Chapter 1Background
Referral and conduct of the inquiry
1.1On 28 November 2024, the Senate referred the National Organic Standard Bill 2024 (the bill) to the Rural and Regional Affairs and Transport Legislation Committee (the committee) for inquiry and report by 31 January 2025. This private senator’s bill was introduced by Senator the Hon Bridget McKenzie in the Senate on 19 November 2024 and read a second time.
1.2The committee called for submissions by advertising the inquiry on its website and writing to a broad range of stakeholders to invite submissions. Submissions closed on 18 December 2024, however, some late submissions were also accepted. A total of 26 submissions were accepted and are available on the committee's website.
1.3A list of submitters is provided at Appendix 1.
Structure of the report
1.4This report comprises two chapters. This first chapter provides background information, outlines the key elements of the bill and looks at its consideration by other parliamentary committees. Chapter 2 examines the key issues raised in submissions and sets out the committee’s view and recommendations.
Background to the bill
1.5This section will provide some context on the current regulation of the Australian organics industry, as well as identify some key concerns that the National Organic Standard Bill hopes to address.
A snapshot of the Australian organic market
1.6In 2022–2023, the Australian domestic and export organic industry was valued at $2.3 billion, with organic goods being exported to 55 countries. The Australian government has shown a strong commitment to the sale and export of organic goods; it has recently signed a Statement of Intent on Organics with China, and is currently negotiating updated ‘Organic Equivalency’ agreements with the European Union and a mutual recognition agreement with India.
1.7Australia has 53 million hectares of certified organic farmland, which constitutes approximately 12.4 per cent of the nation’s arable farming land, and 60 per cent of the world’s total organic agricultural land. The Australian organics industry supports over 22 000 full-time equivalent jobs, and 3 035 organic businesses.
1.8The industry is expected to only increase in value, with some projections indicating that the domestic industry will more than double by 2028.
Existing organic regulations
1.9At present, the Department of Agriculture, Fisheries and Forestry (the department) is responsible for administering and maintaining the national organic standard for Australian exports labelled as organic and bio-dynamic. Exports must adhere to the National Standard for Organic and Bio-Dynamic Produce, and the department has several approved certifying bodies that manage the certification and processing of organic and bio-dynamic goods exported from Australia.
1.10However, no equivalent exists for the import and sale of domestic organic goods. Currently, Australia is the sole OECD (Organisation for Economic Co-Operation and Development) country that does not have a regulatory framework for the import and sale of domestic organic goods. As such, there are no legally mandated standards, no legislated definition, and no requirements for certification necessary for the sale of organic produce in Australia.
1.11While there is no regulated standard, the Australian Competition and Consumer Commission (ACCC) is able to ‘enforce organic claims’ used on food labels under Australian Consumer law. Therefore, any claims of a product being organic ‘should be truthful and able to be proved’. This includes businesses claiming to meet Australian Standard for Organic and biodynamic products,AS6000-2015.
Current issues in the Australian organics industry
1.12As of 2022, an estimated 2122 organic businesses remained uncertified, which accounts for approximately 34 per cent of all organic producers. This lack of standardisation can lead to confusion amongst consumers, who are unable to ascertain if produce labelled as organic complies with organic standards. The lack of clear domestic regulation leaves some consumers vulnerable to greenwashing or exploitation, as operators can claim to sell organic produce without any certification.
1.13The extra burden of certification costs is also applied unevenly across organic businesses. If a business does not have certification, they do not incur the extra costs associated with maintaining, proving and administering this certification. Organic businesses that do have certification are unfairly burdened by such costs, putting them at a competitive disadvantage to their uncertified counterparts.
1.14The bill hopes to address these key issues, to lessen the exploitation of consumers, and to compel businesses to be fully transparent when labelling and selling their produce as organic.
Purpose and overview of the bill
1.15The bill is comprised of five parts outlined below.
Part 1 – Preliminary
1.16The bill aims to create a legislative framework for establishing a National Organic Standard. This standard will detail the requirements that organic goods must meet when they are sold, or imported, into Australia.
1.17To obtain an organic certification, a person must show that their operations are carried out in accordance with the National Organic Standard. Such organic certificates will apply to sales for a 12-month period, and will be issued by bodies authorised to issues government certificates under theExport Control Act 2020.
1.18This section of the bill also provides a definition of prescribed organic goods.
Part 2 – Selling or importing prescribed organic goods is subject to conditions
1.19As per Division 1, persons that attempt to sell or import prescribed organic goods without the necessary certification may be liable to a civil penalty. Civil penalties also apply to those that make false or misleading representations of prescribed organic goods.
1.20Section 13 of Division 1 outlines the unique penalties that may accrue to bodies corporate if they are found to be in violation of the bill, as to be calculated by a relevant court.
1.21Division 2 details the exemptions to the enforcement of civil penalties, as based on the sum of the market values of all prescribed organic goods sold for individuals and based on annual turnover for bodies corporate. Exemptions also apply to commercial samples, and goods sold or imported into Australia for experimental or exceptional purposes.
Part 3 – Organic certificates
1.22Part 3 of the bill notes the conditions that must be met for the obtaining and issuing of valid organic certificates. Organic certificates are in force for a 12-month period and may be revoked at the discretion of the issuing body.
Part 4 – Audits, compliance and enforcement
1.23Subdivision A of Division 1 outlines that the Secretary of the Department of Agriculture, Fisheries and Forestry (the secretary) may require audits to be conducted of all persons that hold organic certificates, or those who sell or import prescribed organic goods in Australia. The secretary is not required to give prior notice of such audits, and may request relevant information and samples of goods, equipment or other items used in operations to which the audit relates.
1.24Division 2 of Part 4 of the bill explains the compliance and enforcement mechanisms instituted by the bill. The ACCC may authorise officers to carry out enforcement of the National Organic Standard, and such officers are granted investigative powers to aid in this enforcement.
1.25Subdivision D of Part 4 outlines the civil penalties that may be imposed if persons or bodies corporate are found to have contravened the requirements for the sale and import of organic produce. These may include civil penalties, injunctions, civil liabilities, and adverse public orders.
Part 5 – Other matters
1.26This section of the bill stipulates that decisions made by issuing bodies may be submitted for review by the Administrative Review Tribunal.
Consideration by other Parliamentary Committees
1.27When examining a bill or draft bill, the committee considers any relevant comments published by the Senate Standing Committee for the Scrutiny of Bills (Scrutiny Committee) and the Parliamentary Joint Committee on Human Rights (Human Rights Committee).
Scrutiny Committee consideration
1.28In its Scrutiny Digest 15 of 2024, the Scrutiny Committee raised concerns that Part 5, Division 2, Subdivision B of the National Organic Standard Bill may raise scrutiny concerns under principle (i) in relation to privacy.
Human rights compatibility
1.29In its Report 11 of 2024, the Human Rights Committee noted that the National Organic Standard Bill appears to engage and may limit human rights.
1.30The committee recommended that should the bill proceed to further stages of debate, more information as to the human rights compatibility of the bill may be required.