This chapter examines the key issues raised in submissions received by the committee.
The chapter first sets out the support received for the broad intentions of the bills from a range of stakeholders. Following this, it discusses some of the concerns raised about the bills by stakeholders before setting out the committee’s views and recommendations.
Support for the bill
Evidence received by the committee showed support for the ICEMR Bill’s broad intentions to address the environmental risks associated with the use of industrial chemicals and to establish a more consistent approach to the management of industrial chemicals across jurisdictions. Additionally, there was a general understanding of the need for a cost-recovery mechanism to underpin the bill’s implementation.
For example, Accord Australasia Limited (Accord)—the peak national industry association representing manufacturers and marketers of hygiene, personal care and specialty products, their raw materials suppliers and service providers—summarised its position which included general support for the ICEMR Bill:
Accord supports the introduction of the governing legislation to establish this new framework for a nationally uniform approach for the environmental risk management of industrial chemicals…
We support the ICEMR Bill 2020 being passed as written.
Additionally, the Vinyl Council of Australia (VCA)—the peak body for the vinyl industry in Australia representing importers of resins and intermediate chemicals—showed support for the broad intentions of the bills:
We support the need to reduce impacts from industrial chemicals use on human health and the environment… [and] we recognise the intention that annual scheduling charges on registered introducers of industrial chemicals should be implemented on a government cost recovery basis.
Chemistry Australia—the peak national body representing the chemistry industry—indicated support for the passage of the ICEMR Bill on the basis that it is to be implemented in a uniform and harmonised manner by all Australian jurisdictions. Chemistry Australia noted specific elements of the bills it supported, including:
the protection of the environment through the appropriate management of risks posed by industrial chemicals;
the establishment of nationally consistent, transparent, predictable, streamlined and efficient approaches to the environmental risk management of industrial chemicals;
the elements of the bill that provide the framework for Australia to ratify and give effect to the decisions made under the Stockholm Convention on Persistent Organic Pollutants and other international agreements; and
the principles of cost recovery as a means to deliver efficient and effective regulatory systems as well as ensure that those that benefit from regulatory schemes contribute appropriately to the cost of administering those schemes.
Evidence received by the committee demonstrated that the government has undertaken significant consultation in the development of the bills.
In its submission, the Department of Agriculture, Water and the Environment (the Department) stated:
The development and design of the legislative framework has been informed by extensive stakeholder consultation. The Australian Government has been collaborating on this reform with state and territory governments and industry groups for over a decade…
Consultation has included publication of regulation impact statements, two national roadshows in Australian capital cities, working with stakeholders on the criteria for decision-making and risk management responses, and numerous meetings with industry, community groups and states and territories over the years.
The former Department of Environment and Energy set out the consultation process, following agreement by environment ministers in 2015 to establish a national standard, which shaped the development of the ICEMR package of bills:
A draft National Standard for Environmental Risk Management of Industrial Chemicals was developed. We consulted stakeholders on its design and processes from 2015 to 2018.
We released draft legislation to set up the National Standard for public consultation from 7 January to 21 February 2020…
We received 11 formal responses. Submissions were made by national bodies, government agencies, and other interested organisations and individuals.
For example, Accord referred to its engagement in providing a submission to the Exposure Draft where it:
…welcomed the professional and informative engagement received from relevant Departmental officers in discussing with us questions and concerns we raised in our February  submission.
Via these discussions with the Department, we have a better understanding of the rationale for the Environment Minister to be the primary decision-maker.
The Department also signalled ways in which its consultation would be ongoing in the implementation of the bills:
The department continues to work with stakeholders, particularly in developing the instruments and operational policy, prioritising chemicals for consideration under the Bill, and ensuring national consistency implementing the reforms across jurisdictions. Consultation with affected stakeholders will be ongoing as the Bill provides for mandatory consultation on decisions and decision-making criteria (known as the Principles).
In this regard, the structure of the ICEMR Bill requires consultation with states and territories and the public at various decision-making points. For example, according to the Department, stakeholders have been:
…consulted extensively on the draft Principles and the Bill requires a further mandatory 20-day public consultation period before the Minister makes, varies or revokes the Principles. The making of the Principles is expected to take place shortly after the passage of the Bill. Draft Principles can be found on the department’s website.
Details on the consultation processes contained within the bills are also discussed in chapter 1 as well as later in this chapter, particularly in relation to the charge-related bills.
As outlined above, evidence received by the committee was generally supportive of the ICEMR Bill's broad intentions. However, some stakeholders flagged concerns with the bills which this section will discuss in turn. These concerns included:
the adoption and implementation of the national register being a decision for each state and territory jurisdiction;
a range of trepidations relating to the ICEMR Charges Bills;
the timing and timeline of the bills; and
the inclusion of human health in the bill and consultation with State Health Ministers.
