Bills Digest no. 78, 2017–18
PDF version [352KB]
Paula Pyburne
Law and Bills Digest Section
8 February 2018
Contents
Purpose of the Bill
Structure of the Bill
Background
Regulation of agricultural and
veterinary chemicals
Pre-2014
Post-2014
Agricultural Competitiveness White
Paper
Productivity Commission
2016–17 Budget and consultation
Move to Armidale
Committee consideration
Senate Standing Committee for
Selection of Bills
Senate Standing Committee for the
Scrutiny of Bills
Policy position of non-government
parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human
Rights
Parliamentary Joint Committee on
Human Rights
Part 1—annual returns and
record-keeping
Commencement
Current law
Payment of levies
Annual returns
What the Bill does
Lodging returns
Keeping records
Stakeholder comments
Part 2—preliminary assessments
Commencement
Current law—approvals and variations
What the Bill does
Application for approval
Application for variation
Stakeholder comment
Current law—permits
What the Bill does
Part 3—variation of relevant
particulars and conditions
Commencement
Current law
What the Bill does
Stakeholder comments
Part 4—variation of label approval
while approval suspended
Commencement
Current law
What the Bill does
Stakeholder comment
Part 5—false and misleading
information
Commencement
Current law
Importation offence
False and misleading information
Lesser offence
What the Bill does
Amount of civil penalty
Problems that are addressed by civil
penalties
Stakeholder comments
Part 6—notification about variation
to Maximum Residue Limits Standard
Commencement
Background
Current law
What the Bill does
Other provisions
Concluding comments
Date introduced: 25
October 2017
House: House of
Representatives
Portfolio: Agriculture
and Water Resources
Commencement: Various
dates as set out in the body of this Bills Digest
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent, they
become Acts, which can be found at the Federal
Register of Legislation website.
All hyperlinks in this Bills Digest are correct as at
February 2018.
Purpose of
the Bill
The purpose of the Agricultural and Veterinary Chemicals
Legislation Amendment (Operational Efficiency) Bill 2017 (the Bill) is to amend
the various statutes relating to agricultural and veterinary chemical products (agvet)
to make minor and technical amendments. In addition the Bill clarifies
ambiguities and removes redundant provisions.
Structure
of the Bill
The Bill has a single Schedule of eight Parts:
Background
Regulation
of agricultural and veterinary chemicals
The regulatory framework for managing pesticides and
veterinary medicines in Australia is collectively referred to as the National
Registration Scheme for Agricultural and Veterinary Chemicals (NRS). The NRS is
a partnership between the Commonwealth and the states and territories.[1]
The Australian Pesticides and Veterinary Medicines
Authority (APVMA) is responsible for administering and managing the parts of
the NRS that oversee registration, quality assurance and compliance of agvet
chemicals up to and including the point of retail sale.[2]
The key regulatory activities undertaken by the APVMA include: assessing and
registering agvet products; approving active chemical constituents; issuing
permits and licences; monitoring compliance with registration, permit and
licence conditions; and investigating suspected non-compliance.[3]
Pre-2014
The APVMA was the subject of reviews by the Australian
National Audit Office in 2006[4]
and by the Productivity Commission in 2008.[5]
Both of those reviews made recommendations for improvement.
In response to the reviews and to complaints about the
performance of the APVMA,[6]
the Government enacted the Agricultural
and Veterinary Chemicals Legislation Amendment Act 2013 (2013 Amendment
Act).[7]
The 2013 Amendment Act represented a significant modernisation of the APVMA’s
regulatory activities. The key reforms which were required to be implemented
from 1 July 2014 included:
- new
regulatory guidance to industry under the reformed legislative arrangements
- a
structured, upfront pre-application assistance scheme for applicants
- a
system to electronically receive all applications online
- stricter
preliminary assessment arrangements that focus on basic application
requirements (restricting the ability of the applicant to rectify a defect in
their application during this phase of assessment)
- revised
maximum assessment timeframes based on the type of application being made, with
increased time for the assessment of certain products and chemical applications
- additional
requirements for the review of registered products and chemicals (such as the
development of work plans for each review) and statutory timeframes for
completing chemical reviews and
- procedural,
technical and transitional arrangements, including limiting the acceptance of
additional material from applicants and introducing requirements to provide
notices of certain proposed decisions to applicants.[8]
The reforms also included the introduction of a mandatory
scheme for re-approval and re-registration of registered products. These
provisions were subsequently repealed by the Agricultural and
Veterinary Chemicals Legislation Amendment (Removing Re‑approval and
Re-registration) Act 2014.
The reforms in the 2013 Amendment Act were intended
to:
... encourage the development of newer and safer chemicals by
providing more flexible and streamlined regulatory processes with higher levels
of transparency and predictability for business seeking approval for agvet
chemicals to enter the market. The reforms should result in a more
straightforward assessment process that is easier to understand and more cost
effective to administer. In many cases, particularly for products of low
regulatory concern, the reformed system as established by these amendments
should be faster, deliver more predictable outcomes and result in improved
health and environmental protection for the broader community.[9]
Post-2014
Agricultural
Competitiveness White Paper
On 4 July 2015, the Government released its Agricultural
Competitiveness White Paper which promised ‘a fairer go for farm businesses by
creating a better business environment with better regulation ...’.[10]
The White Paper acknowledges that ‘Australian agricultural
and veterinary (agvet) chemical regulation imposes a large regulatory burden’
that is ‘often disproportionate to the risks these products pose’.[11]
The White Paper sets out the Government’s intention to lower
the regulatory burden in the following ways:
The Government is putting in place a new approach for the
APVMA to streamline access to products and better manage the risks these
products can pose, while ensuring human health protection.
