Witnesses generally supported reform of the current system for the
approval and registration and review of agricultural chemicals and veterinary
medicines (agvet) chemicals. The Queensland Department of Agriculture,
Fisheries and Forestry for example, submitted that it supports a number of the
bill's provisions, including the introduction of a periodic review of a
chemical's safety through a re-registration and re-approval scheme. Mr Michael
Tichon, an agvet chemicals registration consultant, although having
reservations concerning some provisions of the bill, submitted that the bill
contains many improvements.
While there was general support for reform of the agvet chemicals registration
process, a number of witnesses considered that the changes proposed in the bill
would not achieve the government's aims.
The WFF and the National Toxics Network (NTN), for example, submitted in
a joint submission that they were not confident that there would be sufficient
improvement to the protection of human health and the environment as a result
of the proposed reforms.
The organisations submitted that the bill should be strengthened to oblige the Australian
Pesticides and Veterinary Medicines Authority (APVMA) to ban − and ban quickly − the most
dangerous pesticides used in Australia, the ones that are already banned
Similarly, the Alliance for a Clean Environment submitted that:
The current regulatory model is focussed on pre market
assessments and registration which support industry getting their products onto
the market as quickly as possible. This is not a framework that is balanced
with the protection of human health and the environment despite being stated in
A registered chemical user organisation, the Australian Forest Products
Association (AFPA), submitted that the bill seems to have fallen well short of the
stated objective to improve the efficiency and effectiveness of the current
regulatory arrangements and to provide greater certainty. Mr Matthew,
representing the Association, considered that the bill would appear to increase
the amount of red tape, and process and cost recovery fees with little in the
way of increased efficiencies or certainties.
An organisation representing registrants, manufacturers and formulators
of animal health products, the Animal Health Alliance (AHA), stated that:
This latest attempt by government to deal with APVMA
inefficiencies through the Agricultural and Veterinary Chemicals Legislation
Amendments Bill 2012, does not, in the Alliance’s opinion, do anything to
address the fundamental problem. In fact this new Bill actually increases the
regulatory burden on industry and imposes more work for the APVMA without any
demonstrable cost/risk benefit to warrant such a move.
Concerns that were raised in the evidence about specific provisions
contained in the bill are discussed in this Chapter. Among them are the provisions
for re‑registration and re-consideration; the risk-based registration
process; minor use; costs; and enforcement.
Re-registration and re-approval
The Government stated in the Explanatory Memorandum that Australia does
not have a requirement for regular review, and that the bill provides for a
mandatory scheme for re-approval and re-registration. In the Regulatory
Impact Statement (RIS), the Government refers to:
...the possibility that some agvet chemicals that present an
unacceptable risk to the Australian community and/or environment remain on the
market without appropriate risk management measures in place.
Re-registration is a feature of a number of registration schemes in like
countries overseas. The WFF-NTN submitted that the Government had made an election
commitment in 2007 to a re-registration scheme, and that 'this will help to
bring Australia into line with other comparable jurisdictions such as the USA
and the EU that have registrations schemes...'
The APVMA now conducts chemical reviews on an ad hoc basis when
interested parties, including industry or the APVMA itself, identify potential
The RIS sets out in some detail how it is proposed that chemical reviews
should be processed in a three-tier process.
The first tier would cover all currently registered products and would
entail those holding approvals or registrations (registrants) answering a
number of set questions. In the Government's view, registrants could reasonably
be expected to be in possession of the information sought and so there should
not be a requirement for registrants to produce additional data. A Department
of Agriculture, Fisheries and Forestry (DAFF) witness, Mr Kelly, informed the
committee that if the product is in the market and there are no reasonable
grounds to doubt that the product is safe, then the product should be
If there are doubts raised at the first part of the process the product
would proceed to the second tier. According to the RIS, 'the tier 2 assessment would
determine whether the issues about the product identified in tier 1 were worthy
of further investigation, and what kind of investigation should take place.' At this
The tier 2 process would determine whether it is necessary to
request further information from the registrant and what that information
should be. At tier 2, the APVMA may seek information from overseas regulators
about their registration decisions or seek advice from regulatory partners on
component assessments or particular issues...
