Bills Digest No. 206  1998-99 Australia New Zealand Food Authority Amendment Bill 1999


Numerical Index | Alphabetical Index

WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

CONTENTS

Passage History
Purpose
Background
Main Provisions
Concluding Comments
Endnotes
Contact Officer and Copyright Details

Passage History

Australia New Zealand Food Authority Amendment Bill 1999

Date Introduced: 31 March 1999

House: Senate

Portfolio: Health and Aged Care

Commencement: With the exception of Item 13 the legislation commences on Royal Assent. Item 13, which states that a food standard may relate to a type of food generally or particular brand of food, will be taken to have commenced on 30 July 1998.

Purpose

This Bill proposes amendments to the Australia New Zealand Food Authority Act 1991 based upon recommendations from the Food Regulation Review, the National Competition Policy Review of the Australian New Zealand Food Authority Act 1991 (the Act) and the Review of the State and Territory Food Acts. The Bill introduces an objectives section for the Act and recasts the objectives of ANZFA. While health, safety and the protection of the community remain priorities, the Authority will be required to explicitly consider the costs and benefits of regulation. The Bill streamlines the consultation process for minor amendments to standards and allows ANZFA to decline to refer draft food standards to the Ministerial Council where they deal with issues of minor significance. This power is subject to the Council's capacity to overrule these decisions. The Bill also allows ANZFA to charge for services in certain circumstances.

Background

Australian and New Zealand Food Authority

The Australia New Zealand Food Authority (ANZFA) is primarily responsible for developing, varying and reviewing standards for food available in Australia and New Zealand. Food standards may prescribe a range of matters including: food composition, use of additives, production, storage, handling, maximum levels of environmental contamination including heavy metals and pesticide residues, labelling and advertising.(1) ANZFA also has responsibility for: co-ordinating national food surveillance and recall systems, conducting research, assessing policies about imported food and developing codes of practice with industry.

ANZFA does not have responsibility for the implementation or enforcement of food standards. Recommendations made by ANZFA on draft food standards or draft variations of standards and the implementation and operation of uniform standards are considered by the Australia New Zealand Food Standards Council (ANZFSC). The Council is composed of Health Ministers from the Commonwealth, States and Territories as well as the New Zealand Health Minister. ANZFSC may adopt, amend or reject ANZFAs' recommendations or return them for reconsideration. Under the scheme, once a standard has been adopted by ANZFSC it is adopted by reference under State, Territory and New Zealand legislation. (2)

Main Provisions

Item 1 amends the title of the Act to state that ANZFA has functions relating to food regulatory measures. This replaces the narrower formulation of 'food standards' and reflects the Bill's promotion of voluntary codes of practice as an alternative to prescriptive standards.

Item 2 inserts a new section which outlines the objects of the Act. This follows from a recommendation of the National Competition Policy (NCP) Review. The review argued that the inclusion of an 'objects' clause in legislation provides the following benefits.

Public transparency to ensure the content of regulation is consistent with the objectives which in turn should reflect the nature of problems being addressed by the regulation

A concise statement to the administering agency of its role which provides guidance in administering each of its particular functions

A basis for an administering agency to develop benchmarks against which it can measure its performance and

A level of public accountability by administering bodies.(3)

The proposed objects inserted by Item 2 include that:

  • people enjoy the benefit of equivalent public health protection in relation to food throughout Australia and New Zealand
  • adequate information relating to food is provided to enable consumers to make informed choices about food
  • decisions of the business community are not distorted, and markets are not fragmented, by variations in the laws in force in Australia and New Zealand in relation to standards
  • a framework for minimum but effective regulation of food is provided, and;
  • consistency between domestic and international food regulatory measures is promoted.

The are some distinctions between these objects and those recommended by the NCP review. Significantly, the Bill provides that the ANZFA Act should ensure that 'a framework for minimum but effective regulation of food is provided'. In addition, the Bill substitutes the objective of promoting consistency between domestic and international food regulatory measures for the Review's suggestion that the Act give effect to 'Australia's and New Zealand's international treaty obligations and national co-operative arrangements in relation to food.' It may be argued that the objective in the Bill is more vague and less onerous than that suggested by the review.

