BILLS DIGEST NO. 19, 2017–18              16 August 2017

Industrial Chemicals Bill 2017 [and associated Bills]

Dr Emily Hanna
Science, Technology, Environment and Resources Section

April Voigt
Law and Bills Digest Section

Date introduced:  1 June 2017

House:  House of Representatives

Portfolio:  Health

Commencement: The substantive provisions of the Industrial Chemicals Bill will commence on 1 July 2018. The commencement dates of the other Bills are specified in subclause 2(1) of each Bill and outlined in this Bills Digest.

Links: The links to each Bill, its Explanatory Memorandum and second reading speech can be found on each 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 August 2017.

Table of abbreviations

AICIS

Australian Industrial Chemicals Introduction Scheme

AICS

Australian Inventory of Chemical Substances

AIIC

Australian Inventory of Industrial Chemicals

APVMA

Australian Pesticides and Veterinary Medicines Authority

Charges (Customs) Bill

Industrial Chemicals Charges (Customs) Bill 2017

Charges (Excise) Bill

Industrial Chemicals Charges (Excise) Bill 2017

Charges (General) Bill

Industrial Chemicals Charges (General) Bill 2017

Code

Australian code for the care and use of animals for scientific purposes

Consequential Amendments Bill

Industrial Chemicals (Consequential Amendments and Transitional Provisions) Bill 2017

Cosmetics Standard

Cosmetics Standard 2007

FSANZ

Food Standards Australia New Zealand

GATT

General Agreement on Tariffs and Trade

ICNA Act

Industrial Chemicals (Notification and Assessment) Act 1989

NICNAS

National Industrial Chemicals Notification and Assessment Scheme

Notification and Assessment Amendment Bill

Industrial Chemicals (Notification and Assessment) Amendment Bill 2017

PHAA

Public Health Association of Australia 

Regulatory Powers Act

Regulatory Powers (Standard Provisions) Act 2014

Rotterdam Convention

Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade

TBT

Agreement on Technical Barriers to Trade

WTO

World Trade Organization

The Bills Digest at a glance

Purpose of the Bills

•       The Bills establish a new legislative scheme, called the Australian Industrial Chemicals Introduction Scheme (AICIS), to control the introduction of industrial chemicals. AICIS will replace the National Industrial Chemicals Notification and Assessment Scheme (NICNAS).

•       The purpose of the new regime is to reduce regulatory burden while still protecting human health and the environment by making the level of assessment required for the introduction of an industrial chemical proportionate to its potential risk. It also provides that animal testing data cannot be relied on to support the introduction of chemicals that will be solely used in cosmetics.

Structure of the Bills

•       This is a package of six associated Bills.

Background

•       A review of NICNAS was undertaken after stakeholder complaints. The resultant Bills aim to ‘streamline the assessment process for industrial chemicals to reduce the regulatory burden on the sector, while also ensuring Australia’s robust safety standards are maintained’.

Stakeholder concerns

•       Groups concerned about public health, workers in the industry and the environment are worried by the reduction of oversight and limited amount of detail included in the Bills and the possible resultant risks.

•       Groups interested in animal welfare believe that the measure relating to animal testing for cosmetics is too narrow.

Key elements

•       The Industrial Chemicals Bill 2017 sets out new categories for introduction of industrial chemicals, with new requirements for introductions.

•       There will also be a new inventory listing industrial chemicals, the Australian Inventory of Industrial Chemicals.

•       The Industrial Chemicals Bill 2017 prohibits the inclusion of animal test data obtained from tests conducted on or after 1 July 2018 in an application to introduce a new industrial chemical for an end use solely in cosmetics.

Key issues

•       One major issue that applies to the whole Industrial Chemicals Bill 2017 is that little detail of the scheme is included in the Bill itself. Instead, the Bill provides an overarching framework and the detail of how the scheme will operate is left to delegated legislation. This greatly reduces the level of parliamentary scrutiny that can apply to the scope and actual operation of the scheme.

•       Record keeping requirements in the new scheme do not require introducers of chemicals to inform AICIS of which chemicals they have introduced in the ‘exempted introductions’ category (the lowest risk category), only whether they have introduced chemicals in this category. This means that there will be no complete Government record of the industrial chemicals introduced into Australia.

•       There are concerns that only banning animal test data for industrial chemicals which will be solely used in cosmetics will allow animal testing to continue for new industrial chemicals with multiple end uses, even if one is cosmetic use.

Purpose of the Bills

This Bills Digest is for a package of six Bills:

•       the Industrial Chemicals Bill 2017 (Industrial Chemicals Bill)

•       the Industrial Chemicals (Consequential Amendments and Transitional Provisions) Bill 2017 (Consequential Amendments Bill)

•       the Industrial Chemicals (Notification and Assessment) Amendment Bill 2017 (Notification and Assessment Amendment Bill)

•       the Industrial Chemicals Charges (General) Bill 2017 (Charges (General) Bill)

•       the Industrial Chemicals Charges (Customs) Bill 2017 (Charges (Customs) Bill) and

•       the Industrial Chemicals Charges (Excise) Bill 2017 (Charges (Excise) Bill).

The purpose of the Industrial Chemicals Bill is to establish a new legislative scheme, called the Australian Industrial Chemicals Introduction Scheme (AICIS), to control the introduction of industrial chemicals. AICIS will replace the National Industrial Chemicals Notification and Assessment Scheme (NICNAS). The purpose of the new regime is to:

•       reduce regulatory burden while still protecting human health and the environment by making the level of assessment required for the introduction of an industrial chemical proportionate to its potential risk and

•       provide that animal testing data cannot be relied on to support the introduction of chemicals that will be solely used in cosmetics.

The purpose of the Consequential Amendments Bill is to:

•       repeal the Industrial Chemicals (Notification and Assessment) Act 1989 (the ICNA Act) and three related charges Acts[1] and

•       provide consequential amendments and transitional arrangements as the ICNA Act is replaced by the regime under the Industrial Chemicals Bill.

The purpose of the Notification and Assessment Amendment Bill is to amend the ICNA Act with some reforms before the new regime comes into effect. This includes changing definitions to allow certain polymers to be introduced into Australia more easily, as well as changes in reporting requirements.

The purpose of the Charges (General) Bill, Charges (Customs) Bill and Charges (Excise) Bill are to allow the Government to impose an annual charge for registration of an introducer of industrial chemicals under the new regime. These three Charges Bills allow, respectively, charges that are not an excise or customs duty, excise charges and customs charges. The three Charges Bills are separate due to the Constitutional requirement for taxation, duties of excise and duties of customs to be dealt with in Bills that only include that individual, respective type of charge.[2]

Structure of the Bills

The Industrial Chemicals Bill is divided into multiple parts. Each part of the Bill addresses different requirements that are needed to run the new scheme for introduction of industrial chemicals:

•       Part 1 contains preliminary provisions, including definitions

•       Part 2 establishes the Register of Industrial Chemical Introducers

•       Part 3 specifies the new categories of industrial chemicals and their required levels of assessment

•       Part 4 specifies when an evaluation of an industrial chemical or related matter can be initiated by the Executive Director

•       Part 5 establishes the new Australian Inventory of Industrial Chemicals

•       Parts 6–8 outline information and reporting requirements as well as provisions for the establishment, administration and enforcement of AICIS, and create the role of Executive Director

•       Part 9 specifies relevant international agreements and their application and

•       Part 10 contains miscellaneous provisions, including the general rule making power and one of the clauses which restricts the use of animal testing for cosmetics.[3]

The Consequential Amendments Bill is divided into two schedules. Schedule 1 repeals the current legislation controlling industrial chemicals and amends various Acts that reference the ICNA Act, while Schedule 2 contains mainly transitional provisions.

Commencement

The new Industrial Chemicals scheme is proposed to commence on 1 July 2018.[4]

The schedules of the Consequential Amendments Bill commence on the later of:

•       the day after Royal Assent and

•       immediately after the commencement of the Industrial Chemicals Act 2017.[5]

Clauses 1 to 3 of the Notification and Assessment Amendment Bill commence on the day that Bill receives Royal Assent, while Schedule 1 commences on the latest of the following:

•       1 July 2017

•       the day that the Notification and Assessment Amendment Bill receives Royal Assent

•       the day that the Industrial Chemicals Bill receives Royal Assent

•       the day that the Charges (General) Bill receives Royal Assent

•       the day that the Charges (Customs) Bill receives Royal Assent and

•       the day that the Charges (Excise) Bill receives Royal Assent.

However, if the related Bills mentioned above do not receive Royal Assent, then Schedule 1 will not commence.[6]

Clauses 1 and 2 of the Charges (General) Bill, Charges (Customs) Bill and Charges (Excise) Bill all commence on Royal Assent while clauses 3 to 9 of each Bill commence on the later of:

•          the day after Royal Assent and

•          immediately after the commencement of the Industrial Chemicals Act.

If the Industrial Chemicals Act does not commence, then the three Charges Bills will not commence.[7]

Background

Chemicals introduced to Australia (whether through importation or manufacture) are regulated through four federal schemes. The schemes are divided by end use of the product. The four areas concentrate on:

•       therapeutic goods including medicines and sunscreens, which are regulated by the Therapeutic Goods Administration under the Therapeutic Goods Act 1989[8]

•       human food, which is regulated by Food Standards Australia New Zealand (FSANZ) under the Food Standards Australia New Zealand Act 1991[9]

•       agricultural products, pesticides, veterinary medicines and animal food, which are regulated by the Australian Pesticides and Veterinary Medicines Authority (APVMA) under the Agricultural and Veterinary Chemicals (Administration) Act 1992, the Agricultural and Veterinary Chemicals Code Act 1994 and the Agricultural and Veterinary Chemicals Act 1994[10] and

•       industrial chemicals (chemicals which are not covered by the other categories) including those used in products such as paint, glue, soaps and cosmetics.[11]

The last category, industrial chemicals, is currently regulated under the ICNA Act. Under the ICNA Act, the NICNAS began in 1990. NICNAS, which is administered by the Department of Health, ‘helps protect the Australian people and the environment by assessing the risks of industrial chemicals and providing information to promote their safe use’.[12] The current scheme lists approximately 40,000 ‘existing’ chemicals on the Australian Inventory of Chemical Substances (AICS). These ‘existing’ chemicals do not require assessment before being used in goods nor is notification to NICNAS required before they enter the Australian market.[13]

In 2015–16, Australian industrial chemical imports and exports were worth over approximately $62 billion.[14]

Approximately 9,000 ‘new’ chemicals are introduced into Australia each year which do not need assessment before entering the market. This is because they are included in one of the categories that are granted exemption from assessment.[15] Examples of exemption categories include:

•       chemicals introduced solely for research, development or analysis (in an amount not greater than 100kg per year) and

•       chemicals that are in Australia for less than 30 days after introduction, which do not leave a port or airport and are constantly under Customs and Border Protection Service control.[16]

NICNAS must still be notified of the introduction of exempt chemicals annually (post-market). As well as this, approximately 300 chemicals a year must be assessed by NICNAS to determine their risk to human health and the environment. They are not permitted to enter the Australian market until they have been granted an assessment certificate or permit.[17]

A review of NICNAS was undertaken in 2012–13 to determine ‘how the existing regulatory settings may be improved to enhance both the competitiveness of the Australian chemical industry and public health and environmental outcomes’.[18] A number of stakeholders, including community and industry groups, had called for NICNAS to be improved. Community groups wanted continued assurance that the health of Australian people and the environment was being appropriately protected. Industry groups wanted the system to work faster and believed that in its current form, NICNAS encouraged the use of already listed chemicals, which could potentially be more harmful than newer industrial chemicals. The review found that ‘NICNAS’s assessment framework is not sufficiently based on the likely risk of a chemical’, that the ‘[l]egislative requirements create inefficient regulatory processes’ and that there were ‘[i]nconsistencies and uncertainties in regulatory coverage’.[19] A number of reforms were suggested to deal with these issues, and further stakeholder consultation was carried out.