Working with industry, the Government will limit pre-market
assessments of low- and medium-risk products. The Government will focus its
attention on products that pose the highest risk. The Government will recognise
assessments from accredited third party suppliers and trusted chemical
regulators to reduce the paper work. Where products are available in trusted
overseas countries, the Government will examine risks that are different in the
Australian market, such as where we have different human health requirements,
agricultural practices or environmental assets. In collaboration with industry
and the States and Territories, the Commonwealth will explore opportunities to
improve post-market compliance and national control of chemical use.[12]
Productivity
Commission
In November 2015, the Treasurer requested the Productivity
Commission to undertake an inquiry into the regulatory burden imposed on Australian
farm businesses, focussing on regulation with a material impact on domestic and
international competitiveness.[13]
The Productivity Commission’s final report, published in
March 2017[14]
noted that, despite numerous reviews and subsequent reforms, concerns remain
about:
- unnecessarily
lengthy, complex and duplicative registration procedures and
- interjurisdictional
inconsistencies, particularly in control-of-use regimes,[15]
which can make it costly and confusing to comply with regulatory requirements.[16]
2016–17
Budget and consultation
The 2016–17 Budget included $17.1 million over a four year
period to streamline agvet chemical regulation consistent with the intentions
set out in the Agricultural Competitiveness White Paper.[17]
The Department of Agriculture and Water Resources carried
out a public consultation in
relation to an exposure draft of this Bill between 20 June 2017 and 19 July
2017.[18] The consultation proposed ten
amendments which were intended to ‘deliver operational efficiencies for
the APVMA, clarify ambiguities in the legislation and remove unnecessary and
redundant provisions’.[19]
Fourteen
submissions were received.[20] This Bill contains only eight
of the original ten proposed amendments. It should be noted that the two
measures which are not included in this Bill relate to:
- clarifying the confidential commercial information
provisions to improve their operation and reduce uncertainty for APVMA staff
and
- adding the potential for human exposure to
antimicrobial resistant micro-organisms as a specific safety consideration to
which the APVMA must have regard for chemical products and active constituents.[21]
These two measures were the subject of the majority of the
comments by stakeholders. The Government has stated that it is developing a
second legislative package.[22]
It is not known whether the amendments which were not included in this Bill
will be part of that package.
Move to
Armidale
The performance of the APVMA has been the subject of
considerable scrutiny since the making of the Public Governance,
Performance and Accountability (Location of Corporate Commonwealth Entities)
Order 2016 (the Order) which requires the APVMA to relocate to a regional
community which is within 10 kilometres by road of the main campus of a
regional university that is recognised for research and teaching in the field
of agricultural science.
The APVMA’s move to Armidale is currently in the planning
phase and is expected to be completed in 2019.[23]
In the meantime, timeliness of decision-making has been affected by an increase
in applications and staff vacancies.[24]
It should be noted that the amendments in the Bill are
generally minor in nature. They do not attempt to resolve issues that have
arisen due to the proposed move.
Committee
consideration
Senate
Standing Committee for Selection of Bills
At its meeting of 7 December 2017, the Standing Committee
for Selection of Bills deferred consideration of the Bill to its next meeting.[25]
Senate
Standing Committee for the Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills had
no comment on the Bill.[26]
Policy
position of non-government parties/independents
At the time of writing this Bills Digest no comments had
been made about the contents of the Bill by non-government parties or
independents.
Position of
major interest groups
The views of stakeholders are canvassed along with the
relevant amendments in each Part of the Bill, below.
Financial
implications
According to the Explanatory Memorandum, the Bill ‘will
have no financial impact on the Australian Government Budget’.[27]
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed
the Bill’s compatibility with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[28]
Parliamentary
Joint Committee on Human Rights
The Parliamentary Joint Committee on Human Rights
considers that the Bill does not raise human rights concerns.[29]
Part 1—annual
returns and record-keeping
Commencement
The amendments in Part 1 of the Bill commence on the day
after Royal Assent.
Current law
Payment of
levies
Currently, levies under the agvet scheme are payable based
on the dollar value of sales (known as leviable disposals)
of registered products.[30]
The interested person in relation to the chemical product is
liable to pay the levy.[31]
For the purposes of the Collection of Levy Act, the
interested person, in relation to a registered chemical product, is:
- the
person (the original applicant) who applied for the registration or,
in the case of a chemical product whose registration has been renewed, applied
for the renewal, or the last renewal of the registration
- if
the original applicant has entered into a contract with another person in
relation to the product so that the other person will or may
apply to the APVMA to have the other person’s name entered in the relevant
particulars in relation to the product, or to have a label approved in relation
to containers for the product—the other person
- if
the person who would be the interested person was an individual who has died or
is an individual whose affairs are being lawfully administered by another
person—their legal personal representative or the person’s administrator or
- if
the interested person was a body corporate—a successor in law of that body
corporate.[32]
Annual
returns
The requirement for annual returns is contained in 69E of
the Administration Act. Under that section a person who imports into,
manufactures in, or exports from Australia, chemical products or active constituents
for proposed or existing chemical products during a financial year must give
the APVMA a return, setting out the respective quantities of those
active constituents, or of the active constituents contained in those products.
The return must be provided to the APVMA within three months after the end of
the year concerned.
Together, these provisions require companies to collate
information on both quantities of active constituents contained in products and
sales of product and to report those matters to the APVMA at different times.
What the
Bill does
Lodging
returns
Item 5 of Part 1 of the Bill repeals section 69E of
the Administration Act.
Item 2
of Part 1 of the Bill inserts proposed section 35 into the Collection
of Levy Act to align the requirement to
lodge a return with the requirement to pay levies.
Proposed subsection 35(1) of
the Collection of Levy Act requires the interested person in
relation to a chemical product who is liable to pay a levy in respect of leviable
disposals of the product to give the APVMA a return. The return must set
out the total quantity of chemical product that was disposed of anywhere in
Australia at any time during a financial year. The return must be provided
before 30 November in the next financial year.