Item 8 inserts a new definition of food based on the recommendation of the Review of State and Territory Food Acts in 1998. The definition of food is a demarcation line between the jurisdiction of ANZFA and the Therapeutic Goods Administration. The proposed definition includes:

  • any substance or thing capable of being used for human consumption
  • any substance or thing capable of being used as an ingredient or additive in an item used for human consumption
  • a substance used in preparing something for human consumption
  • chewing gum and
  • a substance declared by the Minister to be food under proposed section 3B.

Ministerial declarations are subject to Parliamentary Disallowance. Food does not include therapeutic goods within the meaning of the Therapeutic Goods Act 1989.

Item 9 implements a rewrite of ANZFA's functions by inserting proposed subsection 7(1). The NCP Review stated that the existing section 7 does not reflect the importance that should be given to alternative regulatory measures such as codes of practice as a means to reduce the regulatory burden.(4) Proposed section 7 makes it clear that Codes of Practice will not be referred to ANZFSC for approval. This is because codes of practice are not legally binding.

The NCP Review found that while the introduction of the ANZFA Act has achieved uniformity of food standards, differing interpretation by State and Territory agencies is adding unnecessarily to compliance costs.(5) In order to deal with this issue, proposed section 7 provides ANZFA with responsibility for developing guidelines to assist the interpretation of the ANZ Food Standards Code and a specific function to harmonise State and Territory food standards.

The Bill rejects NCP Review Recommendation 27 that a new section 7A be inserted to guide ANZFA in the performance of its functions. The recommended section would have stated that 'in carrying out its regulatory functions contained in section 7, the authority must consider whether the benefits to the community as a whole will outweigh the costs and whether there are not alternatives which are more cost-effective in achieving such benefits.' The effect of not proceeding with this amendment is probably minimal as a similar phrase is contained in the proposed section 10 which deals with ANZFA's objectives in developing standards (see below).

Section 8 outlines the powers of ANZFA. Item 11 amends the section by changing 'standards' to 'food regulatory measures' reflecting the new emphasis on ANZFA responsibilities in relation to codes of practice.

Section 9 contains a list of matters that may be included in food standards. These matters are greatly expanded by Item 12 to include standards relating to:

  • the knowledge, skill, health and hygiene requirements for people dealing with food
  • the responsibilities of businesses that are dealing with food relating to any hygiene requirements
  • the design, construction, maintenance and cleanliness of:
  • premises (including fittings and fixtures) at which food is dealt with; or
  • equipment (including single use items) used to deal with food; or
  • vehicles used to transport food
  • the information that a business that deals with food may be required to give about the business to State or Territory authorities
  • restrictions on the premises at which, and the persons by whom, particular food may be sold or otherwise supplied
  • requirements relating to animals and pests at premises in which food is dealt with, or in vehicles in which food is transported and
  • such other public health matters relating to food as are prescribed.

Proposed section 9A provides that codes may only deal with matters that may be the subject of standards. According to the Explanatory Memorandum this is to ensure that ANZFA only makes codes of practice in relation to its areas of expertise.(6) It may also be argued that the fact that codes and standards deal with the same subject matter encourages ANZFA (and others) to view the two types of food regulatory measures as substitutes.

Item 16 provides for a rewrite of ANZFA's objectives in the use of its powers in developing standards and codes. Under the proposed section 10 ANZFA's top priority will remain the protection of public health and safety. A secondary objective will be the prevention of misleading and deceptive conduct. Several matters(7) which formerly were objectives in setting standards are now matters to be taken into account developing food standards but are no longer objectives in their own right. There is an apparent incongruity between the objectives of ANZFA under proposed section 10 and those in proposed section 2A which sets out the objects of the Act. It is an object of the Act to ensure that, by means of the establishment and operation of ANZFA, adequate information relating to food is provided to enable consumers to make informed choices about food. However this is not an objective of ANZFA in developing food regulatory measures under new section 10. It is merely a matter to which ANZFA must have regard.

Part 3 of the Act deals with the development and variation of standards. Standards may be developed as a result of an application to ANZFA (Part 3 -Division 1) or on ANZFA's initiative (Part 3 -Division 2). Amendments to Part 3 ensure that codes are subject to the same processes during their development as standards.