In 2015, the Government announced that industrial chemical regulation reforms would be implemented by September 2018.[20] Stakeholder consultation continued and a total of five consultation papers have been published covering topics including matters to be included in delegated legislation under the new regime.[21] The resultant Bills are designed to deliver the proposed reforms to NICNAS and aim to ‘streamline the assessment process for industrial chemicals to reduce the regulatory burden on the sector, while also ensuring Australia’s robust safety standards are maintained’.[22]

Animal testing

There is currently no national legislative scheme banning animal testing for cosmetic purposes, or the sale of such products, in Australia. Despite this, very little (if any) animal testing for cosmetic purposes occurs in Australia as it is made largely impractical by legal barriers imposed by animal welfare and research laws of the states and territories, particularly through compliance with the National Health and Medical Research Council’s influential Australian code for the care and use of animals for scientific purposes (the Code).[23]

The states and territories incorporate the Code into their animal research and welfare laws (albeit to varying degrees) with the aim of achieving the objective of the Code ‘to promote the ethical, humane and responsible care and use of animals used for scientific purposes’.[24] These laws (like the Code) do not ban animal testing for cosmetic purposes but they do make it difficult, which contributes to the lack of such testing currently taking place in Australia.[25] For example, in jurisdictions where the Code has been incorporated into law, research institutions are required to establish an animal ethics committee to determine whether animal testing is ‘essential’ and ‘justified’ by balancing the scientific or educational value against animal welfare.[26] Overcoming this hurdle may be difficult where there are existing non-animal cosmetic testing alternatives.

At the national level, a number of proposals to restrict animal testing for cosmetic purposes, and the sale of cosmetic products tested on animals, have been put before the Australian Parliament in the past, in line with changing domestic and international attitudes evidenced, for example, by animal testing bans across the European Union (EU) (discussed in more detail below).[27] There was an increase in political momentum in 2014 to regulate such testing at a national level following the introduction of Greens’ Senator Lee Rhiannon’s End Cruel Cosmetics Bill 2014 and the release of the Australian Labor Party’s public consultation report which reflected widespread public support for increased regulation.[28]

During the 2016 election campaign, the Coalition announced that, on re-election, it would implement a:

… policy to ban the testing of finished cosmetic products on animals in Australia, the testing of cosmetic ingredients on animals in Australia and the sale of cosmetic products and ingredients that have been tested on animals outside of Australia.[29]

The ban was proposed to come into effect from 1 July 2017. The Government followed this announcement with public consultation with industry, animal welfare organisations and the general public which commenced in late 2016. The outcomes, published in a consultation paper in March 2017, indicate that there is general support to bring Australia in line with international approaches to animal cosmetic testing. However, that consultation also found that such regulation should not have a significant detrimental impact on industry or consumers and should be overseen by the government to ensure compliance.[30] The Coalition subsequently announced in its 2017–18 Budget that it would ‘provide $2.1 million over two years from 2017–18 to implement its 2016 election commitment to ban cosmetic testing on animals in Australia’.[31]

As will be discussed in further detail later in this Digest, the Industrial Chemicals Bill does not purport to expressly ban animal testing for cosmetic purposes, or the sale of such products. Instead it restricts the circumstances in which data obtained by animal testing may be relied upon in applying under the industrial chemicals regulations to manufacture or import chemicals for cosmetic purposes in a manner similar to the animal testing regulations of the EU. While the Industrial Chemicals Bill does not expressly ban animal testing for cosmetic purposes on its own, it is proposed to be a part of a broader policy framework which includes amending the Code to include an outright cosmetic testing ban and to work with the states and territories to incorporate the amended Code into their respective laws.[32]

European Union and other international examples

The Industrial Chemicals Bill aims to ‘bring Australia into line with the EU’ in relation to animal testing for cosmetic purposes.[33] Since 2003 the EU has prohibited the:

•       marketing of cosmetics that have been, or that include ingredients that have been, tested on animals and

•       conduct of animal testing for cosmetic purposes testing within the EU, after the time at which alternative non-animal methods are validated.[34]

Although there is no reference to importation, the practical effect of the EU marketing ban is that cosmetic products tested on animals in countries outside the EU cannot be sold within EU countries. Further comparisons between the EU regulations and the Industrial Chemicals Bill are made in Key issues and provisions, below.

Other countries which have moved away from animal cosmetic testing include:

•       Israel[35]

•       India[36]

•       South Korea[37] and

•       New Zealand.[38]

New Zealand introduced an express ban on animal testing of cosmetics, or ingredients for exclusive use in a cosmetic, although this does not apply to imports.[39] It should be noted that New Zealand does not have the same division of powers between the states and territories and the Commonwealth as Australia. This means introducing such a ban in New Zealand does not encounter the same constitutional issues as those that arise in the Australian context. These constitutional restraints are discussed in further detail in the Key issues and provisions section below.

Committee consideration

Senate Community Affairs Legislation Committee

The package of Bills was referred to the Senate Community Affairs Legislation Committee for inquiry and report by 13 June 2017. The reporting date was extended until 8 August 2017. The report and details of the inquiry are at the inquiry homepage.[40] Sixteen submissions were received from stakeholders including industry, health and animal welfare groups.[41]

The majority report of the Committee recommended that the Bills be passed and made no other recommendations.[42] However, there were additional comments from Labor[43] and a dissenting report from the Greens.[44] These are discussed below in ‘Policy position of non-government parties/independents’.

Senate Standing Committee for the Scrutiny of Bills

The Industrial Chemicals Bill

The Senate Standing Committee for the Scrutiny of Bills raised three issues with the Industrial Chemicals Bill. The first related to the review of decisions made under the Industrial Chemicals Bill. Clause 166 includes a table that lists the decisions made by the Executive Director which are classified as a ‘reviewable decision’, where ‘[a] “reviewable decision” is one which sets out a process for reconsideration by the Executive Director and review by the Administrative Appeals Tribunal’.[45] However, the Committee noted that not all decisions made under the Bill are listed as reviewable, which is not explained in the Explanatory Memorandum. Likewise, it does not explain why some decisions are included as reviewable decisions while others are not, and the Committee believes that ‘if decisions are excluded that might have an adverse impact on an individual’, justification is required. The Committee requested the Minister’s advice on this issue.[46] The Minister explained that ‘[a]ll decisions that could adversely affect the interests of an applicant are reviewable’.[47] He stated that the non-reviewable decisions were purposely excluded from being reviewable as ‘for example, the decision will have no adverse impact on the applicant, will not change the status quo or is automatic’.[48]

Another issue raised by the Committee was that the Industrial Chemicals Bill overrides the common law principle of a person being excused from giving evidence that will incriminate him or herself in particular circumstances. Under clause 161, the Executive Director can require a person to provide information or documents that ‘it is reasonably necessary to obtain for the purpose of Australia’s compliance with its obligations under the Rotterdam Convention’.[49] Subclause 175(1) then states that a person is not excused from providing this information or document because it may incriminate him or her or result in a penalty. However, subclause 175(2):

… provides that the information or documents produced, or anything obtained as a direct or indirect consequence of the production of the information or documents, is not admissible in evidence in most proceedings.[50]

Despite this, the Committee was concerned at the abrogation of the privilege against self-incrimination, especially given there was no justification for this in the Explanatory Memorandum. The Committee requested an explanation for the abrogation from the Minister.[51] The Minister replied that the abrogation was limited, as it could only apply in the ‘very limited’ circumstances allowed by clauses 175 and 161 described above, and that the ICNA Act contains a provision with the same effect so Australia can meet its international obligations.[52] The Minister stated that ‘[t]he provision has been included … so that there is no change or disruption in the arrangements described in the new law, as they relate to Australia's international obligations’.[53]

The final issue that the Committee raised related to clause 180 of the Industrial Chemicals Bill, which provides that the rules made under the Bill ‘may make provision in relation to a matter by applying, adopting or incorporating any matter contained in any other instrument or other writing as in force or existing from time to time’, despite subsection 14(2) of the Legislation Act 2003.[54] Incorporating external documents into law raises a number of issues, as it ‘can create uncertainty in the law’, means that it is possible the law can change without parliamentary scrutiny and can make it difficult for people to access the provisions of the law they are meant to be following.[55] The Explanatory Memorandum states that the external materials are anticipated to include relevant international lists of chemicals that the introducer must use to determine whether the chemicals they wish to introduce are known to have particular hazards. The Explanatory Memorandum goes on to explain that as the lists could be regularly updated, referencing them at certain dates will not be meaningful.[56] However, the Committee was concerned about the availability of the relevant lists for interested parties and has sought the Minister’s advice as to whether the relevant international lists will be made freely available.[57] The Minister replied that ‘[a]ny materials to be incorporated by reference are readily accessible (at no cost) and links to the materials will be made available on the AICIS website’.[58]

The Consequential Amendments Bill

The Senate Scrutiny of Bills Committee raised the issue of the retrospective application of rules allowed by item 50 of Schedule 2 of the Consequential Amendments Bill. Subitem 50(4) of the Consequential Amendments Bill states that ‘subsection 12(2) of the Legislation Act 2003 does not apply to rules made before 1 July 2020’. Subsection 12(2) ‘prohibits the retrospective application of legislative instruments which have a detrimental effect on a person or impose retrospective liability on a person’.[59] This means that the rules could apply retrospectively, in contrast to the general principle that laws should apply prospectively, and that the retrospective application could negatively affect individuals. The potential for rules to have a retrospective detrimental impact is a ‘particular concern’ of the Committee, especially since the reason for it is not included in the Explanatory Memorandum. The Committee thus asked the Minister to explain the reason behind this aspect of the legislation.[60]

The Minister explained that allowing the transitional rules to apply retrospectively was required to deal with any unforeseen gaps and unintended consequences due to the replacement of the complex ICNA Act with the ‘significantly different’ new scheme.[61] He also confirmed that ‘[i]t is not intended or anticipated that persons would be disadvantaged through retrospective application of the rules’.[62]

The Senate Scrutiny of Bills Committee also raised concern about subitem 50(3), which allows delegated legislation to modify the application of primary legislation. The Committee explained the problem with allowing delegated legislation to modify legislation examined by Parliament:

There are significant scrutiny concerns with enabling delegated legislation to override the operation of legislation which has been passed by Parliament as such clauses impact on the level of parliamentary scrutiny and may subvert the appropriate relationship between the Parliament and the Executive. As such, the committee expects a sound justification … in the Explanatory Memorandum.[63]

The Committee accepted that it may be suitable for the delegated legislation to amend the primary legislation in the circumstances covered by the Bill, particularly given the detailed justification in the Explanatory Memorandum. This justification included the ‘significant consequences for not having the right transitional arrangements in place’ and the complexity of transitioning from the old law.[64]