A failure to give the APVMA the required return gives rise
to an offence of strict liability.[33]
The maximum penalty for the offence is 50 penalty units.[34]
In addition, proposed subsection 35(1) is a civil penalty provision.[35]
This is consistent with the APVMA’s existing power (and the position under
section 69E of the Administration Act) to apply to a court of competent
jurisdiction for an order that a person who is alleged to have contravened a
civil penalty provision must pay the Commonwealth a pecuniary penalty.[36]
There is an exception to the general rule about providing
an annual return—that is, a return is not required for a quantity of product
that is less than the quantity prescribed by the regulations or for a chemical
product that is prescribed by the regulations.[37]
This exception is in similar terms to the exception in existing subsection
69E(2), which is to be repealed. According to the Explanatory
Memorandum to the Bill, the regulation may:
... prescribe low quantities of chemical products for which an
interested person is exempt from the requirements to provide an annual return... [and
may also] ... prescribe a limited range of ‘low regulatory concern’ chemical
products that could be exempted from the annual return reporting requirements.[38]
The APVMA must give the Secretary of the Department a
statement setting out the total quantities of each active constituent for each
chemical product covered by those returns before the end of the next financial
year.[39]
For the purposes of this requirement, item 1 of Part 1 of the Bill
inserts the definition of the term active constituent into
subsection 3(1) of the Collection of Levy Act.[40]
Keeping
records
Item 3
of Part 1 of the Bill inserts proposed section 37
into the Collection of Levy Act to require an interested person who
is liable to pay levy in respect of leviable disposals of the
product to keep records. The relevant records are those that are reasonably
necessary to enable the APVMA to find out whether the requirement to give an
annual return has been complied with. The records are to be retained for six
years.
A failure to comply with that requirement gives rise to an
offence of strict liability. The maximum penalty for the offence is 50 penalty
units.[41]
In addition, proposed subsection 37(1) is a civil penalty provision.[42]
Stakeholder
comments
The simplification of the reporting requirements for annual
returns was welcomed by stakeholders.[43]
CropLife Australia commented favourably on the repeal of section 69E of the Administration
Act, which it considered ‘is an unnecessary regulatory burden’ which
‘serves no genuine policy purpose’.[44]
The Veterinary Manufacturers and Distributors Association (VMDA) was also
supportive stating:
We accept that there is a need to provide some degree of
information, and support this proposal as a practical means of providing the
information without imposing on industry a complex and unwieldy system that is,
in the end, inaccurate.[45]
Part 2—preliminary
assessments
Commencement
The amendments in Part 2 of the Bill commence 12 months
after Royal Assent.
Current law—approvals
and variations
Prior to the enactment of the 2013 Amendment Act, the
Department of Agriculture was concerned that the APVMA had to:
... go back to registrants with every small defect it finds
with an application ... They have to continually do this and it takes an
inordinate amount of time, and lots of letters back and forth to be able to
accept the application, because of these small deficiencies.[46]
In order to remedy this perceived defect in the process,
the 2013 Amendment Act did two things. First, it prescribed what
it meant to meet the application requirements.[47]
Second, it gave the APVMA one month to complete a preliminary assessment
of an application.[48]
An application meets the application requirements
if:
- it
is lodged with the APVMA in the approved manner and form, is accompanied by the
prescribed fee and contains the required information
- the
constituent, product or label in relation to which the application is made
complies with any requirement prescribed by the regulations
- any
requirement prescribed by another provision of the Agvet Code in relation to
the application has been complied with and
- any
amount (including an amount in respect of a tax or penalty) that is due and
payable by the applicant to the APVMA has been paid.
Where the application appears to meet the
application requirements, the APVMA must notify the applicant that the
application has passed the preliminary assessment, in writing, within 14 days
of making that preliminary assessment. The notice must state, amongst other
things, that the application has passed preliminary assessment, and it must set
out any matters prescribed by the regulations.[49]
In addition, the APVMA must publish a summary of the application that includes
any details prescribed by the regulations.[50]
Where the application does not appear to meet the application
requirements, the APVMA must refuse the application.[51]
The requirement for an application to undergo a
preliminary assessment was a key feature of the 2013 Amendment Act—an
application for a variation of an approval or registration is the subject of a
preliminary assessment process in equivalent terms.[52]
What the
Bill does
The requirement that the APVMA complete a preliminary
assessment of the application within one month after it is lodged remains.
However, the Bill removes the requirement that the APVMA refuse an application at
first instance if it does not appear to meet the application requirements.
Application
for approval
Item 10 of Part 2 of the Bill repeals subsection
11(3) and inserts proposed subsections 11(3) and 11(3A). Under proposed
subsection 11(3) where it appears to the APVMA, after completing a
preliminary assessment of the application, that the application does not
meet the application requirements but that the defects in the application can
reasonably be rectified, the APVMA must give written notice to the applicant
within 14 days setting out the relevant defects and requiring that they are
rectified within one month.
Item 9 of Part 2 of the Bill amends subsection
11(2) of the Agvet Code so that where an applicant who has been given a notice
to rectify a defect does so within the specified time, the APVMA must give the
applicant a written notice that the application has passed the preliminary
assessment and will be determined under the relevant provisions of the Agvet
Code.
Proposed subsection 11(3A) of the Agvet Code
provides that where the APVMA is not satisfied that defects in the application
can reasonably be rectified, or the defects are not rectified within the specified
time, the APVMA must refuse the application .
Application
for variation
The Agvet Code allows a holder[53]
to apply to the APVMA for a variation of the relevant particulars or conditions
of:
- the
approval of an active constituent
- the
registration of a chemical product or
- the
approval of a label for containers for a chemical product.[54]
An application for such a variation must meet the
application requirements.[55]
Section 28 of the Agvet Code sets out the requirement for
a preliminary assessment of such an application in equivalent terms to section
11. Items 11 and 12 of Part 2 of the Bill amend subsections 28(2)
and 28(3) in equivalent terms to items 9 and 10, as discussed above, where a
holder makes an application for a variation, and the application contains defects
that can reasonably be rectified.