Registrants would be requested to provide a submission at this
Following the tier 2 review a chemical might be approved with
conditions; rejected with the registrant having the opportunity to apply anew
for registration or approval; or referred for tier 3 review.
Another submission based on the results of the tier 2 review would be
requested at this third stage. Once again, re-registration might be granted
subject to conditions or rejected, with the registrant having the opportunity
to apply anew for registration or approval.
Importantly, if the registrant were to fail to provide information at
any of the three stages in accordance with an APVMA request, the Authority would
be able to suspend or cancel the registration.
Support for a scheme of mandatory reviews came from the WWF-NTN which
The fact remains the APVMA has a backlog of old chemistries
(which make up the bulk of the pesticide inventory in Australia) to review.
These chemistries were ‘grandfathered’ into the national scheme without ever
having full health and environment risk assessments.
Comparable jurisdictions have since banned some of the
chemistries still widely used in Australia, because they did not meet
contemporary health and environmental standards.
The witnesses tabled a document listing pesticides that were of concern
to them, 80 of which had been 'banned' in the European Union (EU) but were
still available in Australia.
Subsequently, 12 of the pesticides on the list have been registered for
specific uses in parts of the EU.
Some other witnesses, however, do not agree that the proposed re-registration
processes are needed. In CropLife's view, for example, 'the new processes do
not address any regulatory gap', and
the AHA submitted that:
The Alliance has not sighted...any demonstrated evidence of
market failure with veterinary chemical products compliance programs that would
support the argument for a tiered reapplication, review and re-registration
scheme. As such, the Alliance cannot support this proposed scheme.
Similarly, the NSW Farmers Association submitted that it was:
...concerned that the proposed review system may redirect
resources and efforts away from high risk chemicals or products to those with a
low risk. It is believed that the chemical review process is best managed
through a targeted risk-based review program, which is currently provided
through the existing chemical review program.
There were also concerns that the proposed chemical review process would
result in older, useful and cheaper chemicals being withdrawn from the market. The
Veterinary Manufacturers and Distributors Association (VMDA) submitted that
mandatory reconsideration has the potential to deprive veterinarians, farmers
and animal owners of proven products. The VMDA considers that review should
focus on veterinary products with reported adverse effects and that the
proposed arrangements are 'an invitation to anybody including special interest
groups to “swamp” the APVMA with potentially frivolous demands for
reconsideration, which will have to be considered utilizing valuable and scarce
The Victorian Government Minister for Agriculture and Food Security submitted
A possible outcome of the proposed arrangements is that
current agricultural and veterinary chemicals could be lost, which could impact
adversely on Australian and Victorian farmers' ability to produce commodities
for domestic and export trade. This in turn could adversely affect Australia's
and Victoria's economies.
The AHA also considered that mandatory review could result in the
withdrawal of low-cost generic products from the market:
The proposed targeted reapplication, review and re-registration
scheme would be working in a commercial environment where the Australian market
is dominated by generic agvet chemical products. The incentive for such
registrants to allocate resources, let alone generate contemporary data for
their existing products is problematic.
The Australian Veterinary Association referred to an agvet chemical, permethrin,
which is used as an insecticide compound, that was off-patent and generally
available that was lost from the registration compendium in the EU because no-one
would put up money for the extra requirements for its re-registration. It was
replaced with medications that had a lesser safety record.
Some witnesses also considered that those registrants who successfully
sought re-registration would incur additional costs which would be passed on to
When asked why there was a perception in the industry and among chemical
users that the review processes would result in the loss of many generic
products from the Australian market, DAFF responded:
I think that the difficulty comes because the re-registration
scheme proposed in the bill is so different to that overseas. This system was
designed with the characteristics of the Australian market in mind. We know we
are a small market and that an additional cost impost on a chemical company
might result in them withdrawing their product from the market. So we need to
limit that impost. Unlike overseas, we do not require that gaps in data—the
dossier in the file for registered products—be filled up. We do not require
that they produce new data to support the product in the market.