The Notification and Assessment Amendment Bill

The Scrutiny of Bills Committee had no comment on the Notification and Assessment Amendment Bill.[65]

The Charges (General), the Charges (Customs) and Charges (Excise) Bills

The Scrutiny of Bills Committee had the same concern for all three of the Bills related to charges—the Charges (General) Bill, the Charges (Customs) Bill and Charges (Excise) Bill. Subclause 7(1) of each Bill provides for the amount of the registration charge to be set by regulations. The Committee expressed concern that the Bills do not set a limit on the charge. The Committee has requested the Minister’s advice as to why the Bills do not specify a maximum charge and also ‘whether guidance in relation to the method of calculation of the charge and a maximum charge’ can be included in each Bill.[66]

The Minister replied that there was no maximum amount included in the Bills for reasons including that it would misrepresent the amount payable since it would have to be higher than the maximum amount payable.[67] Due to the large variance in fees between individuals, an included maximum charge would also ‘misrepresent the magnitude of charge likely to be payable by most registrants (reducing transparency)’.[68] The flexibility of having the charge calculation method or specific charges in regulations, rather than the primary legislation, allows charges to be changed as required to avoid over or under recovery of costs. The Minister also explained that the present approach complies with the Australian Government Cost Recovery Guidelines and relies ‘on the general cost recovery rules to provide the necessary assurances and transparency to stakeholders’.[69]

Policy position of non-government parties/independents

New chemicals regime

Labor

In their additional comments in the Senate Committee report on the Bills, Labor Senators indicated that they do not oppose the Industrial Chemicals package of Bills. However, they did have some concerns and believe that some amendments are required. Similar to many interest groups (see below in Position of major interest groups), Labor Senators were concerned by the lack of detail in the Bills themselves and the reliance on regulation, stating that ‘Government is once again asking the Parliament to pass the Bills and trust it on the implementation’.[70] Given that, Labor Senators reserved ‘their right to closely scrutinise the regulations and to disallow any which do not adequately ensure health and environmental protections are not diminished’.[71]

Labor Senators were also concerned about the lack of notification to the regulator of industrial chemicals introduced in the ‘Exempted Introduction’ category, especially given the lack of chemical tracking (for more information see Key issues and provisions, below). Although the introducer will need to inform the regulator that they have introduced chemicals in this category, Labor Senators did not believe that this was sufficient as it does not tell the regulator which specific chemicals were introduced into Australia. They believed that introducers should have to submit ‘the name, volume and date of introduction of the industrial chemical’ to the regulator annually.[72] This would ‘preserve the principle of a register of industrial chemicals, provide greater transparency and should new information about the nature of a chemical come to light, make tracking exposures far easier’.[73]

Labor also suggested that the Inventory Multi-tiered Assessment and Prioritisation (IMAP) process be included in the new legislation.[74] IMAP is currently being used to assess the potential health and environmental impacts of industrial chemicals on the AICS which have not previously been assessed. Despite the assurances of the Department of Health that IMAP or a similar process would continue in a strengthened form under the new chemicals scheme, Labor Senators were concerned there was a scarcity of information on this topic in the Industrial Chemicals Bill and its Explanatory Memorandum. As such, Labor Senators would be ‘further reassured if this commitment was included in the primary Bill’.[75]

Australian Greens

In their Dissenting Report, the Australian Greens were also concerned about the Exempted Introduction category of industrial chemicals and the continuation of IMAP. The Greens believe that the ‘expansion of the exempted chemicals classification creates an unacceptable situation in which the regulator has no knowledge of chemicals in the Australian market’ and that ‘many chemicals which may be thought to be low-risk can be found to lead to greater risk over time’.[76] As such, the Greens recommended that the Bill ‘be amended to ensure that no chemicals introduced into the Australian market, including those classified under the proposed system as “very low risk”, are exempt from notification’.[77]

The Greens also recommended that the Bill be amended to ‘enshrine the continuation’ of the IMAP framework for assessing existing chemicals. They believe this is necessary due to ‘the huge backlog of unassessed chemicals currently in use in Australia’ (currently, approximately 25,000–30,000), and the lack of detail in the Industrial Chemicals Bill about how these chemicals can be assessed under the new regime.[78]

Animal testing

Labor supported banning animal testing for cosmetics, and supported having a ban in the Industrial Chemicals Bill. However, they noted concerns raised by animal welfare groups about the narrowness of the ban in the Industrial Chemicals Bill as well as its ‘loophole which would allow animal test data to be used in industrial chemicals introduced for multi end use’.[79] Labor thus believed that there should be an amendment to broaden the ban on animal test data for cosmetics as it would make the ban more comprehensive and provide ‘much more confidence in the system’.[80]

The Greens are also strong supporters of banning animal testing for cosmetics and supported the ban in the Industrial Chemicals Bill.[81] However, they also believed that the proposed ban is too narrow, and recommended ‘that the Bill be amended to ensure that applications to introduce chemicals for cosmetic end-use do not use animal tested data under any circumstances’.[82]

Private Member and Senator Bills

The broad cross-party support for greater regulation of cosmetic testing on animals has resulted in the previous introduction of Bills banning animal testing for cosmetics.[83] Both Labor and the Greens have introduced private members’ Bills aimed at banning testing:

•       the End Cruel Cosmetics Bill 2014 introduced by Greens Senator Lee Rhiannon on 18 March 2014[84] and

•       the Ethical Cosmetics Bill 2016 introduced by Labor’s Clare O’Neil on 29 February 2016.[85]

On 27 November 2014, the Senate passed a motion with support of all parties and most crossbenchers, including Senator Xenophon, urging the Government ‘to aspire to eliminate unnecessary animal test methods to evaluate the safety of cosmetic products and ingredients’.[86]

Broadly, each of the private members’ Bills proposes to amend the ICNA Act to create an offence for testing a cosmetic, or a substance for use in a cosmetic, on an animal.[87] Additionally, the Ethical Cosmetics Bill 2016 proposed to create offences relating to the importation and manufacturing of cosmetic products, or substances for use in cosmetic products, which were tested on animals.[88] The End Cruel Cosmetics Bill 2014 includes similar offences and proposes further offences for the marketing and/or selling of cosmetic products, or substances for use in cosmetic products, which are tested on animals.[89]

While the Ethical Cosmetics Bill 2016 lapsed at prorogation of the 44th Parliament on 15 April 2016, the End Cruel Cosmetics Bill 2014 was restored to the Notice Paper after commencement of the 45th Parliament, and remains before the Senate.[90]

Position of major interest groups

New chemicals regime

Opinions on the new chemical introduction scheme have been mixed. The scheme as a whole has been welcomed by industry groups and chemical companies such as Chemistry Australia (formerly the Plastics and Chemicals Industry Association) and Dow Chemical. This is due to factors including the chemical assessment process being streamlined and the associated reduction of red tape and decreased time for assessment of new chemicals.[91] For example, ACCORD (the association for the hygiene, cosmetic and specialty products industry) has labelled the Bills a ‘vast improvement’ on the current ICNA Act and recommend that it is passed as written.[92]

However, groups concerned about public health, workers in the chemical industry and the environment are worried by the reduction of oversight and lack of detail in the Bill (due to multiple clauses leaving detail to legislative rules) and the possible resultant risks. For example, in its submission to the Senate inquiry, the Public Health Association of Australia (PHAA) expressed disappointment ‘that the proposed reforms will now allow many new chemicals to be imported into or manufactured in Australia without any Government or public record of these introduced chemicals’.[93] The PHAA further stated it:

… cannot support reforms in the proposed Australian Industrial Chemicals Introduction Scheme (AICIS) that erode the capacity of current regulations in the NICNAS to perform the Government’s key role of “regulating to protect human health and the environment”. Furthermore, prioritising “easing regulation for industry” over “protecting the Australian people and the environment” runs counter to the justified expectations of the Australian people.[94]

The National Toxics Network commented that the ‘reforms do not strike a balance, but seek to erode protections and establish what will largely be a deregulated approach to industrial chemicals in Australia’.[95] The Cancer Council Australia was concerned that certain parts contain ‘insufficient clarity to ensure the health of the population’.[96] The Cancer Council Australia also raised concerns about moving the assessment of many chemicals from pre- to post-market, the ‘substantial powers and responsibilities’ that will likely be granted to a bureaucrat and the lack of a commitment to continue assessing the over 30,000 unassessed chemicals in the chemical register.[97]

Numerous interest groups also thought the time available to make submissions in response to the Senate Committee’s inquiry into the legislation was too limited, making it difficult to give the legislation proper scrutiny. As the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (Australian Manufacturing Workers Union or AMWU) said:

The 2015 Federal Budget announced these reforms yet the current the [sic] time frames severely restrict the ability of the public and parliamentarians to scrutinise the Bill. The second reading speech was on the 1st June, submissions to the Senate Committee are due on 12th June [a public holiday for much of the country] and the Committee’s reporting date is 13th June 2017. This is not urgent legislation – it should be open to proper scrutiny from the Parliament and the community.[98]

As noted earlier, the Senate Community Affairs Legislation Committee reporting date was subsequently extended until 8 August 2017.[99]

Animal testing

The RSPCA and Be Cruelty-Free Australia (‘a partnership between Humane Society International (Global and Australia) and Humane Research Australia’) support the introduction of limits on animal testing for cosmetics but believe that the proposed limits should be stronger.[100] The RSPCA commended ‘the Government for taking action to ban cosmetic testing on animals’ and stated it ‘is encouraged to see this basic policy position [banning animal testing for cosmetic purposes] accepted and embraced by major parties across the political spectrum and we commend all parties for taking this important stance’.[101] Be Cruelty-Free Australia acknowledged that the measures in the Industrial Chemicals Bill ‘represent an important step toward the Government’s commitment to ending cosmetic animal testing and trade in Australia’.[102]

However, the RSPCA and Be Cruelty-Free Australia both consider that the clauses in the Industrial Chemicals Bill (clauses 103 and 168) limiting animal testing are too narrow.[103] This is because the animal testing restriction currently in the Industrial Chemicals Bill only applies to chemicals that will be used solely in cosmetics, allowing the ban to be circumvented simply by saying the chemical will be used in a non-cosmetic product as well as a cosmetic product. The organisations both believe the clauses need to be broadened so that they cover chemicals used ‘solely or substantially’ in cosmetics (the RSPCA) or for ‘all cosmetic end uses’, whether or not the chemical is also used in products that are not cosmetics (Be Cruelty-Free).[104]

More information on the views of interest groups is included in Key issues and provisions below.

