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

Part 8 - Other Reforms Affecting both New and Existing Chemicals

Page last updated: 30 March 2012

This Part of the Discussion Paper details those areas of concern, and options for potential reform, which are common to both new and existing chemicals.

Release of information and confidential commercial information

Currently under the ICNA Act an introducer can request that certain information be kept commercial in confidence. This can include, for example, the name of the chemical, its function and structure.

The capacity to protect confidential commercial information is an important part of the regulatory scheme that should be retained. However, there are circumstances in which the protection of such information compromises the capacity of regulators to perform their functions and for introducers to understand their obligations.

For example, currently NICNAS does not release information obtained for the purposes of the ICNA Act (including confidential commercial information) to other risk managers, such as information relating to individual companies. This adversely impacts the capacity of risk managers to implement risk management measures or to monitor compliance with existing regulatory requirements (such as labelling requirements under work health and safety legislation). This problem is compounded where the name of the chemical is also subject to confidentiality.

Further, if option D1 where adopted, then it would seem logical that the name of the chemical be known, as far as possible, such that the function and use related to the original assessment can be determined (particularly as at the time of listing a chemical on AICS anyone can introduce the chemical). A more limited form of confidentially could be made available, aligning with contemporary provisions overseas (e.g. EU) and domestic legislation (e.g. work health and safety legislation).

Possible option(s) for reform:

E1. Amend the ICNA Act to enable release of information (including confidential commercial information) to other Commonwealth and state and territory agencies where it is necessary for them to fulfil their regulatory responsibilities. For example: to undertake an assessment of risk, to consider risk management strategies in relation to industrial chemicals or to monitor compliance with regulatory requirements.

E2. Amend the ICNA Act such that at the time of listing on AICS, the chemical name would be subject to contemporary confidentiality criteria to increase transparency (e.g. align with work health and safety confidentiality arrangements relating to chemical name).

Input sought from stakeholders

How would the release of information to other relevant government agencies impact introducers?

What are some of the implementation issues that would require consideration?

What would be the impact of these options?

Are there any other ways in which the identified problems can be addressed?

Use of foreign schemes/international assessments

Currently NICNAS supports international harmonisation initiatives and strategies to enhance the use of international assessments. NICNAS regularly participates (along with other Commonwealth agencies) in international chemical forums such as the OECD chemicals program and has formal Bilateral Arrangements with counterparts in Canada, the European Union, New Zealand and the United States.

Further, NICNAS currently uses international chemical assessments wherever possible (for example, as part of NICNAS’ consideration of assessment certificates). This is expected to be enhanced as more assessments become available from other international chemical assessment schemes, for example, the European Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH).

In relation to the current situation, some stakeholders have suggested that:
  • NICNAS’ failure to accept assessment outcomes from other comparable regulators stifles innovation and limits the availability of chemicals in Australia
  • there could be significant cost savings (and improved efficiency) if NICNAS were to accept approvals from other countries.
By contrast, other stakeholders suggested that NICNAS must retain the capacity to review assessments from other countries, noting differing risk appetites in different countries and different public health and environmental considerations.

The automatic acceptance in Australia of overseas approvals or refusals for new chemicals (i.e. mutual recognition of regulatory decisions) has a number of practical barriers including:
  • the level of risk acceptable to the general population varies from country to country
  • exposure to humans and the environment varies depending on the use pattern of the chemicals
  • environmental considerations and population distributions vary between countries
  • checks and balances built into individual regulatory frameworks vary and need to be considered on a case-by-case basis when considering the appropriateness of accepting regulatory decisions from other jurisdictions.
Having said this, improvements could be made to the way in which overseas assessments are utilised and to facilitate international work sharing.

For example, in addition to Options B1-B6, possible options for reform include:Top of PageF1. Increase utilisation of international assessments to support and streamline the assessment for permits (noting that chemicals subject to permits are lower risk because there are ongoing post-market conditions and controls and there is a narrower set of uses)13.

F2. Better align the categories of, and data requirements for, exemptions, permits and certificates with, for example, the US, Canada and the EU 14.

Input sought from stakeholders

Do these options strike an appropriate balance between the use of international assessments/harmonisation and the need to ensure that Australia retains the capacity to undertake Australian relevant risk assessment and management where necessary?

If these options were to be adopted, what are the implications?

If these options were (or were not) adopted, how would this impact on your organisation?

Chemicals in articles

The role of NICNAS in the regulation of chemicals that are in articles or products has been the subject of some confusion and some stakeholders have suggested that NICNAS should be able to directly regulate articles or products containing industrial chemicals.

Currently the ICNA Act expressly provides that an industrial chemical means a chemical that has an industrial use. A chemical is further defined so as to expressly exclude articles. An article is also defined in the ICNA Act yet this definition is somewhat narrower than the generally understood definition of a product.