DAFF informed the committee that it was proposed to charge $700 for a re‑registration
application which would last between 7 and 15 years and that 'chemical industry
representatives...do not see the cost of a re-registration fee as overly onerous'. This cost
is for the first step in the proposed three-tier process. In the words of a
departmental witness, if there is 'the sniff of a doubt' at the
first stage, the product would progress to the second tier of the re-registration
process. This stage would require the generation of potentially expensive data
and may well cause manufacturers to consider whether to continue to seek re-registration.
The committee considers that mandatory review of agvet chemicals should
ensure that assessments of all registered and approved products will occur on a
regular basis so that they remain up-to-date. The committee is mindful that the
proposed chemical reviews would implement an election commitment of the
Government which is intended 'to ensure the ongoing safety of agricultural
chemicals and veterinary medicines and improve the current chemical review
It notes, however, that a number of submitters suggested that manufacturers
of low-value but widely used chemicals, owing to the additional costs of the
scheme, might not seek to renew registration of useful and widely-used
chemicals. In the case of generic products no-one might be prepared to accept
the responsibility and associated cost of seeking re-registration. If this were
to happen, it would limit the availability of a range of agvet chemicals to industry
In considering these possibilities the committee notes that the operation
of the proposed system will be subjected to a mandatory review after five years
of operation. It assumes that, if the deleterious effects predicted by some witnesses
become evident, the Government would take corrective action that might include
making appropriate legislative changes.
The Government stated in the Explanatory Memorandum that:
...the Agvet Code is to be implemented through science-based
risk analysis, including risk assessment and management... Risk analysis provides
a scientific, structured, systematic and transparent method for making
decisions. It allows the risks of agvet chemicals to be considered on the basis
of relevant, reliable and sound scientific evidence within the overall context of
human and animal health and safety and environmental protection.
A number of submitters, however, urged that the assessment of agvet
chemicals should be based on 'the precautionary principle', which was usefully defined
in the submission made by Save Our Trees:
Where an activity raises threats of harm to the environment
or human health, precautionary measures should be taken even if some cause and
effect relationships are not fully established scientifically. In this context
the proponent of an activity, rather than the public bears the burden of proof.
The Alliance for a Clean Environment stated that:
To bring this regulatory model towards balancing the needs of
industry (who in fact are part of the community) with the rights of our
citizens enshrined under international treaties and conventions (which
Australia is a signatory) for a safe and clean environment in which to live, a
greater focus is needed to uphold risk management, monitor residues and health
impacts and provide for lower risk and less hazardous chemicals underpinned by
the precautionary principle.
CropLife commented on the application of the precautionary principle to
the assessment of agvet chemicals:
...proponents of the Precautionary Principle in regulatory
decision making often misconstrue its content, ignoring economic elements that
form part of most constructions, including that expressed at the 1992 Rio World
Summit. CropLife does not support the Precautionary Principle as a sound basis
for regulatory decision making on the basis that its content is uncertain and
it is often incorrectly called upon to support regulatory action that is not
justified by a proper understanding of the genuine risk presented by any
Paragraph 1A(2)(d) of the bill states that the Agvet Code is to be
implemented in a manner that recognises that the use of chemical products that
pose unmanageable risks to the health and safety of human beings, animals and
the environment is not appropriate in Australia.
Some witnesses expressed concern that the term 'unmanageable risk' is
not defined. The joint submission made by WWF-Australia and the NTN submitted
If the Code is to be implemented with the intention that
unmanageable chemicals and products are not appropriate, it’s critical a
definition of ‘unmanageable risk’ is explicit in the Bill, along with clauses spelling
out how it will be operationalised in a transparent and accountable manner,
giving certainty to the public and industry.
Mr Heath representing the WWF informed the committee that the
organisation was concerned that there was no head of power in the bill that
would oblige the APVMA to act on those chemicals in a certain time. He stated
that, even if the APVMA acted on a particular chemical, the assessment could be
strung out to 11.5 years.
The organisations' submission states that there's no point wasting regulatory
resources on chemistries, which by definition, present 'unmanageable risk' based
on their inherent toxicological hazards and the risk of exposure to them. By
keeping these products on the market the regulator is blocking the way for
newer, safer products to get to market.