Financial implications

According the Explanatory Memoranda, there is no financial impact on the Commonwealth from the package of Bills.[105] This is because it is still ‘Government policy that the cost of the Commonwealth industrial chemicals introduction scheme is fully recovered from the regulated industry’.[106]

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 Bills’ 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 Bills are compatible.[107]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights did not raise any human rights concerns for any of the Bills.[108]

Key issues and provisions

Industrial Chemicals Bill[109]

The Industrial Chemicals Bill is the main Bill for the new industrial chemicals scheme. One major issue that applies to the whole Bill is that little detail of the scheme is included in the Bill itself. Instead, the Bill provides an overarching framework and the detail of how the scheme will operate is left to ‘rules’ made by the Minister under clause 180 of the Bill. As the AMWU commented, ‘[t]he Bill or the EM outlines processes but provides no detail on the “what”’.[110] Major parts of the Bill, including, for example, how to determine the different categories of risk that will be used to decide whether or not chemicals need be assessed before they are introduced, are reliant upon these rules. Although the rules will be a legislative instrument, disallowable by either House of Parliament, this greatly reduces the level of parliamentary scrutiny that can apply to the scope and actual operation of the scheme and limits present clarity of the scheme.[111] Despite the public consultation that has been carried out on the new legislative scheme, including on the content of some of the rules, numerous interest groups, including the AMWU and Cancer Council Australia, were concerned that so much of the detail is left to the rules.[112]

Preliminary Provisions

Part 1 of the Industrial Chemicals Bill contains preliminary provisions relating to the new industrial chemicals scheme, including the objects of the regime[113] and definitions applicable to the regime.

Clauses 9 and 10 contain numerous relevant definitions. A key definition in clause 9 is to ‘introduce’ an industrial chemical, which means importing or manufacturing the chemical in Australia. Clause 10 defines an ‘industrial chemical’ basically as one which has an ‘industrial use’. ‘Industrial use’ is then defined in clause 9 as ‘a use other than (or in addition to)’ use as an agricultural or veterinary chemical product, a therapeutic good, human or animal food or any use prescribed by the rules. The Explanatory Memorandum explains that these three terms have ‘the same scope’ as the matching terms used in the ICNA Act.[114]

Under paragraph 10(1)(f), it will also be possible for additional types of chemicals or substances with an industrial use to be added to the definition of industrial chemical by the rules. Subclause 10(2) also allows the rules to exclude certain chemicals from the definition of industrial chemical. The Explanatory Memorandum states that the ability to change the definition of industrial chemical and industrial use through the rules will ‘provide flexibility to make changes over time to ensure the key definitions that confine the parameters of the scheme remain both current and accurate’.[115]

Clause 11 sets out certain types of introductions that will not be covered by the proposed Act. These are referred to as ‘excluded introductions’, and include industrial chemicals introduced at an Australian port or airport which leave Australia within 25 working days and are under customs control for the whole time, and industrial chemicals introduced for personal use.[116] Subclause 11(4) allows the rules to also define further excluded introductions.

The Executive Director

Clause 141 establishes the Executive Director of the AICIS. Under clause 142, the Executive Director’s functions include ‘to promote the international harmonisation of regulatory controls or standards for industrial chemicals’ as well as functions conferred by other provisions of the Bill, the rules or any other Act. Clause 143 provides that the Executive Director is appointed in writing by the Governor-General on a full-time basis. Under clause 144, that appointment must not be for more than five years. However, the Executive Director can be appointed to the role multiple times.[117] The conditions under which the Executive Director can be terminated by the Governor-General are set out in clause 151. These include, for example, misbehaviour, bankruptcy and not disclosing interests that could conflict with his or her duties.[118]

Clause 172 allows the Executive Director to use a computer program to make administrative decisions, with these decisions regarded as decisions made by the Executive Director. Subclause 172(3) proposes a safeguard, allowing the Executive Director to substitute a different decision if he or she is satisfied that the one from the computer program is wrong.[119]

Registration of introducers of industrial chemicals

Part 2 of the Industrial Chemicals Bill establishes the registration process for ‘introducers’ of industrial chemicals. Under clause 13, it is an offence for a person to introduce industrial chemicals into Australia without being registered for the relevant registration year (see Offences and Enforcement, below for more information, including on penalties). Registration years will begin on 1 September, with the first one starting in 2018.[120]

Under clause 15, certain details of registered introducers of industrial chemicals must be kept on a publically available Register, called the Register of Industrial Chemical Introducers. Clause 14 provides that the Register will be established by the Executive Director. Clause 20 provides that a registration charge will be applied, with clause 21 specifying that the amount charged will be determined under regulations made under the Charges (General), Charges (Excise) and Charges (Customs) Bills (these Bills are discussed in further detail later in this Digest). Under clause 16, a person can apply to the Executive Director for registration for a particular registration year provided his or her registration has not been cancelled by the Executive Director in the current registration year, or the previous three years, due to a contravention of the Act or the provision of false or misleading information. Provided that the application is in order, under subclause 17(1), registration must be granted by the Executive Director. Clause 19 provides the circumstances in which a registration may be cancelled; these include at the registered person’s request and on the Executive Director’s initiative if, for example, the registered person was convicted of an offence or subject to a civil penalty under the proposed Industrial Chemicals Act.[121]

The Consequential Amendments Bill ensures that businesses that are already validly registered to introduce chemicals under NICNAS will continue to be registered under the new regime. Under item 9 of Schedule 2 of that Bill, people already registered under the ICNA Act to introduce chemicals ‘immediately before 1 July 2018’ will be taken to be registered under the new regime for the 2018–19 registration year. Similarly, under item 10 of Schedule 2, an application for registration made under the old regime which are pending ‘immediately before 1 July 2018’ will be taken to be an application made under the new regime. This applies whether the application is a renewal or a new application.[122]

Industrial chemicals’ categorisation and assessment

Part 3 sets out six introduction categories for industrial chemicals: listed, exempted, reported, assessed, commercial evaluation and exceptional circumstances introductions. This is where the Government’s risk-based approach to assessment of industrial chemicals is being implemented. The different categories reflect different levels of indicative risk to human health and the environment (judged on both hazard and exposure) as well as different obligations to be met before and/or after introduction. These are further discussed under the individual type of introduction below. According to the Explanatory Memorandum, ‘[e]xempted, reported and assessed introductions are categorised based on indicative risk determined by the introducer in accordance with the rules’.[123] In contrast, ‘commercial evaluation and exceptional circumstances introductions are both authorisations based on particular circumstances for the introduction’.[124]

If an industrial chemical is introduced without authorisation under any of the six categories (that is, it does not meet any of the requirements), penalties may apply. Clause 24 provides both criminal offences and a civil penalty provision. See Offences and Enforcement, below for more information on offences and penalty.

Listed introductions

Clause 25 covers the introduction of listed industrial chemicals. This allows any registered introducer to introduce the industrial chemicals on the Inventory (see below for information on the Inventory), provided it is done in accordance with any restrictions listed in the Inventory. The Explanatory Memorandum shows that this category can have industrial chemicals with any level of indicative risk. No interaction with AICIS is required before introduction.[125]

Exempted introductions

Clause 26 provides that exempted introductions allow the introduction of industrial chemicals that are permitted under the rules made for this clause. The only detail provided in the Bill is a note in subclause 26(2) that ‘[a]n exempted introduction is an industrial chemical introduction that poses a very low risk to human health and the environment’. The Explanatory Memorandum explains that there is no requirement for a pre-introduction interaction with AICIS due to the very low risk of the introduction.[126] Examples of exempted introductions expected to be prescribed by the rules are:

•       chemicals introduced in limited amounts purely for research and development

•       low concern polymers[127]

•       an imported chemical that is not opened before being exported and

•       chemicals that meet the information requirements in the rules to show they pose ‘no hazards to human health or to the aquatic environment, no bioaccumulation potential and no persistence in the environment’.[128]

The lack of interaction with AICIS before introduction of chemicals in this category, combined with limited post-introduction records of introduced chemicals, has raised concerns amongst interest groups, Labor and the Greens. This is due to the possibility of new chemicals being introduced into Australia without any government records (see Introduction records, below). For example, PHAA discussed the resultant risks:

The PHAA and other community groups remain very concerned that the proposed new category for Exempted Chemicals will result in a large number of new chemicals being introduced into Australia without prior notification to the AICIS Regulator and without entry into any Government or public record...

This may contribute to reducing the regulatory burden on industry by about $23 million annually, but it is at an increased risk to the health of people and the environment. It is not sufficient that the only compliance requirement is an annual declaration with no reporting on the volume or identity of the chemical to be imported or manufactured in Australia.

…

Furthermore, many examples exist whereby chemicals, once thought to be non-hazardous, are later re-categorised as harmful. Absence of routinely [sic] data of chemical volumes, usage and location would negate any meaningful subsequent assessment of human risk.[129]

A further concern of the PHAA was the raised risk due to the categorisation of the chemicals being done by the introducer, as it ‘could lead to misclassification and insufficient incentive for introducers to collect the information on a chemical’s risks to people or the environment’.[130]

Reported introductions

Clause 27 provides that reported introductions must also be made in accordance with the relevant rules and it is noted that they pose ‘a low risk to human health or the environment’.[131] However, unlike exempted and listed introductions, which do not require any interaction with AICIS before introduction, a reported introduction is only authorised if ‘a pre-introduction report for the industrial chemical’ is submitted in accordance with clause 97 and the introduction meets the terms of that report.[132] Clause 97 provides that the pre-introduction report must include the information required under the rules and be given to the Executive Director before the first introduction of the particular industrial chemical. However the rules may specify that certain types of reported introduction are subject to different reporting requirements (subclause 97(4)), in which case the rules can specify information that must be given to the Executive Director before the first introduction while the remaining information must be submitted to the Executive Director within 12 months of the first introduction. Subclause 97(3) provides that the industrial chemical’s proper name and end use as well as the information the introducer used to determine that it was a reported introduction could (but does not have to) be information required for the report.

As is the case in relation to exempted introductions under subclause 26(3), the rules for reported introductions may include requirements related to the hazards of the industrial chemical to human health and/or the environment as well as the potential exposure (paragraphs 27(3)(a) to (d)). Additionally the rules may also prescribe that an introduction is a reported introductions if the chemical has been assessed by an international body. According to the Explanatory Memorandum, reported introductions ‘will generally be low risk introductions’, but:

… will also include the introduction of potentially higher risk chemicals that would otherwise be categorised as assessed introductions. This will be on the basis of a risk assessment or evaluation undertaken by, or in association with, a trusted international body (prescribed in the rules).[133]

The Explanatory Memorandum included ‘New Substance assessments by Environment and Climate Change Canada/Health Canada under the Canadian Environmental Protection Act 1999’ as an example of evaluations by trusted international bodies that could be included in the rules.[134]

Assessed introductions

Clause 28 provides that assessed introductions are only permitted where the introducer both has a relevant assessment certificate for the industrial chemical and the introduction meets the terms of the certificate. It is noted that this category is generally for medium to high risk introductions (whether the risk is to human health or the environment), and that normally an introduction of an unlisted industrial chemical which is not an exempted or reported introduction will fall in this category.[135]

Division 3 of Part 3 covers the administration of assessment certificates, including applications for certificates and the powers of the Executive Director in relation to the assessment. Under clause 31, applications must be made to the Executive Director; these can be made individually or jointly by multiple people. Clause 32 provides that the application must be considered by the Executive Director, who must include in the consideration:

•       any potential risks to the environment and human health as well as any conditions that may be required to control these risks

•       any further information requested in writing by the Executive Director under clause 33

•       submissions from the applicant on the draft assessment statement (which must be provided to the applicant under clause 36)

•       advice requested by the Executive Director under clause 34 from bodies prescribed under the rules

•       advice from the Gene Technology Regulator under clause 35, which provides that the Gene Technology Regulator must be asked for advice (but does not have to reply) if the relevant industrial chemical is or contains a genetically modified product.[136]

Clause 37 provides that, after considering the application, the Executive Director must decide to issue or not issue an assessment certificate. Subclause 37(7) states that the assessment statement must also be published on the website.[137] In general, decisions must be made within 70 working days.[138] Under clause 39, assessment certificates are valid until they are cancelled, the time has expired (if it contained a time condition), the chemical is listed on the Inventory or its listing is varied.

