Industrial Chemicals Bill 2017: a new era of regulation in Australia - Environmental Law

The focus of industrial chemical regulation will soon shift slightly in Australia: make sure you are on top of the proposed changes

The regulation of industrial chemicals in Australia is under extensive review, with the fifth iteration of a consultation paper for delegated legislation currently open for comment. Once finalised, the technical delegated legislation will support six bills introduced into Parliament on 1 June 2017 touted to reduce red tape for the industrial chemicals industry in Australia. The Industrial Chemicals Bill 2017 (the Bill) is the main bill implementing change, with the other five bills implementing administrative arrangements, such as the necessary transitional arrangements and charges. On 8 August 2017, the Senate Community Affairs Legislation Committee is due to report back on the six bills following submissions made by public health, environmental and industry groups.

In short, the Bill regulates the introduction (defined to mean to import or manufacture in Australia) of industrial chemicals as defined in the Bill. These will be managed through a new register of industrial chemicals, the Australian Inventory of Industrial Chemicals (AIIC). The Bill also introduces a new independent statutory office holder appointed by the Governor-General, the Executive Director.

ANIMAL TESTING

The changes are part of the Government's 2016 election commitment that includes the first move for Australia to belatedly follow steps taken in numerous countries across the world in the banning of animal testing. The leader in this area is the European Union, which introduced reform in 2013 that banned the sale of cosmetic ingredients and finished cosmetic products in the European Union. That was a huge step forward for the reduction of animal cruelty internationally.

Similarly, but not as heroically, the proposed Australian changes will prevent the use of data from animal testing to support an application for the introduction of new chemicals onto the industrial chemicals inventory, but only where that chemical is proposed to be used solely for cosmetic ingredients. Some exceptions will apply. The ban will commence from 1 July 2018. It will not prevent the sale of products which contain ingredients that have been tested on animals nor the continued use of chemicals already on the current inventory whose introduction to the inventory was supported by animal testing data. Despite those shortcomings, it is a positive step forward for animal cruelty reduction in Australia.

NEW CATEGORIES OF INTRODUCTION

The Bill introduces six new categories of industrial chemicals and requirements for their introduction. Two of those categories will require self-regulation, reflecting the Government's intent to promote the Bill as a move towards reduction of red-tape.

Lower risk chemicals are meant to be regulated through the listed, exempted and reported categories. Technical details of these categories will be confirmed in delegated legislation, however by way of example, these categories will respectively rely on introduction in accordance with the AIIC listing, exemption if for research and development, import and export without opening or low risk and reported if given to the Executive Director and introduced in accordance with that report.

The Bill proposes both criminal and civil penalties for offences. For example, the unauthorised introduction of an industrial chemical carries a maximum criminal and civil penalty of $105,000.

REFUSAL BY THE EXECUTIVE DIRECTOR

Under the Bill, the Executive Director has a new power to prohibit the introduction of a chemical. For example, medium to high risk industrial chemicals that don't satisfy the Bill's exempted or reported categories of industrial chemicals or are not listed on the AIIC, will be 'assessed introductions'. These will require the introducer to hold an assessment certificate for the chemical, which requires application to the Executive Director. That Director must be satisfied that any risks to human health or the environment can be managed before issuing an assessment certificate.

Newcomers to the industrial chemical industry will be caught by the requirement to be registered on the Register of Industrial Chemical Introducers for a registration year (which begins 1 September every year) before being permitted to introduce an industrial chemical. Existing registered introducers will remain on the register as part of the transitional arrangements and will satisfy the one year registration requirement.

To a large extent, the practical implications for industry may not be fully known until the delegated legislation is released. However the changes in the Bill should, in the interim, require attention by those who import or manufacture industrial chemicals in Australia.

WANT TO KNOW MORE?

We have prepared a detailed publication, that outlines the proposed reforms. We note the key date for submissions on the fifth consultation paper is rapidly approaching and those who have an interest in the technical delegated legislation should consider making a submission before 12 July 2017.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.