Ms Immig of the NTN stated that unmanageable pesticides should be removed
immediately from the market if there are viable and safer alternatives, but
that there should be an upper limit of no more than three to five years to get
these sorts of products off the market.
Although the AHA's interest is in veterinary medicines rather than
pesticides, the Alliance's Chief Executive Officer remarked that
We must not lose sight of the fact that we have a regulator
which has a legislated remit to manage risk. Either they can be satisfied on
the risk or they cannot. The debate about unacceptable risk actually confuses
the issue. The regulator is either satisfied on the risk to register a product
or to amend the particulars of that registered product or they are not.
The Government has stated that the quality of applications for
approvals, registrations and reconsiderations will be enhanced by the
development, publication and implementation of a risk framework. The framework,
or Risk Compendium, which is to describe the policies and processes the APVMA
will use to assess and manage risk across its regulatory activities, is
integral to the operation of the new scheme.
The APVMA has published the first of two volumes that will comprise the
Compendium. Volume 1 includes a series of framework documents describing the
principles that will guide the APVMA's regulatory decisions and activities. The
second volume will contain more detailed process documents describing how the APVMA
will carry out its regulatory functions but this will not be completed until
2014, after the time proposed for the enactment of the legislation.
The APVMA has stated that the objective of the Compendium is to make
chemical assessment and reconsideration (chemical review) more predictable, and
to better describe how its assessment effort is aligned with risk. According to
the Authority the Compendium will be built and released over time as it works
with its stakeholders to develop systems and processes to implement the new
regulatory framework. The Compendium will aid understanding of the APVMA's regulatory
processes, requirements and decision-making.
Some witnesses were concerned about the timing and the content of the Risk
Compendium. Mr Matthew of the AFPA stated that there is continued uncertainty
in the detail and the application by the regulator of the proposed risk
Mr Cossey of CropLife Australia stated that the proposed commencement dates do
not allow sufficient time for the development of essential risk frameworks and
associated operational documentation by the regulator. A
registration consultant, Mr Tichon, informed the committee that:
...I am afraid the guidelines that the APVMA has issued so far
in the risk compendium do not adequately articulate what is required for...new
technologies. In fact it is very difficult for them to do that because at the
time any document is prepared you do not know what is around the corner in
terms of new technologies. What is really needed is ongoing dialogue between
people developing these technologies and the regulator.
The committee considers that the risk-based processes proposed in the
bill are appropriate for the assessment, approval and registration of agvet
chemicals. The bill makes clear that the amended Agvet Code is to be
implemented in a manner that balances regulatory effort (and regulatory burden)
with the level of chemical risk to the health and safety of human beings,
animals and the environment.
The committee believes that adopting a risk-based approach will provide a
sensible and effective allocation of the APVMA's necessarily limited resources.
The Government has acknowledged that the re-registration and re-approval
process will introduce additional costs to approval holders and registrants who
under the existing system are not subject to re-registration. It considers, however,
that these additional costs would be outweighed by the benefits to the broader
community through improvements to the chemical review program and greater
confidence in the integrity of the National Registration Scheme.
Most evidence received by the committee indicated the new processes
would result in significantly increased costs to the Australian agvet industry.
ACCORD Australasia, for example, which represents manufacturers and suppliers
of formulated (chemical) products submitted that:
It has been estimated that these reforms will significantly
increase the cost to agricultural chemical producers by as much as 30% each
year. In turn, this increase in cost recovery from the industry may have a
detrimental effect on the availability of accessible chemicals for Australian
production systems. It is therefore essential that industry is a beneficiary of
the reform process - the cost increases in the quantum identified are simply
The 30 per cent figure (approximately $8 million per annum) was obtained
from a 2010 APVMA cost recovery discussion paper which was analysed for
CropLife in February 2012 by Deloitte Access Economics. More
recently, in November 2012 APVMA published a Cost Recovery Impact Statement
that estimated the additional cost of re‑registration and re-approval at
approximately $2 million per annum from 2015-16, by which time the new
processes are to be scaled up.