Assessment certificates can be cancelled on either the holder’s or Executive Director’s initiative. Clause 51 allows the holder of an assessment certificate to apply to the Executive Director for cancellation. This must be granted if all certificate holders agree. Clause 52 provides that the Executive Director can cancel an assessment certificate under his/her own initiative if particular requirements are met. These requirements include the completion of an evaluation of the introduction (see below for information on evaluations), with a published statement, where the Executive Director has concluded that that he/she is ‘not satisfied that the risks to human health or the environment from the introduction and use of the industrial chemical can be managed’.[139]

Commercial evaluation and exceptional circumstances introductions

Clauses 29 and 30, respectively, provide that commercial evaluation and exceptional circumstances introductions are only authorised if the person holds the relevant authorisation and the introduction meets the terms of the authorisation. Under clause 53, an application must be made to the Executive Director for a commercial evaluation authorisation. They are only granted under particular circumstances including that the introduction’s purpose is to assess the commercial applicability of the chemical and that the chemical will not be available to the public or released untreated into the environment. For example, the Explanatory Memorandum suggests that a commercial evaluation introduction could apply when a company wants to trial ‘an ingredient in house paint that needs weather testing, or a new ingredient in ink that needs testing to determine optimal application conditions’ to determine commercial advantage.[140] Under paragraph 59(1)(b), a commercial evaluation authorisation cannot be in force for greater than four years.  Similar to assessment certificates, under clause 66 the Executive Director can cancel an authorisation if he or she is ‘not satisfied that the risks to human health or the environment from the introduction and use of the industrial chemical can be managed’.[141] Under clause 166, a decision by the Executive Director to cancel a commercial evaluation authorisation is reviewable. Likewise, decisions to not issue, vary or not vary a term of the authorisation are reviewable.[142]

Subclause 67(1) provides that ‘the Minister may issue an exceptional circumstances authorisation for the introduction of an industrial chemical’. Exceptional circumstances authorisations will only be granted by the Minister after consultation with the Executive Director and if he or she is ‘satisfied that the introduction of the industrial chemical is in the public interest to address significant risks to human health or the environment’.[143] Neither the Bill nor the Explanatory Memorandum provides information on an application process (if any) for this type of introduction. The written authorisation granted by the Minister must include details such as the period of time for which the authorisation is valid and any conditions required to manage environmental and health risks.[144] Information on the exceptional circumstances authorisation, such as the name of the industrial chemical and that the exceptional circumstances authorisation applies for that chemical, must be published on the AICIS website.[145] The Explanatory Memorandum suggests that such an authorisation may apply to ‘an industrial chemical that is not otherwise authorised for use in Australia that can be imported and used to treat an oil spill that is threatening an Australian waterway’.[146]

Introduction records and oversight

Part 6 of the Industrial Chemicals Bill sets out information and reporting requirements relating to the new scheme.

In particular, clause 99 provides that introducers of industrial chemicals must make an annual declaration if they have introduced industrial chemicals in the relevant registration year. However, the legislation has no information on what must be included in the declaration, except that it must ‘contain the information prescribed by the rules for the purposes of this paragraph’.[147] It also says that information required by the rules ‘may include information about the categories of introductions of industrial chemicals made by the person during the year’.[148] The Explanatory Memorandum provides as an example of ‘[t]he types of matters to be included in annual declaration’ that a declaration may include whether or not exempt chemicals were introduced with a confirmation that ‘the relevant criteria are satisfied (tick boxes)’.[149] This means that the specific chemicals introduced as an exempted introduction in the new scheme are not required to be reported to the Government, as confirmed by the Department of Health in the Community Affairs Legislation Committee inquiry.[150]

Under clause 104, the introducer must keep records of all industrial chemicals introduced in a registration year, including their category and the information used by the introducer to determine the introduction category. The records must be kept for five years (from the beginning of the registration year following the introduction) and be provided to the Executive Director if requested.[151] Criminal offences and civil offences are available if records are not kept in accordance with clause 104 (the fault-based offence has a penalty of up to 300 penalty units, the strict liability offence a penalty of up to 60 penalty units and the civil penalty provision a penalty of up to 300 penalty units; see Offences and Enforcement for more information on offences).

Under the new chemical regime, the level of pre-market oversight of introduced chemicals will be reduced. There is no oversight by AICIS before the introduction of industrial chemicals in the exempted and listed categories. Pre-introduction assessments of industrial chemicals are predicted to fall by more than 70% under the new scheme, meaning that only approximately 0.3% of new chemicals will be assessed before introduction (from approximately 3%).[152] As well as this, it is the introducers that decide which categories their chemicals will fall into, rather than AICIS. While this reduces regulatory effort, as well as making it easier and cheaper for introducers, it also raises the potential of misclassification of the risks and hazards of chemicals. Although under clauses 99 and 104, offences exist for contravention of the annual declaration and record keeping requirements, the new regime does not appear to provide a safeguard against misclassification of introduced chemicals as exempted introductions.

Another problem which could be raised by the exempted introductions category is when new information comes to light about the hazards to the environment and health. Clause 100 appears to provide a potential safeguard from introducers not informing the Executive Director about new information which could cause a change of introduction category or conditions for an industrial chemical. Clause 100 does this by obliging relevant people to report new information about the hazards of industrial chemicals that they have introduced. However, this clause only applies to:

(a) a person who holds, or is covered by, an assessment certificate for the introduction of an industrial chemical; or

(b) a person who has introduced an industrial chemical within the previous 12 months:

              (i) for which there is an Inventory listing; and

              (ii) for which there is an assessment statement or evaluation statement.[153]

Exempted introductions would not fall under this provision. This means that even if new information suggests that the exempted chemical should be in a different introduction category and possibly have had limits put on its use, the introducer is not obliged to tell AICIS that information or even that they had introduced the chemical in the last 12 months.

The introduction of the new scheme means that there will not be a current-time record of the industrial chemicals being used in Australia due to AICIS only being informed of exempted and listed categories introductions after they occur (as mentioned above in the relevant introduction category). Indeed, as discussed above in relation to clause 99, it is likely that there will never be a complete record of introduced chemicals under the new regime. This could be highly problematic, as sometimes information becomes available showing that chemicals once believed safe are actually risky (for example, phthalates), and it will be impossible to track exposure to, and subsequent risk from, these chemicals without detailed records.[154] This possibility was mentioned by Labor Senators in their Additional comments to the Community Affairs Legislation Committee inquiry report, as well as the Greens in their dissenting report for the inquiry.[155]

As noted earlier in this Digest, another issue with the proposed industrial chemical introduction categories is the major reliance on the ‘rules’. There is very little detail in the primary legislation on the differences between the chemicals covered by reported, exempted and assessed introductions apart from the level of risk of the chemical. Even then, there is no detail on how the level of risk is defined, leaving that to delegated legislation. This means that despite the public consultation on the matters to be included in delegated legislation, [156] the Parliament will have limited oversight (basically consisting of the ability of either House of Parliament to disallow the rules) of how different risk-level chemicals should be checked before being allowed into the Australian market, and indeed, even what those levels of risk represent.

Evaluations

The Executive Director has the authority to initiate, at any time, evaluations of industrial chemicals and related matters under Part 4. There are two processes for conducting evaluations.

First, Division 2 of Part 4 provides for evaluations of chemical introductions authorised by an assessment certificate.[157] Under subclause 69(2), the assessment certificate holders must be given written notice of the planned evaluation, including the reasons for it, by the Executive Director. The process followed in the evaluation is similar to the process described for the original assessment for the assessment certificate (described above in ‘Assessed introductions’) except that in this situation, the time period for the evaluation will be specified in the notice of the proposed evaluation.[158] The Executive Director must take into account, under subclause 69(4), whether there are any human or environmental risks which would occur from the introduction and use of the industrial chemical as well as relevant information from the certificate holder. Clause 73 provides that the Executive Director must issue an evaluation statement containing information including a summary of the evaluation and any relevant risks, including, if risks were identified, the means to control these risks. As well as being published on the AICIS website, the Executive Director must give a copy to holders of the assessment certificate.

In Division 3 of Part 4, subclause 74(1) provides that the Executive Director can also initiate evaluations of ‘matters relating to industrial chemicals’. This includes evaluations of matters such as a class of industrial chemicals, hazards or exposure to an industrial chemical or class of them and the use of an industrial chemical or class of industrial chemicals.[159] An evaluation is required for a variation under clause 86.[160] Both initiation of an evaluation of this type and the final evaluation statement (which contains information including a summary of the evaluation and any relevant risks, including, if risks were identified, the means to control these risks), must be published on the AICIS website.[161]

Australian Inventory of Industrial Chemicals

A new inventory listing industrial chemicals is established under clause 80 in Part 5 of the Industrial Chemicals Bill. This inventory, the Australian Inventory of Industrial Chemicals (AIIC), will list the industrial chemicals that any registered introducer can introduce into Australia provided they follow any introduction restrictions included on the listing. Subclause 81(2) provides that the listing must include any introduction conditions related to: the volume of chemical able to be introduced, where the industrial chemical can be introduced or used and conditions prescribed by the rules.

The Consequential Amendments Bill provides for the continuation of previously listed chemicals in the new scheme. Items 39 and 40 in Schedule 2 of the Consequential Amendments Bill provide that the chemicals listed on AIIC will include the industrial chemicals which are listed on the old chemical inventory (AICS, under NICNAS) ‘immediately before’ 1 July 2018. Currently, there are over 40,000 industrial chemicals on the public (non-confidential) part of AICS.[162] Applications to have industrial chemicals listed on the inventory which are pending ‘immediately before’ 1 July 2018 will be taken to have been made under the new regime.[163] These transfers will apply whether the listing was under the confidential or non-confidential parts of the old inventory.

Clause 82 of the Industrial Chemicals Bill provides that industrial chemicals which have held a valid assessment certificate for five years will be added to the AIIC. Under clause 83, an industrial chemical with a valid assessment certificate that has been held for under five years can be added to the AIIC if the assessment certificate holder applies for it to be listed. Subclause 83(1) specifies that the industrial chemical can only be listed if the assessment certificate does not have a time restriction and if the industrial chemical is not already listed on the AIIC. Similar to the old inventory, proper chemical name or end use of the industrial chemical can be kept confidential for business reasons.[164]

Division 4 of Part 5 grants the Executive Director the power to vary industrial chemical listings on the Inventory. This can occur in the following situations:

•       under clause 85, minor variations to listings such as the correction of an error or the addition of information can be carried out provided there is no regulatory impact from the variation

•       clause 86 allows for variations after the Executive Director undertakes an evaluation

•       clause 87 provides for variation to reflect new assessment certificates and

•       clauses 88–93 allow for variations after a person applies to have the listing changed.

The Executive Director also has the power to remove the Inventory listing for industrial chemicals under limited circumstances. This includes where he or she:

•       is ‘not satisfied that the risks to human health or the environment from the introduction or use of the industrial chemical can be managed’ (subparagraph 95(1)(c)(i)) or

•       has concluded that the industrial chemical has been wrongly listed on the AIIC (subparagraph 95(1)(c)(ii)).

