As we previously reported, a new scheme for the regulation of industrial chemicals will come into effect from 1 July 2020, being the Australian Industrial Chemical Introduction Scheme (the AICIS).

While some aspects of the existing regulatory system for industrial chemicals will not change, an important development is the change to a proportionate risk-based framework for the introduction of new industrial chemicals. This change should see the regulatory burden reduced for those seeking to introduce new industrial chemicals, especially if those industrial chemicals have already been the subject of assessment by comparable overseas regulators.

Overview of the AICIS

The objective of the AICIS is to regulate industrial chemicals in Australia, which include:

  • a chemical element, a compound or complex of a chemical element, an unknown variable composition or biological substance (referred to in the Industrial Chemicals Act 2019 (the Act) as a UVCB substance), and a naturally-occurring chemical, where any of these has an industrial use;
  • a chemical released from an article where the article has an industrial use; and
  • any other chemical or substance prescribed by the rules that has an industrial use.

As can be seen from the above, the key element of an industrial chemical is that it has an "industrial use". Where the chemical is only used as therapeutic goods, foods, and agricultural / veterinary chemical products (each of these is regulated by a separate legislative regime), it is not an industrial chemical.

Common industrial chemicals may include those used in:

  • cosmetics, which encompass products such as makeup, soap, shampoo, deodorant, hair dye and other similar products;
  • cleaning and other domestic products;
  • various industries such as mining and metal extraction;
  • fuel and oil;
  • printing and photography;
  • surface coatings;
  • plastics; and
  • engineering.

A central concern of the AICIS is the introduction of new industrial chemicals in Australia. In this regard, industrial chemicals that are already listed on the Australian Inventory of Industrial Chemicals (the Inventory) may be manufactured or imported by any person or entity that is registered as an "introducer", provided that introduction complies with the terms of the listing.

Introducing new industrial chemicals

As set out in the explanatory memorandum to the bill introducing the Act,

[The Act] rebalances pre- and post-introduction regulatory controls for industrial chemical introductions so that there will be less emphasis on pre-introduction assessment of lower risk new chemicals and a greater focus on post-introduction evaluation and monitoring.

A previous review conducted by the then Productivity Commission of the existing system of regulation of industrial chemicals identified that NICNAS was not sufficiently risk based, with criticism that there was undue focus on the assessment of low risk new industrial chemicals, which could be subject to the same assessment procedures as high risk new industrial chemicals. Similarly, new industrial chemicals that had already been subject to assessment in other jurisdictions were still subject to assessment under NICNAS.

The AICIS will now provide for six categories of introduction of new industrial chemicals as follows:

  1. Listed introductions: These are for an industrial chemical that is listed on the Inventory and where the introduction is within any terms of the listing. There are currently over 40,000 chemicals on the Inventory (currently kept by NICNAS but will be transferred to the AICIS by the Industrial Chemicals (Consequential Amendments and Transitional Provisions) Act 2019). If an introducer seeks to introduce an industrial chemical that is listed on the Inventory then one of the other five categories of introduction will be needed.
  2. Exempted introductions: These are for very low risk industrial chemicals. The relevant risk is the risk to human health and the environment from the introduction of the new industrial chemical. The rules will set the parameters for the kinds of introductions that can fall within this category.
  3. Reported introductions: These are for low risk industrial chemicals and will require a pre-introduction report. The rules are expected to provide further guidance, and in particular are expected to provide for the use of a risk assessment or evaluation undertaken by, or in association with, a trusted international body for chemicals that might otherwise be regarded as medium to high risk.
  4. Assessed introductions: These are for medium to high risk industrial chemicals and will require an assessment certificate, which are obtained via the procedure set out in Part 3, Division 3 of the Act. Once there is an assessment certificate for an industrial chemical, it will be listed on the Inventory after 5 years. However, applications can be made for early listing and industrial chemicals can be listed in certain other circumstances.

Although a certificate will be issued for a chemical introduction based on an assessment of the information available at the time it is introduced, the Act allows for the reconsideration and review of the certificate, with the possibility of cancellation if the executive director is "not satisfied that the risks to human health or the environment from the introduction and use of the industrial chemical can be managed". It will also be possible for certificates to be refused on this basis.

  • Commercial evaluation introductions: These are for testing the market viability of the industrial chemical before full introduction
  • Exceptional circumstances introductions: These are for cases where there is Ministerial authorisation to allow urgent introduction of an industrial chemical.

As a result of these changes, the overall costs to those businesses seeking to introduce such industrial chemicals and consumers of those chemicals should theoretically be reduced. The capacity to have new low risk industrial chemicals undergo a simpler regulatory process is also expected to provide greater incentive for introducers to introduce greener, safer new industrial chemicals. An additional benefit is that such chemicals may be able to replace existing higher risk industrial chemicals.

Although the AICIS will commence on 1 July 2020, certain changes in anticipation are already underway. The Industrial Chemicals (Notification and Assessment) Amendment Act 2019 (Cth) has amended the Industrial Chemicals (Notification and Assessment) Act 1989 (Cth) to, among other things, amend the definition of "polymer of low concern" so as to better align it with international definitions. This change will increase the number of polymers that come within the definition. Polymers of low concern are now exempt from notification.

As reported earlier, perhaps the most high profile change to the regulation of industrial chemicals as far as the general public is concerned is in respect of animal testing.The AICIS will ban the use of animal test data that was obtained on or after 1 July 2020 in applications to introduce new industrial chemicals. The restriction applies only where that industrial chemical is to be used solely in cosmetics, and it does not encompass new industrial chemicals that are to be introduced for more than one end use, where at least one of those end uses is not a cosmetic purpose.

The new provisions mean that manufacturers of cosmetic products and importers seeking to import cosmetic products into Australia will need to first assess whether the cosmetic products will contain any new industrial chemicals. If so, data in support of an application for new industrial chemicals with the relevant regulatory authorities may not include animal data. This is a change that reflects a global trend moving away from the use of animal data in cosmetics and the greater use of other test methods such as those developed by the European Union Reference Laboratory for alternatives to animal testing.

The AICIS will also be supported by a range of offence provisions, which will include fault based, strict lability and civil penalty provisions. This will allow a proportionate response to contraventions of the Act to be made, taking into account any history of offending and other features of the offence.

Copyright 2019: This article is based upon an earlier article entitled "Expert Focus: The new Australian Industrial Chemical Introduction Scheme", published in Chemical Watch on 24 April 2019. This version, with minor modifications is re-published with the permission of Chemical Watch

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