The practical effect of this is that NICNAS does not regulate articles per se. However, there has been confusion surrounding the extent to which NICNAS can, or should, assess the risk from a chemical leaching/escaping from an article as part of its assessment of the chemical.

It is not proposed that NICNAS commence regulation of all articles or products containing industrial chemicals due to practical limitations. Aside from the potentially large volume of products, NICNAS regulation of all products would give rise to considerable duplication and overlap with other product regulators including the ACCC and with the new product stewardship legislation15.

However, it is acknowledged that, there is value in clarifying the role of NICNAS in relation to industrial chemicals in articles. Consistent with recommendation 5.4 of the PC Report, there is also value in clarifying relationships and formalising arrangements between NICNAS and, in particular, the ACCC. Any description of relative roles and responsibilities should also clarify NICNAS’ ongoing role in the assessment of the risks from chemicals leaching or escaping from articles over the full life cycle of the article.

Possible options for reform:

G1. Clarify the role of NICNAS in relation to chemicals in articles as part of the development of the industrial chemicals risk assessment and management manual (option A1) and through the re-negotiation of MOUs where necessary (option A3).

G2. Amend the ICNA Act to clarify the role of NICNAS in the assessment of chemicals in articles, particularly imported articles.

Input sought from stakeholders

Do these options address the problems relating to articles?Top of Page

Chemicals in cosmetics

There are two aspects to NICNAS’ regulation of cosmetics. Firstly, NICNAS assesses chemicals and a function or use of a chemical may be as an ingredient in cosmetics. Secondly, NICNAS administers and enforces the Cosmetics Standard 2007 which sets out the ‘rules’ or ‘conditions’ that apply to certain cosmetic product categories (currently six product categories) in order for them to meet the definition of a cosmetic and therefore be regulated by NICNAS.
Cosmetics must be labelled in accordance with the Trade Practices (Consumer Product Information Standards) (Cosmetics) Regulations 1991, that sets out the standards, the responsibilities of suppliers and retailers, and the ACCC's role in enforcing cosmetic and toiletries ingredients labelling.

Portfolio responsibility for Cosmetics Standard 2007

The PC Report recommended that responsibility for administration and enforcement of the Cosmetics Standard 2007 be transferred to the ACCC (recommendations 4.3 and 5.5 of the PC Report). The PC considered that:
  • the responsibility for regulating products should be vested in a dedicated standard-setting body such as the ACCC, rather than a chemical assessment agency
  • NICNAS should retain the responsibility for assessing new chemicals in cosmetics and also provide expert support to the ACCC in monitoring and enforcement of compliance with the Standard and in updating the Standard.
There are advantages and disadvantages to moving responsibility for the Cosmetics Standard. The main advantage of moving it to the ACCC is that it provides policy logic by ensuring that responsibility for the Standard rests with a standard-setting body.

By contrast, if the Cosmetics Standard were to be kept within the remit of NICNAS, this would ensure regulatory continuity and minimise duplication (noting that if responsibility is shifted to the ACCC, NICNAS would still need to provide technical advice to the ACCC in relation to the Standard).

Regulatory approach to chemicals in cosmetics

It is also acknowledged that the regulatory approach to chemicals in cosmetics requires re-consideration and reform.

Cosmetics chemicals involve different considerations to other industrial chemicals because they are widely used by the whole community and are generally used without additional protective measures (such as gloves or masks).

It may therefore be appropriate to introduce new provisions in the ICNA Act (and on AICS) specifically dealing with cosmetics. These could be based on the EU model and could include, for example, a separate inventory of cosmetic ingredients, positive and negative lists that provide more certainty for industry and a separate list of data requirements for the assessment of cosmetics chemicals.

Possible options for reform:

H1. Responsibility for administration and enforcement of the Cosmetics Standard 2007 be transferred to the ACCC but the assessment of chemicals in cosmetics would remain with NICNAS.

H2. New provisions could be introduced into the ICNA Act (and on AICS) to specifically deal with chemicals in cosmetics (rather than continuing to treat them like industrial chemicals). This could include a separate inventory of cosmetic ingredients, a list of ‘pre-approved’ cosmetic ingredients, a list of ingredients that are not to be utilised (based on risk), and a separate list of data requirements for the assessment of cosmetics chemicals. Better alignment with international approaches would also be explored.

Input sought from stakeholders

If these options were (or were not) to be adopted, how would this impact on your organisation?

Import and export of chemicals under the Stockholm and Rotterdam Conventions

Currently, regulations under the ICNA Act are used to prohibit or restrict the introduction or export of industrial chemicals to give effect to some components of Australia’s obligations under two international agreements: the Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in international trade (the Rotterdam Convention) and the Stockholm Convention on Persistent Organic Pollutants (the Stockholm Convention).