Stakeholder
comment
CropLife Australia gave qualified support to this measure
stating:
Care must, however, be taken in its implementation as this
proposal could easily result in unintended consequences. An increase in
administrative burden could potentially result if mistakes that are considered
by the APVMA to be reasonably rectifiable can be repeatedly made by an
applicant. Consequences in the form of penalties or additional fees could
assist in ensuring applicants do not repeat mistakes. It is also paramount that
sufficient guidance is developed operationally by the APVMA to ensure
consistency in what is considered to be reasonably rectifiable.[56]
Competitive Advantage also gave qualified support to the
relevant amendment, expressing concern about the short time frame for
rectifying defects in an application. In particular it noted that there may be
circumstances where ‘a critical person in a company is away during a period
when a response is required’.[57]
The VMDA did not support proposed subsection 11(3A)
of the Agvet Code which requires the APVMA to refuse the claim where it is not
satisfied that the defects in the application can reasonably be rectified:
It is quite possible that an APVMA assessor would “believe”
incorrectly that a particular defect could not “reasonably be rectified” when
in fact it could be. The APVMA cannot know what resources or information the
applicant has on hand or has access to that may rectify any defect regardless
of how “major” it may appear to the APVMA assessor at Preliminary Assessment.[58]
Current
law—permits
All agricultural and veterinary chemical products sold in
Australia must be registered by the APVMA. In addition:
The APVMA administers a permits scheme that allows for the
legal use of chemicals in certain ways that are contrary to the label
instructions or, in certain circumstances allows for the limited use of an
unregistered chemical product.[59]
A person may apply to the APVMA for a permit in respect of
an active constituent for a proposed or existing chemical product, or in
respect of the chemical product.[60]
The application must meet the application requirements.[61]
Like approvals and variations, applications for permits
are subject to a preliminary assessment process. However, the process differs
because it already contains the right for the APVMA to give notice to an
applicant to rectify defects.[62]
What the
Bill does
Items 13 and 14 of Part 2 of the Bill make
minor amendments to the wording in existing subsections 110A(2) and 110A(3) of
the Agvet Code so that they are in equivalent terms to the preliminary
assessment provisions for applications for approval which are discussed above.
Part 3—variation
of relevant particulars and conditions
Commencement
The amendments in Part 3 of the Bill commence three months
after Royal Assent.
Current law
A stated above, a holder may apply to the
APVMA for a variation of the relevant particulars or conditions of:
- the
approval of an active constituent
- the
registration of a chemical product or
- the
approval of a label for containers for a chemical product.[63]
Under existing subsection 29(1) of the Agvet Code the
APVMA must vary the relevant particulars or conditions if it is
satisfied that the application meets the application requirements and that the
variation would meet applicable statutory criteria and established standards as
required by paragraphs 29(1)(b)–(d) of the Agvet Code. If the application does
not satisfy those provisions, the APVMA must refuse the application.[64]
Essentially those paragraphs only give the APVMA the
authority to approve the variation precisely as it is set out in the relevant
application. They do not authorise the APVMA to partly approve an
application for variation.[65]
What the Bill does
Item 18 of Part 3 of the Bill amends paragraphs
29(1)(b)–(d) of the Agvet Code by deleting references to a variation ‘in
accordance with the application’ and substituting references to a variation of
particulars or conditions ‘in a particular way (which may not be the same way
as set out in the application)’. This will allow the APVMA to vary an approval
or registration in a way which differs from the application.
Items 16 and 17 of Part 3 of the Bill make
consequential amendments to the notice provisions in existing section 8S
to require the APVMA to give an applicant a written notice of its
intention—prior to approving a variation of an approval or registration in a
way other than that set out in the application. The effect of the amendments is
to provide the applicant with the opportunity to make submissions to the APVMA
about the proposal.
Item 19 of Part 3 of the Bill is also a
consequential amendment. It inserts proposed paragraph 167(1)(ca)
into the Agvet Code so that a decision to vary relevant particulars or conditions
in a way other than set out in the application for variation is subject to
review by the Administrative Appeals Tribunal.
Stakeholder
comments
Stakeholders either supported this amendment, or made no
comment in relation to it.[66]
Part 4—variation
of label approval while approval suspended
Commencement
The amendments in Part 4 of the Bill commence three months
after Royal Assent.
Current law
The Agvet Code provides for both:
- the
making, and assessment of, applications for approval of an active constituent
for a proposed, or existing, chemical product, the registration of a chemical
product and
- approval
of a label for the containers of a chemical product.
Section 15 of the Agvet Code provides that the APVMA must
not register a chemical product unless each active constituent of the product, as
well as a label for the container of the product, have been approved. The
APVMA must not approve a label for the container of a chemical product unless
it also registers the product.
Division 5 of Part 2 of the Agvet Code provides for suspending
and cancelling approvals and registrations. It sets out the procedure to be
followed by the APVMA before it takes action to suspend and the circumstances
in which it may exercise that power.
In particular, the APVMA may suspend an approval for a label
for containers for a chemical product. This may be because, amongst other
things, there has been a contravention of a condition of the approval,[67]
the label does not meet the labelling criteria, or it does not comply with a
requirement prescribed by the regulations.[68]
The Agvet Code provides that an approval is taken not to be in force during any
period in which it is suspended.[69]
The suspension is made by entering the information, including the period of the
suspension, into the APVMA file.[70]
The effect of these provisions is that where the problem
with the label may be addressed by an amendment to or variation of the label, the
APVMA must first revoke the suspension.[71]
What the
Bill does
Item 22 of Part 4 of the Bill inserts proposed
subsections 43(4) and (5) into the Agvet Code to address this problem.
In particular, proposed subsection 43(4) provides
that the suspension of an approval[72]
of a label for containers for a chemical product does not prevent a person from
requesting a variation of the relevant particulars of the approval, provided
that the variation relates to the reasons for the suspension of the approval.
This means that suspended label approvals may be rectified without first
revoking the suspension.
Stakeholder
comment
None of the stakeholders commented negatively in relation
to this amendment.
Part 5—false
and misleading information
Commencement
The amendments in Part 5 of the Bill commence three months
after Royal Assent.
Current law
Importation
offence
Subsection 69B(1) of the Administration Act prohibits
a person from importing into Australia:
- an
active constituent for a proposed or existing chemical product that is not
approved or
- a
chemical product that is not a registered chemical product, a reserved chemical
product or an exempt chemical product.
Similarly, a person is prohibited from arranging such
importation into Australia, on behalf of another person who, at the time of the
arrangements, is neither a resident of, nor carrying on business in, Australia.