Adoption of the Register a decision for each jurisdiction
A number of submissions queried the effectiveness of relying on individual jurisdictions to adopt and implement the national register, given the objectives of the bill.
Haztech Environmental, for example, raised concern that the Register can only be acted on once state and territories also agree to the Register. It claimed that this risked the ICEMR Bill’s objective ‘to give effect to an intergovernmental scheme involving the Commonwealth and the States that relates to the establishment of nationally consistent standards to minimise risks to the environment from industrial chemicals.’
Mr Andrew Gowans—with background in environmental management, waste management and chemicals—also questioned the ICEMR Bill’s ability to achieve tangible environment outcomes for Australia based on that fact that implementation of the Register is left to the states and territories.
In its submission, Chemistry Australia spoke to the fact that the Register is only enforceable to the extent that it is adopted by state and territory jurisdictions and that the success of the scheme is entirely dependent upon its uniform adoption, recommending that:
…consideration should be given to incorporating a provision in the Bills that delays commencement of the scheme until implementing legislation has been passed by every state and territory. This would encourage all states and territories to promptly enact legislation to implement the scheme and avoid a situation under which different rules might continue to apply across jurisdictions for some time.
Chemistry Australia also raised the concern that:
The cost recovery arrangements outlined in the ICEMRB are also premised on the expectation that all states and territories will implement the scheme established by the Bills. Under the proposed arrangements, businesses operating in a jurisdiction that does not implement the scheme may be required to pay for a scheme that has no application to their business operations.
In its submission, the Department provided reassurance on the anticipated cross-jurisdictional implementation of the Register:
The department has been working closely with states and territories to ensure consistent implementation of the National Standard… This work is ongoing, and this collaborative effort will ensure a nationally consistent, predictable and streamlined environmental management framework for industrial chemicals.
The Australian Government is committed to implementing the Register in areas of Commonwealth responsibility. This includes developing new legislation for the use, handling and disposal of chemicals on Commonwealth land…
The committee notes the concerns from some submitters regarding the adoption of the Register being a decision for each jurisdiction. In Australia, under the federal system of government, responsibility for regulating industrial chemicals is shared between the Commonwealth and state and territory governments. There has been broad support for improvement to the environmental risk management of industrial chemicals, particularly in relation to addressing fragmentation and inefficiencies across jurisdictions. Discussions at COAG began as far back as 2008 following the Productivity Commission’s report when the regulation of chemicals was identified as a priority area for reform. Cross-jurisdictional agreement was reached in 2015 when environment ministers from the Commonwealth and all states and territories approved the development of a cooperative framework to establish a national standard for the management of industrial chemicals. It was agreed by environment ministers that a National Standard would be established under Commonwealth legislation and subsequently implemented by each state and territory.
Based on the initial agreement by the states and territories, which underpinned the development of the bills, and their continued engagement, it is reasonable to expect that each jurisdiction will participate in the national register and adopt the standards into their respective regulatory frameworks.
The committee also notes the reassurance provided in the Department’s submission which states that it has been working closely with states and territories to ensure consistent implementation of the National Standard.
The committee recommends that the government and the Department continue to actively engage state and territory governments, particularly around planning for the adoption of the Register in their respective jurisdictions.
Concerns relating to the ICEMR Charges Bills
A number of submissions raised concerns about the ICEMR Charges Bills, including:
the disproportionate cost-impact on small businesses;
consultation with industry on the cost-recovery arrangements; and
the interaction between, and the potential for duplication across, the Australian Industrial Chemicals Introduction Scheme (AICIS) and the bills.
In its submission, VCA acknowledged the need for cost-recovery charges in the bills, however noted that this would potentially burden small businesses who have been disproportionately impacted by the new registration charges introduced in the shift from the former National Industrial Chemicals Notification and Assessment Scheme (NICNAS) to the AICIS in July 2020. Therefore, it requested that consideration be given to providing ‘a level of protection or buffer for small businesses whose introductions of chemicals are less than $50 million p.a. to ensure they do not bear an undue burden in AICIS charges relative to the major global chemical trading companies.’
Accord raised some concerns about the perceived lack of consultation with industry regarding ‘the estimated costs relating to various new functions, staffing and other arrangements that will be put in place by the ICEMR Bill’ and stated that there should be ‘thorough and meaningful consultation with industry on the financials and cost-recovery arrangements for this new regulatory regime.’