The Department of Sustainability, Environment, Water, Population and Communities (DSEWPaC) has the lead responsibility for both these Conventions. The department is responsible for negotiating Australia’s position internationally and for conducting the National Interest Analysis and Regulation Impact Statement, which forms the basis for Australia determining whether to agree to ratify the listing of a chemical on either Convention. A decision to ratify commits Australia to meet the obligations imposed by the Convention on the management of the chemical.

Under the Rotterdam Convention, which deals with trade in hazardous chemicals, the principal obligation is that listed chemicals are subject to a prior informed consent procedure which requires Parties to the Convention to ensure that countries receiving exports of the chemical have provided their informed consent to receive such chemicals. Parties are not required to ban or restrict use or manufacture of listed chemicals.Top of PageResponsibilities under the Stockholm Convention, which can eliminate or severely restrict the use of a chemical, are significant and multi-faceted. They include conditions on the import or export of the chemical but also can have major consequences for product stewardship and the management of wastes, stockpiles, and contaminated sites which are the responsibility of environment agencies and dealt with under their legislation and policies.

The PC report was not clear on these responsibilities. It acknowledged a role for NICNAS in administering the Stockholm Convention (because the PC thought it related primarily to chemical assessment, which is only one aspect of the responsibilities under the Convention) but suggested that the responsibility for those aspects of implementation of the Rotterdam Convention incorporated in the ICNA Act could be transferred to DSEWPaC (recommendation 4.3).

On the one hand, there is a case for consolidating the import and export responsibilities for the Stockholm and Rotterdam listed chemicals with the overall policy and management functions for the international chemical treaties, all of which reside primarily with DSEWPaC. A transfer to DSEWPaC could potentially achieve a more integrated approach to meeting Australia’s obligations under the two Conventions. This is the approach that was taken for ozone depleting chemicals and synthetic greenhouse gas chemicals which are the subject of international treaties and are dealt with comprehensively, including import and export, under legislation administered by DSEWPaC.

On the other hand, if an industrial chemical were subject to import and export controls under the ICNA Act regulations through domestic action before it were considered and listed under the Rotterdam and Stockholm Conventions, maintaining it within the ICNA Act regulations even after international listing might be appropriate. If the options identified in this Discussion Paper are preferred (i.e. enabling NICNAS to fill those ‘regulatory gaps’ in relation to industrial chemicals, which are not yet being addressed by other initiatives) there would be a stronger case for NICNAS to retain a responsibility for import and export regulations relevant to the Stockholm and Rotterdam Conventions.

Stakeholder advice is therefore sought regarding whether it is still valuable to shift responsibility for the import and export regulations, noting that a transfer of the regulations would not necessarily affect the need to continue cost recovery from industry.

Possible options for reform:

I1. Remove regulations relating to the import and export of Stockholm and Rotterdam Convention chemicals from the ICNA legislation, once appropriate alternative legislation has been enacted.

I2. Retain regulations for the import and export of Stockholm and Rotterdam Convention chemicals under the ICNA Act.

Input sought from stakeholders

What are the implications of maintaining the status quo?

Governance – Committees

Currently the committee structure does not provide strategic advice for NICNAS activities as a whole, not does it include all relevant decision makers from other portfolios. There are also significant gaps in stakeholder representation. A diagram of NICNAS’ existing committee structure is included at Attachment C.

It is proposed that the roles, functions and representation of current non-statutory committees be adjusted to best support NICNAS (note the PC Report – recommendation 4.2). If NICNAS’ functions or processes change as the result of other reforms, this may influence the composition and role of the committees. It is therefore proposed that the committees be reconsidered once feedback has been obtained in relation to the other reforms. Committees will be included in the legislation where this is necessary for certainty or to best support the role of NICNAS.

Possible option for reform:

J1. Once the preferred reform options have been identified, consider the most appropriate role and membership of committees to best support the Director of NICNAS.

Input sought from stakeholders

If the options in this Discussion Paper are preferred, what does this mean for the governance committees of NICNAS?

What committees are needed? For example, would it be useful to have a strategic advisory committee advising the Director of NICNAS?

Relationship with the Department of Health and Ageing (DoHA)

Both the internal review and some stakeholders noted that the relationship between NICNAS and the DoHA could be improved with greater clarity around relative responsibilities (including for corporate services and policy advice).

In parallel with consideration of the possible reforms detailed in this Discussion Paper, DoHA has commenced working with NICNAS to identify ways to: clarify roles and responsibilities; improve administrative and resource efficiencies where possible; ensure that NICNAS’ staffing profile appropriately aligns with its responsibilities; and minimise any duplication of effort.

Possible option for reform:

K1. DoHA work with NICNAS to clarify roles and responsibilities and address any administrative and resource inefficiencies.

13 This also has linkages with Option B4, streamlining the assessment process for certificates.
14 This is also discussed in relation to Option B1.
15 The Product Stewardship Act 2011 came into effect on 8 August 2011. This legislation provides the framework to effectively manage the environmental, health and safety impacts of products, and in particular those impacts associated with the disposal of products.

Top of Page