Subsection 69B(1AA) of the Administration Act provides
that a person who contravenes these prohibitions commits an offence (known as
an importation offence)—the maximum penalty for which is 300 penalty units.[73]
However, an offence will not be committed if the person has the APVMA’s written
consent for the relevant importation.[74]
False and
misleading information
Subsection 69ER(1) of the Administration Act provides
that where a person who has applied to the APVMA for written consent (as above)
gives information (whether orally or in writing) that the person knows to be
false or misleading in a material particular, the person commits an offence. In
the alternative, the offence arises if the person produces a document that the
person knows to be false or misleading in a material particular without:
- indicating
to the person to whom the document is produced that it is false or misleading
and the respect in which it is false or misleading and
- providing
correct information to that person if the person producing the document is in
possession of, or can reasonably acquire, the correct information.
Similarly to the importation offence, the maximum penalty
for the offence is 300 penalty units.[75]
Lesser
offence
Subsection 69ER(2) of the Administration Act provides
that a person commits an offence if, when complying with a requirement made by
an inspector under, or for the purposes of, or in connection with any provision
of Part 7A,[76]
Part 7AA or Part 7AB of the Administration Act the person gives
information that the person knows to be false or misleading in a material
particular. An offence is also committed if the person produces a document that
the person knows to be false or misleading in a material particular without:
- indicating
to the person to whom the document is produced that it is false or misleading
and the respect in which it is false or misleading and
- providing
correct information to that person if the person producing the document is in
possession of, or can reasonably acquire, the correct information.
In this case, the maximum penalty for the offence is 60
penalty units.[77]
What the
Bill does
The 2013 Amendment Act introduced a range of
enforcement options for the APVMA which included seeking civil penalty orders,
issuing infringement notices, accepting and enforcing undertakings, seeking
injunctions, requiring claims to be substantiated and issuing formal warnings.
However, there was no legislative link from the two
offences created by section 69ER of the Administration Act to a right to
seek civil penalty orders.
Item 27 of Part 5 of the Bill addresses this
problem by inserting proposed subsections 69ER(3)–(5) into the Administration
Act.
Proposed subsections 69ER(3) and (4) are in
equivalent terms to existing subsections 69ER(1) and (2) respectively. Proposed
subsection 69ER(5) of the Administration Act specifies that those
subsections are civil penalty provisions. Accordingly if they are breached, the
APVMA may apply to a court of competent jurisdiction for an order that a person
pay the Commonwealth a pecuniary penalty.[78]
Item 29 of Part 5 of the
Bill amends the equivalent offences for false and misleading information in the
Agvet Code by inserting proposed subsections 146(3)–(5) which are in
similar terms to proposed subsections 69ER(3)–(5) being inserted into
the Administration Act. The difference between the provisions is that
proposed subsection 146(3) makes reference to matters referred to in
section 5A,[79]
5B,[80]
5C[81]
or 5D[82]
or subsection 123(1)[83]
of the Agvet Code rather than to Part 7A, Part 7AA or Part 7AB of the Administration
Act.
Amount of civil
penalty
The amount of the pecuniary penalty is worked out under
section 69EJA of the Administration Act. Importantly, it applies not
only to persons but to bodies corporate.
Subsection 69EJA(1) of that Act provides that the
pecuniary penalty for a contravention of a civil penalty provision by a body
corporate must not exceed five times the amount of the maximum monetary penalty
that could be imposed by a court if the body corporate were convicted of an
offence constituted by the same conduct. Subsection 145AA(1) of the Agvet Code
is in equivalent terms. This means that for a contravention of proposed
subsection 69ER(3) of the Administration Act or proposed
subsection 146(3) of the Agvet Code, a body corporate would be liable for a
maximum penalty of 7,500 penalty units—being $1,575,000. For a contravention of
proposed subsection 69ER(4) of the Administration Act or proposed
subsection 146(4) of the Agvet Code, a body corporate would be liable for a
maximum penalty of 1,500 penalty units—being $315,000.
In addition, subsection 69EJA(2) of the Administration
Act and subsection 145AA(2) provides that the penalty for an individual for
contravening a civil penalty provision must not exceed three times the amount
of the maximum monetary penalty that could be imposed by a court on an
individual convicted of an offence constituted by the same conduct. This means
that for a contravention of proposed subsection 69ER(3) of the Administration
Act or proposed subsection 146(3) of the Agvet Code, an individual would
be liable for a maximum penalty of 900 penalty units—being $189,000. For a
contravention of proposed subsection 69ER(4) of the Administration
Act or proposed subsection 146(4) of the Agvet Code, an individual
would be liable for a maximum penalty of 180 penalty units—being $37,800.
Problems that are addressed by civil penalties
Prior to the enactment of the 2013 Amendment Act
all of the offences in the Agvet Code were criminal offences—most (but not all)
of which were strict liability offences. The standard of proof in a criminal
case is ‘beyond a reasonable doubt’. To establish an offence of strict
liability it is only necessary to prove that the relevant conduct or event took
place. However the defence of ‘mistake of fact’ (honest and reasonable mistake)
is open to those who mistakenly but reasonably believe certain facts to exist
which, if true, would have shielded them from liability. Those offences, if
proven, generally allowed for financial penalties to be paid rather than
imposing a term of imprisonment.
Unfortunately, the APVMA had limited success in
prosecuting holders of registrations and approvals in circumstances where
alleged breaches of the Agvet Code had occurred.[84]
That being the case, the 2013 Amendment Act provided for existing
offence provisions to also be civil penalty provisions to enable the APVMA to
apply to the court for a civil penalty order against a person who has
contravened a civil penalty provision. In that case, the standard of proof is
lower being ‘on the balance of probabilities’.
The tension within the Agvet statutes, then, is that a pecuniary penalty may be higher than an amount payable as a fine were
the person is prosecuted under a criminal offence, even though the conduct is
essentially the same.[85]
Stakeholder comments
Few of the stakeholders commented on these
amendments. CropLife Australia supported the measure on the grounds that the
newly created civil penalties for giving false and misleading information are
similar to those in the Biosecurity
Act 2015.[86]
On the other hand, the VMDA stated that it
did not support the proposal as matters relating to false and misleading
statements are regulated by the Australian Consumer Law (located in Schedule 2
of the Competition and Consumer Act 2010).[87] However, reliance on the Competition
and Consumer Act would have the
effect of removing this aspect of the regulation of agvet chemicals from the
jurisdiction of the APVMA.