That figure does not include an estimated additional annual cost of $814 289
for the increased compliance and enforcement activities proposed in the bill.
DAFF informed the committee that the estimated 30 per cent increase had
been based on the original 2010 proposals for the re-registration scheme but
that the scheme had since been refined to take costs out of the system.
Additionally, the APVMA's cost recovery impact statement had not then been
Although the costs to industry may be not of the order suggested by some
witnesses, an additional impost nevertheless remains. A concern expressed by a
number of witnesses was that a quantitative cost benefit analysis had not been
done to justify the proposed scheme. Mr McKeon of the National Farmers'
Federation (NFF) stated that:
We would fully support [the proposed scheme] being exposed to
a clear, full cost-benefit analysis undertaken before the application or the
introduction of a registration process, to actually look at what each of the
issues are, what some of those opportunity costs are that the industry may miss
out on from having products removed from the market and what the real costs
would be of implementing a scheme such as reregistration.
A DAFF witness stated that the Government had not done a quantitative
cost-benefit analysis, but that the Government had been through a Productivity
Commission inquiry and an Australian National Audit Office (ANAO) report and
had produced a RIS. The Government had concluded that the benefit of reforming
the system was greater than the cost.
In the Explanatory Memorandum the Government stated that business would benefit
through increased certainty over regulatory requirements and timeliness,
reduced application requirements where permitted by appropriate risk
management, improved data protection provisions and increased community
confidence in regulatory outcomes.
DAFF is currently undertaking a 'first principles' review of the cost of
the APVMA and how those costs should be apportioned and who should pay for
Some witnesses drew attention to costing regimes in similar countries overseas
where some costs are met by government. In relation to the costs of compliance
and enforcement, a DAFF witness commented that there was an element of a
community good in compliance, but also an element of private good.
The bill would require industry to fund additional re-registration and
re‑approval processes and to pay additional compliance costs. The quantum
of these costs is estimated to be approximately $2.8 million annually from the
time the scheme is expected to be fully operational in 2015-16.
Benefits to business are not easy to quantify, but in the view of the Government
they would outweigh the costs. The Government also expects that there will be
additional benefits from the proposed amendments, including providing greater
assurance to the public about the safety of new and existing chemicals.
Given both the public and private benefits the Government expects to
accrue from the passage of this bill, the committee will be interested in the
conclusions of the costing exercise begun by the department.
An APVMA Information Sheet states that in horticulture, one of the
current difficulties is the lack of registered products for use specifically on
This issue was raised by a number of witnesses who submitted that the bill in
its current form does not include an appropriate framework for dealing with
This is a concern because the costs involved in generating data for a minor use
may not be recouped from the market
and manufacturers are therefore unlikely to seek to register (or re-register) such
chemicals. Minor use industries such as forestry and mushroom growing may not
have continued access to effective chemical products.
According to the APVMA, the lack of access to chemicals is partly
alleviated by dealing with minor uses as off-label permits, which are issued
for a finite period. Off‑label permit approvals are generally restricted
to products which are already registered and for which the toxicological and
environmental data packages have been assessed.
The amendments would allow users to access agvet chemicals for minor use
either by way of an approval to vary the conditions of a label (with the
consent of the registrant) or the issue of an 'off-label' permit.
The Australian Mushroom Growers Association are concerned about the indeterminate
cost of seeking an approval to vary the conditions of a label compared with the
permit system. Mr Seymour, the General Manager of the Association, estimated
that it costs the Association at least $100 000 each time it applies for a
permit for minor use; this cost includes $60 000 for the generation of data.
Witnesses were also concerned that in the re-registration process minor
uses might disappear from the labels of registered products.
The department informed the committee that while the bill might assist
minor users in relation to the use of data, it is not intended to address that
issue. Mr Koval stated that:
Many people are looking at the American system, which has a
relatively high cost to it for government... We are looking at ways we provide
funds to APVMA already around minor use; we have research and development
corporations that do some work around minor use; and we are looking at ways we
can perhaps better coordinate and prioritise that type of process to generate
some efficiencies. By the same token, we are looking at other ways we can
incentivise this system as well. It is a body of work that will continue to be
developed over time. The regulation bill is not a minor use bill.