Removal in either situation can only occur after an evaluation and public consultation.[165] This could be very useful in situations where, like mentioned above, a chemical that was originally believed to pose little risk was found later to pose a significant risk to human health or the environment.

Offences and Enforcement

Offences

The Industrial Chemicals Bill contains numerous offences. The Explanatory Memorandum explains that, to allow a proportionate response to a breach of the Bill, all offences throughout the Bill have a fault based criminal offence (where both the physical element and fault element, for example, intention, apply), a strict liability criminal offence where only the physical element is required and there is no requirement to prove fault, and a civil penalty (which is established on the balance of probability).[166] This allows the Commonwealth to choose the provision under which to charge a person.[167] For example, as previously discussed, it is an offence under clause 13 to introduce industrial chemicals without being a registered introducer of industrial chemicals for the relevant registration year. Clause 13 sets out the three different offences for this action:

•          subclause 13(2) sets out a fault-based offence, with a penalty of up to 500 penalty units (currently equivalent to $105,000) for an individual or 2,500 penalty units ($525,000) for a body corporate[168]

•          subclause 13(3) sets out a strict liability offence, with a penalty of up to 60 penalty units ($12,600) for an individual or 300 penalty units ($63,000) for a body corporate and

•          subclause 13(4) sets out a civil penalty, with a penalty of up to 500 penalty units for an individual or 2,500 for a body corporate.[169]

Other examples of proposed contravention provisions under the Industrial Chemicals Bill and their penalties include:

•       clause 24, which provides that it is a contravention for a person to introduce an industrial chemical that is not authorised under any of the introduction categories. The maximum penalty for a fault-based offence is 500 penalty units, the maximum penalty for a strict liability offence is 60 penalty units and the maximum civil penalty is 500 penalty units and

•       clause 99, which provides that it is a contravention for a person to introduce an industrial chemical and not make the required declaration of introduction ‘within 4 months after the start of the last month’ of the registration year in which the chemical was introduced’.[170] The maximum penalty for a fault-based offence is 300 penalty units, the maximum penalty for a strict liability offence is 60 penalty units and the maximum civil penalty is 300 penalty units.

In the Industrial Chemicals Bill, all strict liability offences have a potential penalty of 60 penalty units while the fault-based offences and civil penalty provisions have potential penalties of either 300 or 500 penalty units (the same potential penalty applies for both the fault-based offence and civil penalty provision for a particular offence). Commentary on the new scheme has stated that ‘[i]t appears that, generally, the fault based and civil penalties are greater than the penalties under the current Act’.[171]

Enforcement

Part 7 provides for enforcement of the new regime through application of relevant provisions from the Regulatory Powers (Standard Provisions) Act 2014 (the Regulatory Powers Act). The Executive Director and authorised inspectors[172] are granted monitoring, investigation and enforcement powers so as to be able to enforce the obligations created under the Industrial Chemicals Bill. Monitoring powers are provided under Part 2 of the Regulatory Powers Act while investigation powers are provided under Part 3 of the Regulatory Powers Act. Enforcement, including civil penalties, infringement notices and injunctions, are provided under Parts 4 to 7 of the Regulatory Powers Act.[173]

The Industrial Chemicals Bill proposes to grant greater enforcement powers to the new scheme than were possessed under the old regime. However, concerns have been raised about the power placed in the hands of one individual (the Executive Director) as well as the lack of detail in the legislation and Explanatory Memorandum about the actual monitoring of compliance. As AMWU stated:

Part 7 of the Bill grants increased enforcement powers to NICNAS. These are strongly supported...

During the consultation phase NICNAS provided estimates on post market auditing – again there is no information provided in the [Explanatory Memorandum] on what actual monitoring will occur. If the “reforms” are to allow increased focus on “risky” chemicals, it is incumbent on the government to outline how this will be achieved – otherwise it appears to be a matter of “faith/trust” in the processes.

The Bill invests substantial powers and responsibilities in the Executive Director. These powers are necessary and appropriate however it makes the agency and the legislation, and their purpose, vulnerable to the correct appointment of one individual. This highlights a flaw in the mechanisms allowed for in the Bill eg if the Executive Director fails to use the provisions of Part 4 there are no governance arrangements that could rectify such a problem.[174]

Establishment of AICIS and the Special Account

The Australian Industrial Chemicals Introduction Scheme (AICIS) is established under clause 140 of the Industrial Chemicals Bill. Under section 100A of the ICNA Act, a special account was created for the operation of NICNAS. Subclause 155(1) provides for the special account to be continued under the new regime, albeit renamed the Industrial Chemicals Special Account. Under subclause 155(2), it is a special account under the Public Governance, Performance and Accountability Act 2013.

Application of international agreements

Similar to Part 5A of the ICNA Act, Part 9 of the Industrial Chemicals Bill implements obligations that Australia has under the Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade (Rotterdam Convention) and other international agreements that apply to the movement of industrial chemicals in or out of Australia.[175] The Rotterdam Convention aims to manage ‘the international trade of certain hazardous chemicals in order to protect human health and the environment from potential harm’ and ‘contribute to the environmentally sound use of those hazardous chemicals’ including by promoting information exchange on the chemicals’ characteristics.[176] As a result, Australia has legal obligations such as exchange of particular information about industrial chemicals.

Clause 159 provides that the Executive Director must inform Australia’s designated national authority if, for the reason of risks to human health or the environment, laws are made or actions taken by the Executive Director that have ‘the effect of banning or severely restricting the introduction or use of an industrial chemical’.[177] This applies whether they are laws or regulations under the proposed Industrial Chemicals Act or state or territory laws.[178] Under subclause 159(4), the designated national authority must then notify the Rotterdam Convention Secretariat to meet Australia’s obligations under the Rotterdam Convention. Under clause 160, relevant information about notified industrial chemicals must also be provided to the designated national authority so it can be given to the Rotterdam Convention Secretariat.[179]

Clause 161 provides that the Executive Director may obtain information from people who have ‘information or a document that it is reasonably necessary to obtain for the purpose of Australia’s compliance with its obligations under the Rotterdam Convention’.[180] Under clause 175, a person is not excused from providing the clause 161 information because of the possibility of self-incrimination, but they are provided with use and derivative use immunity.[181] As discussed earlier in this Digest, the Senate Standing Committee for the Scrutiny of Bills raised concerns in this context about removing the common law principle that excuses a person from giving evidence that will incriminate him or herself.

Subclause 163(1) also allows for industrial chemicals that are ‘the subject of a prescribed international agreement or a prescribed international arrangement’ to be banned from entering or leaving Australia or have conditions put on their entry or exit by the rules. Under subclauses 163(3) and 163(4), the Executive Director may give other countries, their relevant authorities and appropriate international organisations information on these industrial chemicals’ movements in or out of Australia. Interestingly, clause 163 applies whether or not Australia is actually a party to the international arrangement (although it must be a party to a prescribed international agreement).[182]

Cosmetics Standard

Part 3B of the ICNA Act currently provides for the Minister to determine standards cosmetics imported into, or manufactured in, Australia (see section 81). Under section 81A of the ICNA Act, it is an offence to import or manufacture a cosmetic that is subject to that standard if the cosmetic does not meet the standard. The penalty is up to 120 penalty units (equivalent to $25,200) for an individual or $126,000 for a body corporate.[183] The Cosmetics Standard 2007, made under section 81, currently sets standards for products including sunscreen, anti-bacterial skin products, acne products and anti-dandruff products.

The repeal of the ICNA Act by the Consequential Amendments Bill will mean that the Cosmetics Standard is no longer valid. However, the third consultation paper on the proposed reforms stated:

… Government has decided that NICNAS should be a chemical substance regulator, and that it should not have responsibility for regulating products. Government has agreed that the responsibility for administering the Cosmetics Standard should transfer from NICNAS to the ACCC [Australian Competition and Consumer Commission]. This change is intended to clarify the principal regulatory roles of each agency: NICNAS is to regulate chemicals introduced for ‘industrial’ purposes (including ingredients in cosmetics); and ACCC is the consumer product safety regulator.[184]

However, no mention of the Cosmetics Standard, or its future, is made in the Explanatory Memoranda or Second Reading Speech for any of the Bills. Further, no provision appears to have been made in the Bills for transferring the Cosmetics Standard or its equivalent to other legislation. While the ACCC does currently regulate the labelling of cosmetic products[185] (and product safety more generally[186]), it is not clear whether, for example, relevant legislation[187] will be amended to incorporate the standards currently set out in the Cosmetics Standard.

Animal testing

Clauses 103 and 168 are the primary provisions of the Industrial Chemicals Bill relating to animal testing for cosmetic purposes.[188] For the purposes of the Industrial Chemicals Bill, a cosmetic is ‘a substance or preparation intended for placement in contact with any external part of the human body’ to alter body odour, change its appearance, clean it, maintain it in good condition, perfume or protect it. It also includes a substance or preparation prescribed in the anticipated rules to the Industrial Chemicals Bill.[189] This includes, but is not limited to, perfume, shampoo and make up but does not extend to therapeutic goods under the Therapeutic Goods Act 1989 or as prescribed by the rules.[190] While clauses 103 and 168 do not ban cosmetic testing outright (discussed below), they restrict how the resulting data can be used in introducing (that is, importing or manufacturing)[191] industrial chemicals for cosmetic purposes in Australia.

Clause 168 prohibits the inclusion of animal test data obtained from tests conducted on or after 1 July 2018 in an application to introduce a new industrial chemical for an end use solely in cosmetics. This requirement is mandatory, subject to the corresponding rules. As the rules are not yet available, it is unclear how the rules might impact this provision.

Clause 103 does not propose any mandatory requirement but rather sets out that a rule may be made for the purposes of clause 102 which relates to the information keeping requirements connected with determining the category of introduction of an industrial chemical. If implemented in the rules, the requirement set out in subclause 103(2) would prohibit animal test data obtained from tests conducted on or after 1 July 2018 from being used in determining the category for introduction of an industrial chemical for an end use solely in cosmetics. The Explanatory Memorandum to the Industrial Chemicals Bill does not state why the provision is expressed in discretionary terms, but asserts that the intended effect of clause 103 is to actually prohibit the use of such animal test data to determine the category of introduction of a substance for cosmetic use, subject to the corresponding rules.[192] This may suggest that the Department intends that such a requirement will be made mandatory under the rules. However, clause 103 does not create any obligation for this to be the case.