Part 6—notification
about variation to Maximum Residue Limits Standard
Commencement
The amendments in Part 6 of the Bill commence on the day
after Royal Assent.
Background
The APVMA registers and approves all agvet chemicals in
Australia and sets maximum residue limits (MRLs) for these chemicals. Levels
are set based on how much of the chemical is needed to control pests and/or
diseases. The product's chemistry, metabolism, analytical methodology and residue
trial data are also assessed.[88]
The MRLs apply to agvet chemicals in agricultural produce—particularly
produce entering the food chain. They are set at levels that are not likely to
be exceeded if the agricultural or veterinary chemicals are used in accordance
with approved label instructions.[89]
Current law
Existing subsection 8E(1) of the Agvet Code requires the
APVMA to notify Food Standards Australia New Zealand (FSANZ) if an approval,
registration, variation or permit proposed under the Code would be likely to
require a variation to the Maximum Residue Limits Standard.[90]
Currently the notice must be given to FSANZ within 28 days after the APVMA
completes a preliminary assessment of the application.[91]
That notification triggers the process to be carried out by
FSANZ including the preparation of a dietary exposure assessment of the
proposed variation, any relevant consultation about the dietary exposure
assessment and the eventual publication of the variation.[92]
What the
Bill does
Item 31 of Part 6 of the Bill repeals and replaces
paragraph 8E(2)(c) of the Agvet Code so that the notice is to be given to FSANZ
before the approval, registration, variation or permit is given, made or
issued.
According to the Explanatory
Memorandum to the Bill this will ‘provide the APVMA and FSANZ with the
flexibility to agree on appropriate timeframes for notification’.[93]
Other
provisions
The provisions in Parts 7 and 8 of the Bill commence on
the day after Royal Assent.
Item 33 of Part 7 of the Bill amends the definition
of expiry date in section 3 of the Agvet Code to omit the
reference to ‘should’ and substitute a reference to ‘must’. This is intended to
ensure that the definition ‘reflects the timeframe in which the use of a
chemical product is safe, effective and does not cause unmanageable risks’.[94]
Item 35 of Part 8 of the Bill repeals Part 7B
of the Administration Act as it is now redundant.
Concluding comments
It would appear
that a number of problems with the regulation of agvet chemicals are
long-standing. Some stakeholders who commented in relation to this Bill
were critical that the efficiencies which were supposed to be achieved by the 2013
Amendment Act have not been delivered.[95]
That being the case, their frustrations pre-date the Order for the APVMA to
relocate to Armidale which seems to have been the source of considerable angst
for both agvet chemical users and manufacturers.
According to the Minister for Agriculture and Water
Resources, Barnaby Joyce, the Bill is a response to the chemical industry which
has sought ‘simple non-controversial changes ... that improve the efficiency of
the regulator and increase the speed to which farmers can get access to safe
effective chemicals’.[96]
Consistent with that chemical industry request, the Bill
delivers small changes. However, those changes do not address the larger
problem of the efficiency and efficacy of the APVMA at the current time.
Members, Senators and Parliamentary staff
can obtain further information from the Parliamentary Library on (02) 6277 2500.
[1]. Department
of Agricultural and Water Resources (DoAWR), ‘The
National Registration Scheme’, DoAWR website, last reviewed
16 October 2015.
[2]. Explanatory
Memorandum, Agricultural and Veterinary Chemical Legislation Amendment Bill
2012, p. 9.
[3]. Australian
National Audit Office (ANAO), Pesticide and
veterinary medicine regulatory reform, Audit report, 56, 2016–17, ANAO,
Barton, 2017, p. 7.
[4]. ANAO,
Regulation
of pesticides and veterinary medicines, Audit report, 14, 2006–07,
ANAO, Barton, 2006.
[5]. Productivity
Commission (PC), Chemicals
and plastics regulation, Research report, PC, Canberra, July 2008.
[6]. For
example, D Jopson and R Pollard, ‘Name
your poison—it’s legal’,
The Sydney Morning Herald, 22 October 2007, p. 1; D Jopson, ‘Banned
chemical on shelves despite fears it can harm health’, The Sydney Morning Herald, 22
October 2007, p. 15; M Denholm, ‘Regulator stalls on
review of weed killer’,
The Australian, 27 June 2008, p. 8.
[7]. Parliament
of Australia, ‘Agricultural
and Veterinary Chemicals Legislation Amendment Bill 2013 homepage’, Australian
Parliament website.
[8]. ANAO, Pesticide and
veterinary medicine regulatory reform, op. cit., p. 17. For further
details of the amendments see P Pyburne, Agricultural
and Veterinary Chemicals Legislation Amendment Bill 2012, Bills digest,
89, 2012–13, Parliamentary Library, Canberra, 2013.
[9]. Revised Explanatory
Memorandum, Agricultural and Veterinary Chemicals Legislation Amendment
Bill 2013, p. 1.
[10]. T
Abbott (Prime Minister) and B Joyce (Minister for Agriculture), Agricultural
Competitiveness White Paper—stronger farmers, stronger economy, joint
media release, 4 July 2015, p. 1.
[11]. Australian
Government, Agricultural
competitiveness white paper: stronger farmers: stronger economy,
Commonwealth of Australia, 2015, p. 37.
[12]. Ibid.,
p. 38.
[13]. S
Morrison (Treasurer) and B Joyce (Minister for Agriculture and Water
Resources), Productivity
Commission to examine regulation of Australian agriculture, joint media
release, 20 November 2015.
[14]. PC,
Regulation
of Australian agriculture, Inquiry report, 79, 2016, PC, Canberra,
2017.
[15]. Control-of-use
regimes are regimes controlling the use of chemical products after retail sale.
[16]. Ibid.,
p. 291.
[17]. Australian
Government, ‘Part
2: expense measures’, Budget measures: budget paper no. 2: 2016–17,
p. 65.
[18]. DoAWR,
‘Agricultural
and Veterinary Chemicals Legislation Amendment (Operational Efficiency) Bill
2017’, DoAWR website, last reviewed 26 October 2017.
[19]. DoAWR,
Consultation
on the Agricultural and Veterinary Chemicals Legislation Amendment (Operational
Efficiency) Bill 2017, Agvet Chemicals Branch, Sustainable Agriculture,
Fisheries and Forestry Division, p. 1.
