecessarily cumbersome
  • for those chemicals that have not been assessed by NICNAS, there is no effective system of adverse effects reporting as there are limited secondary notification requirements
  • NICNAS lacks a modern graduated compliance regime, as compared to those utilised by other regulators. In many cases, the current legislation provides no intermediate step between the extremes of warning letters or minor fines and imprisonment.

The objectives of any reform

The objectives in relation to post-market monitoring and enforcement are to:
  • ensure that NICNAS has access to adequate post-market information to enable it to properly conduct risk assessments in relation to existing chemicals. This must be balanced with the need to ensure that unnecessary and costly reporting obligations are not imposed on industry
  • ensure that NICNAS has the necessary tools to properly perform its monitoring and enforcement responsibilities. If NICNAS continues to have a regulatory role then it is appropriate for NICNAS to have a comprehensive, graduated and contemporary compliance regime. This aims to enable NICNAS to better manage compliance by tailoring penalty provisions to the degree and seriousness of the non-compliance. It also has the potential to facilitate a level playing field for introducers.
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Possible options for reform

The options below could be implemented as a package, individually or as a combination of options.

D1. Streamline the secondary notification process for existing chemicals. Consistent with the possible changes described at C2, the ICNA Act could be amended such that:
  • NICNAS re-assessment following secondary notification could either occur using a streamlined approach or through the more comprehensive PEC-style approach, depending on the nature of the hazards and risks
  • AICS could list the function or use of the chemical related to the original assessment. This gives clarity to the existing secondary notification obligations for significant variations to use.
D2. Supplement existing secondary notification requirements with a more comprehensive system of adverse effects reporting for new and existing industrial chemicals. Such a system would require introducers to mandatorily report adverse effects but would also enable anyone else, including users and risk managers, to report adverse effects to NICNAS. This could be similar to the APVMA system for adverse experience reporting.

D3. Introduce into the ICNA Act a comprehensive, graduated and contemporary compliance regime to enable NICNAS to better manage compliance by tailoring penalty provisions to the degree and seriousness of the non-compliance. For example, consideration could be given to the introduction of compliance tools such as assisted resolution, infringement notices and civil penalties.

Input sought from stakeholders

What are the strengths and weaknesses of the options?

Does an adverse effects reporting system address the problems and objectives identified?

What would be the impact of an adverse effects reporting system on introducers?

Are there other ways in which NICNAS’ post-market monitoring and enforcement capacity could be improved?