If the subclause 103(2) requirement is in fact included in the rules, any contraventions of this will constitute an offence under clause 102 with a penalty of up to 300 penalty units for an individual or 1,500 penalty units for a body corporate.[193]

Scope of the changes

Application to substances for use ‘solely’ in cosmetics

The Industrial Chemicals Bill’s proposed restrictions on the use of animal test data in relation to introducing industrial chemicals apply only to those used solely in cosmetics. This has been criticised by some animal welfare interest groups as being too narrow in its application and even described as ‘a glaring and dangerous loophole’ by the Humane Society International and Humane Research Australia who contend that most ingredients for cosmetics have multiple end uses.[194] Of primary concern is that some introducers of cosmetic products might attempt to circumvent restrictions on the use of animal test data by claiming an industrial chemical (primarily for use in a cosmetic) is for multiple purposes. As such, the chemical would not be for use solely in a cosmetic and clauses 103 and/or 168 would not be triggered. Accordingly, the RSPCA suggests that the application of clauses 103 and 168 be broadened to include chemicals used ‘solely or substantially’ in cosmetics,[195] whereas Humane Society International and Humane Research Australia suggest removing the ‘sole use’ qualifier entirely.[196] This would reflect the EU approach which does not restrict the use of substances that are to be used only in a cosmetic product but restricts the use of substances that are to be used ‘exclusively or mainly’ (emphasis added) in a cosmetic product, with some exceptions.[197]

Historical animal test data

Clauses 103 and 168 do not apply to historical animal test data—that is, these restrictions only apply to data obtained by a test conducted after 1 July 2018. Data obtained before these dates can continue to be used. This is a similar approach to the animal testing restrictions in the EU Regulations, which were implemented in stages to allow manufacturers and importers time to adapt to the changes by developing and adopting non-animal testing methods. The EU marketing ban came into effect on 11 March 2009 for tests relating to most human health effects, with the exception of repeated-dose toxicity, reproductive toxicity and toxicokinetics[198] for which the marketing ban applied from 11 March 2013.[199]

Human health and environmental concerns

A submission from the Department of Health asserts that, following ‘extensive research’, the Australian population is generally supportive of the ban proposed in the Industrial Chemicals Bill provided that safety is not compromised.[200] According to the Explanatory Memorandum, the rules are likely to address this by prescribing limited circumstances in which animal test data may continue to be required to ensure the protection of human health or the environment.[201] This may be compared with the EU approach to animal testing for cosmetic purposes which only allows derogation from the animal testing ban where the ingredient cannot be replaced with a non-animal tested equivalent and ‘the specific human health problem is substantiated and the need to conduct animal tests is justified’.[202]

Clause 100 acts as a further safeguard to human health and the environment. This is achieved by requiring information, including information obtained through animal testing,[203] to be provided to the Executive Director if a hazard (or increased severity of a hazard) to human health or the environment becomes apparent after the introduction of an industrial chemical has been approved.

While the details of the human health and environmental exception in the Australian context are yet to be provided, it has the potential to undermine the purpose of clauses 103 and 168 to address animal welfare concerns, as is also a criticism of the EU provision.[204] The EU has partially addressed this concern with the establishment in 2011 of the European Union Reference Laboratory for alternatives to animal testing (EURL ECVAM) to meet the increasing need for new non-animal testing methods.[205]

Additionally, the EU’s Regulation (EC) No 1907/2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) was ‘adopted to improve the protection of human health and the environment from risks that can be posed by chemicals, while enhancing competitiveness of the EU chemicals industry’.[206] The European Commission and the European Chemicals Agency (ECHA) have attempted to clarify the apparent tensions between the REACH animal testing requirements and the aims of the EU Regulation to protect animal welfare. They noted:

·          Registrants of substances that are exclusively used in cosmetics may not perform animal testing to meet the information requirements of the REACH human health endpoints, with the exception of tests that are done to assess the risks to workers exposed to the substance. Workers in this context, refers to those involved in the production or handling of chemicals on an industrial site, not professional users using cosmetic products as part of their business (e.g. hairdressers).

·          Registrants of substances that are used for a number of purposes, and not solely in cosmetics, are permitted to perform animal testing, as a last resort, for all human health endpoints.

·          Registrants are permitted to perform animal testing, as a last resort, for all environmental endpoints.[207]

Constitutional limitations

The Commonwealth does not have constitutional jurisdiction to broadly regulate animal welfare—this power is generally held by the states. While it is not necessarily beyond the power of the Commonwealth to impose a comprehensive testing ban in some circumstances,[208] animal welfare objectives appear to be outside the objective of the Industrial Chemicals Bill to ‘provide for a national scheme to regulate the introduction of industrial chemicals in Australia’.[209] Accordingly, in contrast to the private members Bills put forward by the ALP and Greens, the Industrial Chemicals Bill does not attempt to impose an express ban on the testing of cosmetic products on animals, nor does it propose to create offences for the testing of cosmetics, or substances for use in cosmetics, on animals. Instead, the Industrial Chemicals Bill proposes restrictions on the use of animal test data by importers and manufacturers introducing industrial chemicals into Australia. While the Industrial Chemicals Bill does not directly state which constitutional powers provide its basis, clause 4 indicates that the Commonwealth is using the external affairs, constitutional corporations and constitutional trade powers. This binds most corporations to the laws in the Industrial Chemicals Bill without limiting the constitutional basis of the legislation.

Despite the Industrial Chemicals Bill’s broad impact, there are some situations in which it might be possible, although unlikely, to avoid scrutiny under the Industrial Chemicals Bill, for example, where an industrial chemical is introduced by a non-corporate entity for sale within a single state. However, the broad impact of the Industrial Chemicals Bill remains and by limiting the use of animal test data, it is expected that the demand for animal testing will reduce.[210]

However, such a testing ban may not be far away as, according to the Department of Health website, the Government will work with the states to implement an outright testing ban through their respective legislation, triggered by changes to the Code.[211] Such animal testing bans implemented by the states and territories would likely avoid possible constitutional barriers.

International free trade obligations

Regulating substances for use in cosmetic products affects the goods that may enter Australia. Consequently, the regulations should adhere to international trade laws to which Australia is party. Relevantly, the World Trade Organization (WTO) General Agreement on Tariffs and Trade (GATT), particularly article III(4) states:

[… t]he products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favourable than that accorded to like productions of national origin in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use.[212]

Clauses 103 and 168 appear to avoid discriminating between countries under international trade laws as the requirements for determining categorisation and making applications to introduce industrial chemicals apply equally to both international and domestic bodies.[213] However, the majority of Australian companies are, in practice, unlikely to rely on animal test data as it is not required, nor does testing appear to currently occur, for cosmetic purposes in Australia. Accordingly, the new requirements under the Industrial Chemicals Bill may place an additional burden on international companies who are required to undertake animal testing under laws of their own country, or where non-animal testing is expensive or unfeasible, by requiring these companies to undertake additional non-animal testing to comply.[214] However, Article XX of the GATT sets out a number of exceptions to its rules, which may arguably apply to the restrictions proposed by the Industrial Chemicals Bill. In particular, it could be contended that the requirements as described in the Industrial Chemicals Bill are necessary to protect public morals or animal life or health.[215]

In addition to issues arising from the GATT, clauses 103 and 168 may be considered ‘unnecessary obstacles to international trade’ under the WTO’s Agreement on Technical Barriers to Trade (TBT).[216] However, like the exceptions under Article XX of the GATT, such obstacles are acceptable if ‘necessary to fulfil a legitimate objective’ which includes the protection of animal life or health and the protection of public morals.[217] However, there may be potential problems with this justification. Difficulties are likely to centre on counter-arguments to the effect that animal tests are necessary for the protection of human life and health. On the other hand, such an argument could be rebutted if a range of alternative methods affording equivalent protection to consumers have been validated.

International trade law concerns have been raised in relation to the EU animal testing restrictions.[218] However, in the absence of any complaint being brought before the WTO to test these potentially discriminatory provisions, it is unclear whether a challenge to such provisions in the EU or the Industrial Chemicals Bill would be successful. Despite this, the EU has previously relied on the public morals exception under the GATT to defend its general ban on the sale and importation of seal products.[219] Unlike the animal testing provisions described in the Industrial Chemicals Bill, the question of human health was not raised during this complaint. As such, in the case of an animal testing ban for cosmetic ingredients and products to be used by humans, the animal health and moral protection exceptions will need to be balanced against arguments for the protection of human health.

As discussed above, the Commonwealth cannot regulate the introduction of chemicals outside of its jurisdiction and it is possible that there are entities within Australia that may not fall within the scope this jurisdiction. For example, a non-corporate entity may be able to manufacture an industrial chemical for supply within a state to another non-corporate entity. This is unlikely to occur but could raise issues relating to discrimination under the GATT and the TBT under the provisions discussed above.

Will animal testing continue?

In the absence of further regulation, it is likely that many companies will continue to undertake animal testing for cosmetic purposes to meet the requirements for sale in other countries. For example, animal testing is no longer required for the sale of domestic products in China but is still required for imported cosmetic products.[220] Additionally, the proposed requirements of the Industrial Chemicals Bill do not prohibit animal testing from being undertaken but do prohibit the data from being relied upon in applications to introduce, or categorise, the relevant chemical. Relevantly, the European Federation for Cosmetic Ingredients challenged Article 18(1)(b) of the EU Regulation in the Court of Justice of the European Union (CJEU), seeking clarification on whether animal testing undertaken to meet requirements of a non-EU country could be relied upon in applying to sell the products in the EU.[221] The CJEU confirmed that animal-tested cosmetic products cannot enter the EU market ‘if the resulting data is used to prove the safety of those products for the purposes of placing them on the EU market’.[222] However, this does not prevent companies from continuing to test on animals to access other markets where bans on animal testing do not apply, so long as the animal test data is not used to access the EU market. Clauses 103 and 168 are likely to perform in a similar way. However, while the Industrial Chemicals Bill does not ban the testing of cosmetics, or cosmetic ingredients, on animals or the sale of cosmetic ingredients that have been tested on animals, the practical effect of the Industrial Chemicals Bill may reduce the amount of cosmetics products being made available within Australia that have been tested on animals.

Notification and Assessment Amendment Bill

The Notification and Assessment Amendment Bill amends the ICNA Act to allow some parts of the broader changes under the new chemicals regime to begin before the new regime comes into effect. The major effects of this Bill will be changing the definition of a ‘polymer of low concern’ with associated changes to allow certain polymers to be introduced into Australia more easily.[223] This Bill also makes changes to reporting requirements, as set out in further detail below.

Item 2 replaces the existing definition of ‘polymer of low concern’ in subsection 5(1) of the ICNA Act. The Explanatory Memorandum explains that this will achieve greater similarity with the relevant United States and Canadian schemes.[224] The new definition for ‘polymer of low concern’ changes the definition by replacing one of the defined types of polymer. This results in a greater number of polymers covered by the definition of ‘polymer of low concern’.

Section 21 of the ICNA Act provides that a person must not introduce a new industrial chemical in Australia, except in certain circumstances. Item 3 inserts proposed paragraph 21(6)(d) into the ICNA Act, which will add polymers of low concern to the list of industrial chemicals that are allowed to be introduced into Australia. Under proposed subparagraph 21(6)(d)(ii), those introductions are required to meet any conditions prescribed by regulation. There is no detail on potential requirements in the Bill or Explanatory Memorandum. The effect of this amendment is that polymers that fall into this category will be able to be introduced without obtaining a certificate or permit from NICNAS.[225]

Certain reporting requirements under the ICNA Act are also removed by the Notification and Assessment Amendment Bill. Item 5 repeals section 40N of the ICNA Act, which currently specifies the circumstances in which annual reports must be provided to the Director of NICNAS. In other words, this removes the requirement of providing annual reports to NICNAS.