[20]. DoAWR,
‘Agricultural
and Veterinary Chemicals Legislation Amendment (Operational Efficiency) Bill
2017’, op. cit.
[21]. DoAWR,
Consultation
on the Agricultural and Veterinary Chemicals Legislation Amendment (Operational
Efficiency) Bill 2017, op. cit., p. 2.
[22]. Ibid.,
p. 1.
[23]. Senate
Rural and Regional Affairs and Transport Legislation Committee, Official
committee Hansard, 25 May 2017, p. 17.
[24]. Ibid.,
p. 8.
[25]. Senate
Standing Committee for Selection of Bills, Report,
15, 2017, The Senate, Canberra, 7 December 2017.
[26]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 13, 2017, The Senate, 15 November 2017, p. 1.
[27]. Explanatory
Memorandum, Agricultural and Veterinary Chemicals Legislation Amendment
(Operational Efficiency) Bill 2017, p. 1.
[28]. The
Statement of Compatibility with Human Rights can be found at pages 33–62 of the
Explanatory
Memorandum to the Bill.
[29]. Parliamentary
Joint Committee on Human Rights, Twelfth
report of the 45th Parliament, 28 November 2017, p. 96.
[30]. Collection
of Levy Act, subsection 12B(1). Section 12C sets out the formula for
calculating the amount of the levy based on the total leviable value in respect
of the product for the financial year and the rate of the levy. The rate of the
levy is set in regulation 6A of the Agricultural and
Veterinary Products (Collection of Levy) Regulations 1995.
[31]. Collection
of Levy Act, subsection 12B(2).
[32]. Collection
of Levy Act, subsection 3(1).
[33]. Collection
of Levy Act, proposed subsection 35(3). The imposition of strict
liability means that a fault element does not need to be satisfied, but the
offence will not criminalise honest errors and a person cannot be held liable
if he, or she, had an honest and reasonable belief that they were complying
with relevant obligations.
[34]. Under
section 4AA of the Crimes
Act 1914 a penalty unit is equivalent to $210. This means that the
maximum penalty is $10,500. Subsection 4B(3) of the Crimes Act
provides that the maximum penalty that may be imposed on a body corporate is
five times the maximum penalty that could be imposed on an individual convicted
of the same offence. Accordingly, the maximum pecuniary penalty for a
corporation is $52,500.
[35]. Collection
of Levy Act, proposed subsection 35(4).
[36]. Administration
Act, subsection 69EJ(1). Subsection 69EJA(1) of the Administration Act sets
out the maximum amount of the penalty for a body corporate, which is five times
the maximum monetary penalty that could be imposed if the body corporate was
convicted of an offence constituted by the same conduct. As explained in
footnote 34, the maximum penalty that could be imposed on a corporation for an
offence against proposed subsection 35(1) is $52,500. This means that the
maximum civil penalty that can be imposed on a corporation is $262,500.
Subsection 69EJA(2) of the Administration Act sets out the maximum
amount of the penalty for an individual, which
is three times the maximum monetary penalty that could be imposed if the individual
was convicted of an offence constituted by the same conduct. This means that
the maximum civil penalty that can be imposed on an individual is $31,500.
[37]. Collection
of Levy Act, proposed subsection 35(2). See regulation 4.10 of the Agricultural and
Veterinary Chemicals (Administration) Regulations 1995.
[38]. Explanatory
Memorandum, Agricultural and Veterinary Chemicals Legislation Amendment (Operational
Efficiency) Bill 2017, p. 8.
[39]. Collection
of Levy Act, proposed subsection 35(5).
[40]. Active
constituent, in relation to a proposed or existing agricultural
chemical product or veterinary chemical product, means the substance that is,
or one of the substances that together are, primarily responsible for the
biological or other effect identifying the product as an agricultural chemical
product or a veterinary chemical product, as the case may be. See section 3 of
the Schedule to the Code Act.
[41]. Collection
of Levy Act, proposed subsection 37(2). See footnote 34 for more
information on penalties for individuals and corporations.
[42]. Collection
of Levy Act, proposed subsection 37(3). This replicates the existing
penalty which is imposed under section 69EA of the Administration Act in
respect of annual returns that are required under section 69E of the Administration
Act—which is to be repealed. See footnote 36 for more information on the
quantum of the penalties.
[43]. Australian
Dairy Industry, Submission
to the Department of Agriculture and Water Resources, Consultation on the
Agricultural and Veterinary Chemicals Legislation Amendment (Operational
Efficiency) Bill 2017, July 2017, p. 2; Animal Medicines Australia, Submission
to the Department of Agriculture and Water Resources, Consultation on the
Agricultural and Veterinary Chemicals Legislation Amendment (Operational
Efficiency) Bill 2017, 19 July 2017, p. 3; Competitive Advantage, Submission
to the Department of Agriculture and Water Resources, Consultation on the
Agricultural and Veterinary Chemicals Legislation Amendment (Operational
Efficiency) Bill 2017, 19 July 2017, p. 1.
[44]. CropLife
Australia, Submission
to the Department of Agriculture and Water Resources, Consultation on the
Agricultural and Veterinary Chemicals Legislation Amendment (Operational
Efficiency) Bill 2017, 19 July 2017, p. 3.
[45]. VMDA,
Submission
to the Department of Agriculture and Water Resources, Consultation on the
Agricultural and Veterinary Chemicals Legislation Amendment (Operational
Efficiency) Bill 2017, n.d., p. 3.
[46]. M
Kelly (Director, Reform Development and Implementation, Department of
Agriculture, Fisheries and Forestry), Evidence
to the Rural and Regional Affairs and Transport Legislation Committee, Inquiry
into the Agricultural and Veterinary Chemicals Legislation Amendment Bill 2012,
Senate, Hansard, 4 February 2013, p. 56.
[47]. The
Agvet Code is located as Schedule 1 to the Code Act. Agvet Code, section
8A.
[48]. Agvet
Code, subsection 11(1).