The Food Regulation Review recommended that ANZFA and ANZFSC should 'streamline its standards-setting process, wherever possible, without compromising its ability to consult appropriately on the impacts of new and amended standards'(8)

Item 20 amends section 12 of the Act providing that applications for the development or or variation of a food regulatory measure must be accompanied by charges fixed under section 66 of the Act. Charges may cover preliminary assessment of the application and notices given in relation to the application.

Proposed section 13 states that ANZFA must make a preliminary assessment of matters in a food regulatory measure. The Authority is required to perform a cost-benefit analysis of the proposed measure and determine whether other measures (available to the Authority or not) would be more cost effective. After making this preliminary assessment, the Authority must accept or reject the application. Applicants must be notified in writing. A charge paid in relation to an application must under proposed section 13A be refunded if it is rejected.

Proposed Section 14 requires that if an application is accepted the Authority must publicly invite submissions. The present notice requirements require the authority place advertisements in the Gazette and the New Zealand Gazette. In contrast, under new section 14 the Authority can decide the appropriate manner of providing public notice.(9)

Proposed section 15 deals with the manner of assessing applications received by ANZFA. It largely repeats the existing provisions with the exception that it provides that no assessment should be made without payment of a charge fixed under section 66. The proposed subsection 15(3) provides that in making an assessment of an application, ANZFA must have regard to submissions, the list of objectives in section 10 and also, for the first time whether the costs that would arise from a food regulatory measure would outweigh the benefits to the public and whether any alternatives to regulation would be cost effective.

Proposed section 17B is designed to streamline the development of codes. It provides that following an inquiry, ANZFA must approve of reject a draft code of practice or an amendment to a draft code. Due to the fact that Codes of Practice are not legally binding, it is not considered necessary to refer them to ANZFSC.(10)

The Bill also contains provisions which enable ANZFA to make determinations which were previously the preserve of the Council (see proposed Division 1A). Under proposed section 20A ANZFA may deal with less significant applications for draft standards or variations where the draft standard raises issues of minor significance or complexity and the Council has approved a general approach to apply in such cases. Such standards will, under proposed section 20C, be taken to have been adopted by the Council if no member objects within 28 days of ANZFA giving the Council written notice of its decision.

Division 2 deals with proposals by ANZFA for the development and variation of food regulatory measures. In assessing such proposals ANZFA must, under proposed section 15, consider whether the costs that would arise from a food regulatory measure would outweigh the benefits to the public and whether any alternatives to regulation would be cost effective.

Proposed Section 25 provides that ANZFA must approve or reject codes of practice.

Item 34 inserts new Division 2A. The new division mirrors proposed Part 3 Division 1A where the Authority is empowered to deal with less significant proposals for draft standards. Proposed Section 28A covers situation where the Authority has developed a draft standard. After holding an inquiry to consider the draft standard, ANZFA may decide that it need not make a recommendation to the ANZFSC because the standard raises issues of minor significance or complexity; and the Council has approved a general approach to be applied in such cases.

If a Council member does not disagree with ANZFA's decision within 28 days, the Council is taken to have approved of the decision (new section 28 C).

Item 36 provides that standards that are taken to be adopted by the Council under proposed section 20B or 28B must be published in the Gazette or the New Zealand Gazette. There appears to have been a minor drafting error here in that proposed sections 20C and 28C are the relevant provisions (ie the provisions which deem Council approval of the Authority's decisions).

Item 50 seeks to insert a new section 36(1) to facilitate the process of 'fast-tracking' proposals or applications for food regulatory measures. The section enables ANZFA to decide to omit to do any matter or matters required by Part 3 (other than conduct a preliminary or full assessment) where it is satisfied that omitting to do the thing will not have a significant adverse effect on the interests of anyone, or the issue raises issues of minor complexity only. The proposed new section requires ANZFA to give written notice of its decision to the applicant, appropriate government agencies and bodies or persons who have made submissions.

The Australia New Zealand Food Authority Advisory Committee advises on matters referred to it by the Authority or by the States or Territories or New Zealand. Item 55 allows the advisory committee an expanded role. Section 42(3) of the Act, which prevents the Food Advisory Committee from advising on an application unless it has been referred to the committee by ANZFA is repealed. According to the Explanatory Memorandum(11), the amendment reflects the expanded role that the Committee has already taken on.