Chemistry Australia raised concern in relation to how the ICEMR Bills intersect with the current role of AICIS in carrying out risk assessments and what this would mean for cost-recovery and the impact on industry:
…the ICEMRB scheme and the AICIS are inextricably linked. It is the risk assessments carried out under the AICIS that will give rise to most of the decisions made under the ICEMRB. The current fees and charges imposed on industry under the AICIS already incorporate elements of cost recovery for the environmental assessment of industrial chemicals. Chemistry Australia questions whether it is necessary to establish a separate cost recovery scheme under the ICEMRB. While the collection of the ICEMRB fee might be managed as part of the annual AICIS fee payment arrangements, a separate cost recovery scheme will still require additional work by the Department, including the preparation of annual cost recovery impact statements and consultations with stakeholders. It will also impose additional burdens on industry. The costs associated with the cost recovery regime may well end up being a significant part of the costs of administering the Register.
Accord’s submission also raised questions about how the relationship between AICIS and the ICEMR Bills would operate, noting that it is likely not widely understood that the Department ‘already provides outsourced functions, at considerable cost, to AICIS for the performance of environmental risk assessment on introduced industrial chemicals’ and that ‘these costs are of course fully cost-recovered from industry businesses under the AICIS scheme.’ As such, Accord pointed to the importance of transparency and disclosure regarding costing arrangements and the need to avoid duplication and other administrative inefficiencies as these two schemes are intertwined.
The Scrutiny Committee also raised concerns regarding the ICEMR Charges Bills, particularly in relation to the rate of charges being set in delegated legislation and asked whether more specific information on the charging arrangements could be included in the bills.
In response to the Scrutiny Committee’s request for advice on the ICEMR Charges Bills, the Minister referred to the bill’s explanatory memorandum which referenced the Australian Government Charging Framework and the Australian Government Cost Recovery Guidelines. Under this guidance, it is a requirement that the charges applied to be no more than the likely costs associated with making, varying or revoking scheduling decisions under the scheme.
The Minister also provided some important clarifications regarding how the charges would be administered:
Consistent with Australian Government policy, the amount of any applicable charge will be determined through a Cost Recovery Implementation Statement (CRIS). All government cost recovered activities must be documented in a CRIS before charging regulations are made and charging can begin. The CRIS will be released for public consultation and include the method of calculation of the charges which will be discussed with stakeholders. Therefore, the method of calculation of charges or the maximum charge will not be able to be included in the bills themselves before this process is completed.
In addition, the Department of Finance must be satisfied that the charge is set at a level that is designed to recover no more than the full and efficient costs of the administration of the framework. The Finance Minister must also agree to the final CRIS. Financial performance of the cost recovery arrangement will be monitored on an ongoing basis and the CRIS may be updated annually as required to show the actual expense and cost recovery revenue.
The Minister concluded by stating: ‘on this basis and considering the rigorous processes already in place to ensure the appropriateness of cost recovered charges, I do not consider it necessary to amend the bills.’
The Department’s submission provided clarification on the process and anticipated timeline for the implementation of the charges following the passage of the bills. In order to streamline the cost-recovery process and minimise administrative burden for industry, the scheduling charge would be collected by AICIS on behalf of the Department alongside existing charging arrangements under the Industrial Chemicals Act 2019. The expected timeline for the commencement of charging is 1 September 2021, contingent on the passage of the bills and sufficient time for finalising consultation on charging arrangements and to make the charging regulations. It is also noted that this date aligns with the AICIS registration year and that the rates for ICEMR charges will be decided following consultation with industry.
The committee notes the concerns raised by VCA and Accord in relation to the ICEMR Charges Bills and refers to the Minister’s response to the Scrutiny Committee where it was explained that the amount of the applicable charge will be determined through a CRIS which will be released for public consultation. The method of calculating the charges will also be included in the CRIS and discussed with stakeholders.
In relation to the questions that arose about the interaction between AICIS and the ICEMR Bills, the committee notes the Explanatory Note to the Exposure Draft which explained that the bills build on the recent reform which transitioned NICNAS into AICIS. The ICEMR Bills have been designed to work in conjunction with the mechanisms under the Industrial Chemicals Act 2019, to avoid duplication. An Attachment in the Department’s submission (see Appendix 2) provided a useful graph depicting how scheduling decisions would be made under the ICEMR Bills and refers to existing processes by AICIS. Details pertaining to AICIS’s cost-recovery model and fees and charges review processes, which are conducted periodically, are available in AICIS’s Cost Recovery Implementation Statement 2020-21. The committee encourages the Department to engage with stakeholder further to ensure there is a clear understanding of how the existing processes under AICIS will intersect and work with the mechanisms created by the ICEMR Bills.
On the Scrutiny Committee’s request for additional information on the ICEMR Charges Bills, the committee notes the Minister’s response to the Scrutiny Committee which provided additional detail on the cost-recovery arrangements. On delegated legislation, the committee points to the successful discussions with industry stakeholders conducted by the Department on this issue, such as in the example provided earlier where Accord recounted where the Department provided ‘professional and informative engagement’ which resulted in a ‘better understanding of the rationale for the Environment Minister to be the primary decision-maker’.