[49]. Agvet
Code, paragraph 11(2)(a). Agvet Code, section 156A operates so that if the
APVMA is required to give a person information in writing, the requirement will
be taken to have been met if the person consents to the information being given
electronically and it is so given, the information includes the Chief Executive
Officer’s electronic signature and, in the event of a breach of a civil penalty
provision (arising from a person’s failure to do, or not do, a thing set out in
the information), the APVMA has in place systems for proving the person
received the information.
[50]. Agvet
Code, paragraph 11(2)(b).
[51]. Agvet
Code, subsection 11(3).
[52]. Agvet
Code, section 28.
[53]. Agvet
Code, subsection 3(1) defines a holder as (a) in relation to an
approval or registration: the person entered in the Record, Register or
relevant APVMA file as the holder of the approval or registration; if the
holder was an individual who has died or is an individual whose affairs are
being lawfully administered by another person—the legal personal representative
of the individual or the person administering the individual’s affairs or if
the holder was a body corporate—a successor in law of the body corporate or (b)
in relation to a permit or licence: the person to whom the permit or licence
was issued.
[54]. Agvet
Code, subsection 27(1).
[55]. Agvet
Code, subsection 27(3).
[56]. CropLife
Australia, Submission
to the Department of Agriculture and Water Resources, op. cit., p. 4.
[57]. Competitive
Advantage, Submission
to the Department of Agriculture and Water Resources, op. cit., p. 1.
[58]. VMDA,
Submission
to the Department of Agriculture and Water Resources, op. cit., p. 3.
[59]. Australian
Pesticides and Veterinary Medicines Authority (APVMA), ‘Permits’, APVMA website, last updated 1
July 2014.
[60]. Agvet
Code, section 110.
[61]. Agvet
Code, section 110A.
[62]. Agvet
Code, subsections 110A(3) and (4).
[63]. Agvet
Code, subsection 27(1).
[64]. Agvet
Code, subsection 29(2).
[65]. Explanatory
Memorandum, Agricultural and Veterinary Chemicals Legislation Amendment
(Operational Efficiency) Bill 2017, p. 18.
[66]. See
for example: Grain Producers Australia, Submission
to the Department of Agriculture and Water Resources, Consultation on the
Agricultural and Veterinary Chemicals Legislation Amendment (Operational
Efficiency) Bill 2017, p. 7; Australian Dairy Industry, Submission
to the Department of Agriculture and Water Resources, op. cit., p. 2.
[67]. Agvet
Code, section 36.
[68]. Agvet
Code, subsection 41(2).
[69]. Agvet
Code, subsection 43(2).
[70]. Agvet
Code, section 45. Agvet Code, section 21 sets out how approval of a label takes
place.
[71]. Explanatory
Memorandum, Agricultural and Veterinary Chemicals Legislation Amendment
(Operational Efficiency) Bill 2017, p. 21.
[72]. Agvet
Code, suspension of an approval or a registration may be made under section 36,
subsection 41(2) or subsection 44(2).
[73]. Under
section 4AA of the Crimes
Act 1914, a penalty unit is equivalent to $210. This means that the
maximum penalty for the offence is $63,000. Subsection 4B(3)
of the Crimes Act provides that the maximum penalty that may be imposed
on a body corporate is five times the maximum penalty that could be imposed on
an individual convicted of the same offence. Accordingly, the maximum pecuniary
penalty for a corporation is $315,000.
[74]. Administration
Act, subsection 69B(1B).
[75]. Administration
Act, subsection 69ER(1). See footnote 73 for more information on penalties
for individuals and corporations.
[76]. Other
than section 69B, which is covered by subsection 69ER(1).
[77]. Administration
Act, subsection 69ER(2). The maximum penalty is equivalent to $12,600 for
an individual and $63,000 for a corporation.
[78]. Administration
Act, subsection 69EJ(1). The amount of the pecuniary penalty is worked out
under section 69EJA of the Administration Act (as discussed further
below).
[79]. Section
5A of the Agvet Code sets out the matters to be considered in determining
whether an active constituent or chemical product meets the safety
criteria.
[80]. Section
5B of the Agvet Code sets out the matters to be considered in determining
whether a chemical product meets the efficacy criteria.
[81]. Section
5C of the Agvet Code sets out the matters to be considered in determining
whether a chemical product meets the trade criteria.
[82]. Section
5D of the Agvet Code sets out the matters to be considered in determining
whether a label for containers of a chemical product meets the labelling criteria.
[83]. Subsection
123(1) of the Agvet Code sets out the matters to be considered in determining
whether a licence to carry out steps in the manufacture of chemical products at
particular premises must be issued.
[84]. For
example Australian Pesticide and Veterinary Medicines Authority v Administrative
Appeals Tribunal, [2008] FCA
1393 (12 September 2008).
[85]. Although
additional, non-monetary consequences, such as a criminal record, flow from
conviction for a criminal offence.
[86]. CropLife
Australia, Submission
to the Department of Agriculture and Water Resources, op. cit., p. 5.
[87]. VMDA,
Submission
to the Department of Agriculture and Water Resources, op. cit., p. 5.
[88]. Food
Standards Australia New Zealand (FSANZ), ‘Chemicals
in food—maximum residue limits’, FSANZ website, May 2017.
[89]. APVMA,
‘Pesticides and veterinary residues’,
APVMA website, 9 March 2017.
[90]. Subsection
82(3) of the Food
Standards Australia New Zealand Act 1991 contains similar requirement.
[91]. Agvet
Code, subparagraph 8E(2)(c)(i).
[92]. FSANZ
Act, section 82.
[93]. Explanatory
Memorandum, Agricultural and Veterinary Chemicals Legislation Amendment
(Operational Efficiency) Bill 2017, p. 29.
[94]. Ibid.,
p. 30.
[95]. For
example: Grain Producers Australia, Submission
to the Department of Agriculture and Water Resources, op. cit., 19 July 2017,
p. 3; CropLife Australia, Submission
to the Department of Agriculture and Water Resources, op. cit., 19 July 2017,
p. 1.
[96]. B
Joyce (Minister for Agriculture and Water Resources), ‘Second
reading speech: Agricultural and Veterinary Chemicals Legislation Amendment
(Operational Efficiency) Bill 2017,’ House of Representatives, Debates,
25 October 2017, p. 11889.
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