Item 63 repeals the existing section 66 which provides for regulations to impose fees for services. Currently, despite the existing provision, fees are not generally charged. Proposed section 66 states the regulations may provide that ANZFA can charge a fee for the use of its facilities. Reflecting the move to cost recovery, the amendment also provides that payments are to be made to ANZFA rather than the Commonwealth. It is not the Government's intention that ANZFA operate a business entity. In his Second Reading Speech, the Minister stated that 'the Authority will only be able to recover its costs and will not be able to make a profit.'(12)

At this stage, the size of the proposed fees is not known. It is possible that large fees may deter consumer groups from making applications for the development of standards. The current section 66 provides that regulations may prescribe circumstances in which the Authority may waive fees that would otherwise be payable. There is no equivalent to this provision in the Bill. Although proposed section 66C does provide that the regulations may provide for remissions and refunds, the requirement to pay an up front fee may act as a deterrent to some community groups.

Concluding Comments

An appropriate framework for food regulation involves balancing an array of often conflicting considerations. The new 'objectives' clauses contained in the Bill represent an attempt to alter the balance. The philosophy underlying the Bill is that the Act currently gives primacy to the benefit of protecting of public health without acknowledging costs imposed on business.

The proposed section 10 largely mirrors recommendation 25 of the NCP review. However, a different form of words is used to convey the requirement that in developing standards ANZFA must make an assessment of the risks raised. The NCP calls for the systematic application of public health risk assessment, including the best available scientific data and risk principles where the Bill speaks of the need for standards to be based on risk analysis that uses sound scientific principles. The distinction between these two formulations is not entirely clear. The underlying basis of the provision however is that in some cases it may be impossible to guarantee complete safety and that standards may be set at a level which represents what is perceived by ANZFA to be an acceptable level of risk to public safety.

Recent overseas experience with genetically modified foods has raised concerns about the rigour of risk assessment processes employed by food regulators.(13) It should also be noted that there are no laboratories at ANZFA(14) and that data for its assessment of food is based predominantly upon information provided by food companies and overseas agencies.

While it may be true that it is impossible to guarantee that food products are completely safe, the Bill's promotion of light touch regulation in the form of codes of practice may raise concerns that the pursuit of efficiency, consistency and trade may come at the expense of public health. For example, it is possible that the promotion of consistency between International and Australian regulations may mean a reduction in Australian food standards. In an era where novel foods are being developed by biotechnological means, there are serious risks involved in reducing the rigour of food standards.

The measures in the Bill, which enable ANZFA to make minor amendments to food standards without reference to the Council should provide flexibility. They seek to prevent the Council being tied down by matters that can capably be handled by ANZFA. Similarly, the removal of restrictive notice provisions should enable ANZFA to perform its functions more speedily. The reaction of interested persons may need to be monitored to ensure that the methods of public notification chosen by ANZFA are adequate.

Endnotes

  1. See section 9 Australia and New Zealand Food Standards Act 1991.

  2. Food Regulation Review (W. Blair - Chair), Food: a growth industry, August 1998, Commonwealth of Australia.

  3. Ibid p. 119.

  4. Ibid p. 128.

  5. Ibid p. 129.

  6. p. 10.

  7. For example, promoting fair trading in food, fostering trade and commerce in the food industry, ensuring consumers have adequate information to make informed choices about food and consistency between domestic and international food standards.

  8. Food Regulation Review (W. Blair - Chair), Food: a growth industry, August 1998, recommendation 17(a), Commonwealth of Australia.

  9. Explanatory Memorandum p. 13.

  10. Explanatory Memorandum p. 13.

  11. p. 18.

  12. Second Reading Speech, Senate, Hansard, 31 March 1999, p 3547.

  13. US and UK food authorities failed to require testing of genetically modified soya beans for chemical changes after they were sprayed with herbicide. See 'Doubts Raised over the safety of GM soya beans' Canberra Times, 25 May, 1999.

  14. See R. Polya, 'Genetically Modified Foods - Are We Worried Yet?', Current Issues Brief No 12 1998-99, p15, Department of the Parliamentary Library.

 

Contact Officer and Copyright Details

Mark Tapley
28 June 1999
Bills Digest Service
Information and Research Services

This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document.

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ISSN 1328-8091
© Commonwealth of Australia 1999

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Published by the Department of the Parliamentary Library, 1999.

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