The bill is not intended to, nor does it, address issues surrounding the
registration of minor use agvet chemicals, except to the extent that the data
protection provisions are relevant. The committee has noted the evidence that
there may be an element of public good arising from the registration of
chemicals that may not be otherwise available for minor uses. If so, it would
expect that the 'first principles' cost inquiry currently being undertaken
would identify this good and conclude appropriately.
As mentioned in Chapter 2, the bill has been considered by the
Parliament's scrutiny committees under their terms of reference.
This committee has not sought to repeat their work, nor to comment on
their findings in any detail. It notes, however, that both the Senate Standing
Committee for the Scrutiny of Bills and the Parliamentary Joint Committee on
Human Rights reported some concerns relating to the extent to which some
provisions of the bill might trespass on personal rights and liberties or
encroach on the right to privacy.
Both committees have sought responses from the Minister on their
Assessment of Veterinary Medicines
The AHA, which represents registrants, manufacturers and formulators of
animal health products, considered that there should be a regulator for
veterinary chemical products separate from the regulator responsible for
agricultural chemical products. The AHA informed the committee that the Agvet
bill is dominated by agricultural chemical issues and that the veterinary
chemical industry is caught in the slipstream by virtue of Australia only
having one federal regulator dealing with the registration of agricultural and
veterinary chemicals. AHA stated that, apart from New Zealand, Australia is the
only Organisation for Economic Co-operation and Development (OECD) country that
has one primary regulator dealing with both agricultural and veterinary
chemical products. Dr Holdsworth, the Chief Executive Officer of the AHA,
The veterinary chemical industry wants [a veterinary
chemicals regulator] and is prepared to pay the cost for an efficient and
effective separate regulator. There are many examples of such regulators
overseas, namely in the United States of America, Canada, the European Union,
Japan and on and on it goes.
Dr Holdsworth also informed the committee that:
...the APVMA's position at the moment is that internally they
believe they do have a separate process for crop chemicals, pesticides, to that
for veterinary chemicals. They have two streams, but it works under the same
legislation and the same operating process.
The AHA also was concerned that their products, already regulated
through the manufacturing licensing scheme, which is administered by the APVMA,
would be caught up in the re-registration/re-approval scheme to be implemented
by the bill. Although the Association has apparently been informed informally
that their products should get an easy transition through the preliminary
stages by virtue of the fact that they already have these other mechanisms in
place, it argued that it should not have to pay twice – once for the
manufacturing licensing scheme and again for re‑registration.
In answer to a question from the committee on the desirability of having
separate regulators, Mr Kidd of the NSW Farmers Association responded that
Australia has a small population and market and that 'if you had two regulatory
authorities, with one struggling at the moment with funding, how would you
support funding two?'
Dr O'Brien, Managing Director of Jurox Pty Ltd, also representing the
AHA, informed the committee that his company exports one of its products to
Europe and Canada—and will soon be exporting to Japan and America—but that the
Europeans will not accept the APVMA regulation and approvals process. The
company has to be audited by the Therapeutic Goods Administration (TGA) at a
cost of $15 000.
It is also the case that when veterinarians require single doses of
medications that are not otherwise available, these are compounded by
pharmacists who must be granted an exemption by the TGA.
Additionally, the APVMA sometimes arranges for TGA to conduct audits of
manufacturers on the APVMA's behalf.
The committee sees merit in the assessment of veterinary chemicals
separate from assessment of pesticides especially because there may be greater
equivalence between veterinary medicines and human medicines than between
agricultural chemicals and veterinary medicines. It also acknowledges that the
production of veterinary medicines in Australia is controlled through the
manufacturing licensing scheme and that re-approval and re-registration is
probably not necessary in this case.
The bill, however, is not intended to address this matter which may be
regarded as a separate matter for further consideration by the Government.
The committee supports the passage of the bill.
The committee recommends that the Senate pass the Agricultural and
Veterinary Chemicals Legislation Amendment Bill 2012.
Senator Glenn Sterle
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