The committee recommends that the Department of Agriculture, Water and the Environment continue its engagement with industry stakeholders in the implementation of the ICEMR Bills, particularly with reference to the cost‑recovery arrangements and the role of AICIS.
Timing and timeline of the bills
The timing and timeline of the bills was raised as an issue by some submitters, including the bill’s proximity to the recent transition from NICNAS to the AICIS, the impact of COVID-19 on affected businesses, and the expected timeline set-out for the implementation of the bill once passed.
Accord raised concerns about the timing of the implementation of the ICEMR Bill given the industry has been grappling with the recent changes involved in transitioning from NICNAS to AICIS, which was compounded by the challenges faced by industry as a result of the COVID-19 pandemic, and has therefore asked for an appropriate transition period to be considered:
While Accord supports the passage of the framework ICEMR Bill 2020 legislation, we caution that our industry is already struggling with the new AICIS scheme requirements and that therefore implementation of the regulations/rules for this new regulatory regime needs to be considered, sensible and provide appropriate transition periods…
Industry businesses were surprised and dumbfounded by the percentage of increases in charges introduced by the AICIS scheme in August last year , in the height of the pandemic…
Hence, there is a wariness and lack of trust about the potential cost imposts facing industry businesses from this new regulatory regime, especially as it now appears to be inextricably linked to the AICIS scheme…
However, we note that in the Explanatory Memorandum for these Bills it is explained that the charges can be set to “nil amount”. And this is exactly what Accord asks for in the foreseeable period, as businesses continue to weather the pandemic.
In his submission, Mr Gowans suggested that the timeline set-out for implementation of the bills ‘grossly overestimated the ability for States and Territories to “roll out new systems in their regulatory frameworks”…’
The committee again notes the consultation process outlined by the Minister regarding the CRIS to address the concern raised by Accord regarding the timing of the bills.
On the anticipated timeline for the bill’s implementation, the committee notes the Department’s submission which explains that the timeline is contingent on sufficient time for finalising prescribed consultations. However, importantly, it is worth noting again the extensive consultation, discussion and planning that has occurred between the Commonwealth and states and territories over more than a decade on the design and expectations of the national framework that is established in the ICEMR Bill. With this in mind, it is reasonable to expect that many states and territories have engaged in substantial planning for their respective legislative requirements.
Inclusion of human health and consultation with State Health Ministers
The Western Australian Department of Health (Department of Health WA) raised a concern regarding the definition of ‘environment’ and asked whether it sufficiently covered the impact of industrial chemicals on human health. The Department of Health WA recommended the explicit acknowledgement of human health in the Objects of the Act, suggesting the following addition to Section 3(a):
To give effect to an intergovernmental scheme involving the Commonwealth and the States that relates to the establishment of nationally consistent standards to minimise risks to the environment, including human health, from industrial chemicals.
The Department of Health WA also noted that the bills require the Minister to consult with State Environment Ministers, however it pointed out that ‘in many jurisdictions, environmental health sits within health departments so consultation with State Health Ministers should also be required.’
On the inclusion of human health in the ICEMR Bill and consultation with State Health Ministers, the committee notes there are already existing national standard setting regimes for managing risks from industrial chemicals to the public and worker health and safety, including the Standard for Uniform Scheduling of Medicines and Poisons (the Poisons Standard) and Work Health and Safety Regulations. The committee further notes that this package of bills is aimed specifically at filling the gap which currently exists in setting a national standard for the protection of the environment from the use of industrial chemicals.
In cases where environmental health sits within a state health department, it seems sensible that the State Health Minister would be consulted on relevant decisions and the committee would expect the Department of Agriculture, Water and the Environment to do so. It is worth noting that in its submission, the Department stated that it ‘has worked closely with the Federal Department of Health to align the National Standard for environmental risk management of industrial chemicals with the Industrial Chemicals Act and the operations of AICIS.’ This demonstrates that the Department has an understanding of the intersection between health and the environment in relation to the risk management of industrial chemicals.
The committee notes the general support for the ICEMR Bills broad intentions to address the environmental risks associated with the use of industrial chemicals and to establish a more consistent approach to the management of industrial chemicals across jurisdictions, as well as the understanding of the need for the cost-recovery mechanisms within the bills.
Noting the concerns raised in submissions, the committee recommends that the government and department continue to actively engage state and territory governments, as well as relevant industry stakeholders in implementing the ICEMR Bills.
The committee recommends that the Senate pass the bills.
Senator the Hon David Fawcett