Item 6 repeals section 80Q of the ICNA Act, which removes the requirement for certain registered introducers to provide a statement including the value of relevant chemicals they introduced in a registration year. Item 7 proposes to replace subsection 80QA(1) of the ICNA Act, to change the way registration charges are calculated so that the calculation method is no longer dependent on the existence of these value statements. These changes are intended to reduce regulatory burden.[226]

Charges (General), Charges (Excise) and Charges (Customs) Bills

The Charges (General), Charges (Excise) and Charges (Customs) Bills (the Charges Bills) allow the Government to charge for registration of introducers of industrial chemicals. The Bills apply, respectively, to charges that are not excise or customs, charges that are excise, and customs charges. As noted earlier, the three Charges Bills are separate due to the Constitutional requirement for taxation, duties of excise and duties of customs to be dealt with in Bills that only include that individual, respective type of charge.[227]

Charging the introducers of industrial chemicals for registration allows the Government to cover the cost of the Industrial Chemicals Scheme, ensuring there is no financial impact on the Australian public.[228] However, this model has also been criticised by interest groups for potentially compromising the ability of the regulator to control industrial chemical introduction. For example, Cancer Council Australia said:

The structure needs to be carefully considered. The user pays model allows industry to place demands on NICNAS depicting itself as “customer demanding efficient service” rather than acting as an industry legitimately subject to reasonable regulation. This has the potential to compromise the capacity for NICNAS to fulfil its role as regulator.[229]

The AMWU also believes that this is a problem, and that ‘[a]t a minimum such systems require structures to guard against such outcomes. There are no proposals in the Bill which mitigate against the risk of “industry capture”’.[230]

Another issue, as noted by the Senate Scrutiny of Bills Committee (discussed earlier in this Digest), is that the Charges Bills contain no enforceable guidance on how the charges will be calculated, leaving it to regulations. Subclause 7(1) of each of the Charges Bills state that the charge amount will be prescribed or calculated with a method prescribed by the regulations. Under subclause 7(2), the charge amount could be related to value of the introduced industrial chemicals in the relevant registration year. In the Second Reading Speech for the Charges (General) Bill, the Assistant Minister for Health, Dr David Gillespie, said that including setting the amount of the charges ‘in regulations, as opposed to the act itself, provides the department with sufficient flexibility to ensure that these matters are appropriate in all circumstances’.[231]

The Explanatory Memoranda for the Charges Bills explain that it is ‘anticipated’ that the charge amount could be related to the value of the introduced chemical. They also explain that the method used for determining the charges will be included in a cost recovery implementation statement and subject for public consultation before introduction.[232] This does allow feedback on the charges from the public, including affected parties. However, given that the Charges Bills contain no limits on the regulatory power to determine the charge (for example, factors that need to be included in calculation or maximum amounts that can be charged), the parliamentary oversight of these charges is severely limited, consisting only of disallowance of the rules by either House of Parliament under section 42 of the Legislation Act. The Senate Standing Committee for the Scrutiny of Bills also raised this issue; see Senate Standing Committee for the Scrutiny of Bills, above for the Committee comments.

© Commonwealth of Australia

Creative Commons

With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia licence.

In essence, you are free to copy and communicate this work in its current form for all non-commercial purposes, as long as you attribute the work to the author and abide by the other licence terms. The work cannot be adapted or modified in any way. Content from this publication should be attributed in the following way: Author(s), Title of publication, Series Name and No, Publisher, Date.

To the extent that copyright subsists in third party quotes it remains with the original owner and permission may be required to reuse the material.

Inquiries regarding the licence and any use of the publication are welcome to webmanager@aph.gov.au.

Disclaimer: Bills Digests are prepared to support the work of the Australian Parliament. They are produced under time and resource constraints and aim to be available in time for debate in the Chambers. The views expressed in Bills Digests do not reflect an official position of the Australian Parliamentary Library, nor do they constitute professional legal opinion. Bills Digests reflect the relevant legislation as introduced and do not canvass subsequent amendments or developments. Other sources should be consulted to determine the official status of the Bill.

Any concerns or complaints should be directed to the Parliamentary Librarian. Parliamentary Library staff are available to discuss the contents of publications with Senators and Members and their staff. To access this service, clients may contact the author or the Library’s Central Enquiry Point for referral.

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.

[1].              The three related charges Acts are: Industrial Chemicals (Registration Charge—Customs) Act 1997; Industrial Chemicals (Registration Charge—Excise) Act 1997 and Industrial Chemicals (Registration Charge—General) Act 1997.

[2].              Australian Constitution, section 55.

[3].              The Explanatory Memorandum to the Industrial Chemicals Bill 2017 has a summary of each Part of the Industrial Chemicals Bill on page 4.

[4].              Industrial Chemicals Bill 2017, clause 2.

[5].              Consequential Amendments Bill, clause 2.

[6].              Notification and Assessment Amendment Bill, subclause 2(1), table item 2.

[7].              Charges (General) Bill, subclause 2(1), table item 2; Charges (Customs) Bill, subclause 2(1), table item 2; Charges (Excise) Bill, subclause 2(1), table item 2.

[8].              Department of Health Therapeutic Goods Administration (TGA), ‘Legislation and legislative instruments’, TGA website.

[9].              Food Standards Australia New Zealand (FSANZ), ‘Food law, treaties and agreements’, FSANZ website.

[10].              Australian Pesticides and Veterinary Medicines Authority (APVMA), ‘Legislative framework’, APVMA website, 7 April 2017.

[11].              National Industrial Chemicals Notification and Assessment Scheme (NICNAS), ‘What we do’, NICNAS website, 17 July 2017.

[12].              NICNAS, ‘How we work’, NICNAS website, 11 August 2017.

[13].              Department of Prime Minister and Cabinet (DPMC), Options for reforming the national industrial chemicals notification and assessment scheme: regulation impact statement, DPMC, Canberra, November 2014, p. 6.

[14].              D Gillespie, ‘Second reading speech: Industrial Chemicals Bill 2017’, House of Representatives, Debates, 1 June 2017, p. 6014.

[15].              DPMC, Options for reforming the national industrial chemicals notification and assessment scheme: regulation impact statement, op. cit., p. 6.

[16].              For more information on exempt chemicals, see NICNAS, ‘Chemicals exempt from notification’, NICNAS website, 25 July 2017.

[17].              DPMC, Options for reforming the national industrial chemicals notification and assessment scheme: regulation impact statement, op. cit., p. 6.

[18].              Ibid., p. 7.

[19].              Ibid.

[20].              F Nash (Assistant Minister for Health), Industrial chemical assessments simplified, media release, 26 May 2015.

[21].              For further information on the public consultation, see NICNAS, ‘Reforms’, NICNAS website, 24 July 2017.

[22].              Department of Health, ‘Implementing industrial chemicals reforms through the new Australian industrial chemical introduction scheme’, Department of Health website, 5 June 2017; D Gillespie (Assistant Minister for Health), Australian industrial chemicals reform, media release, 1 June 2017.

[23].              Australian Government National Health and Medical Research Council (NHMRC), Australian code for the care and use of animals for scientific purposes, 8th edn, Canberra, 2013.

[24].              Ibid., p. 1. The Code is implemented in state and territory legislation (and respective regulations) as follows: Animal Welfare Act 1992 (ACT), paragraph 21(a) and Part 4; Animal Research Act 1985 (NSW), particularly section 4; Animal Welfare Act (NT), section 24 and Part 5; Animal Care and Protection Act 2001 (Qld), section 91 and Chapter 4; Animal Welfare Act 1985 (SA), section 3 and Part 4; Animal Welfare Act 1993 (Tas), section 34; Prevention of Cruelty to Animals Act 1986 (Vic), section 7 and Part 3; Animal Welfare Act 2002 (WA), Part 2 and paragraph 94(2)(d).

[25].              Department of Health (DoH), Ban on the testing of cosmetics on animals: consultation paper, DoH, Canberra, March 2017, p. 6.

[26].              Australian code for the care and use of animals for scientific purposes, op. cit., p. 9.

[27].              Australian examples include a recommendation by the Senate Select Committee on Animal Welfare to ban Draize testing and introduction of the National Animal Welfare Bill 2003 by former senator Andrew Bartlett which proposed a ban on the use of animals for some scientific purposes involving cosmetics: Senate Select Committee on Animal Welfare, Animal experimentation, The Senate, Canberra, 1989, pp. xv and 97–124; National Animal Welfare Bill 2003, proposed section 80.

[28].              C O’Neil, National consultation on cosmetics and animal testing, report prepared for the Australian Labor Party, 17 September 2014, p. 4.

[29].              Liberal Party of Australia, The Coalition will ban cosmetic testing on animals, media release, 3 June 2016, p. 1.

[30].              See: DoH, Ban on the testing of cosmetics on animals, op. cit., pp. 11–12.

[31].                            Australian Government, ‘Part 2: expense measures’, Budget measures: budget paper no. 2: 2017–18, p. 104.

[32].              Australian Government Department of Health, Ban on the testing of cosmetics on animals, op. cit., p. 14.

[33].              D Gillespie, ‘Second reading speech: Industrial Chemicals Bill 2017’, House of Representatives, Debates, 1 June 2017, p. 6014.

[34].              First implemented by Directive 2003/15/EC which amended the Council Directive 76/768/EEC but is now enshrined in Article 18 of the  Regulation (EC) 1223/2009 (collectively, the EU Regulations): European Union, Council Directive 76/768/EEC of 27 July 1976, On the approximation of the laws of the member states relating to cosmetic products [1976] OJ L 262/169; European Union, Regulation (EC) No 1223/2009 of the European Parliament and of the Council of 30 November 2009 on cosmetic products (recast), [2009] OJ L 342/59, article 18.

              For further information on the EU animal testing ban see: European Commission, ‘Ban on animal testing’, European Commission website.

[35].              Prevention of Cruelty to Animals Law (Experiments on Animals) 5754-1994 and 5761-2001 (Israel), Chapter 3. Note that this is an unofficial translation of the statute which is otherwise in Hebrew.

[36].              Republic of India, The Gazette of India, No F No. X-11014/7/2013-DFQC, 21 May 2014, p. 2.

[37].                            Cosmetics Act (Republic of Korea), Article 15-2. This provision relates to the importation and sale of animal tested substances.

[38].              Animal Welfare Act 1999 (NZ), section 84A.

[39].              Ibid.

[40].              Parliament of Australia, ‘Senate Community Affairs Legislation Committee: Industrial Chemicals Bill 2017 and related Bills’, Parliament of Australia website.

[41].              Community Affairs Legislation Committee, Industrial Chemicals Bill 2017 [Provisions] and related bills, The Senate, Canberra, 2017, p. 27.

[42].              Ibid., p. 13.

[43].              Ibid., pp. 15–17

[44].              Ibid., pp. 19–25.

[45].              Senate Standing Committee for the Scrutiny of Bill, Scrutiny digest, 6, 2017, The Senate, 14 June 2017, p. 35.

[46].              Ibid.

[47].              Senate Standing Committee for the Scrutiny of Bill, Scrutiny digest, 8, Ministerial responses, 2017, The Senate, 9 August 2017, p. 20.

[48].              Ibid.

[49].              Industrial Chemicals Bill, subclause 161(1).

[50].              Senate Standing Committee for the Scrutiny of Bill, Scrutiny digest, 6, op. cit., p. 36.

[51].              Ibid.

[52].              Senate Standing Committee for the Scrutiny of Bill, Scrutiny digest, 8, op. cit., p. 22. Section 100H of the ICNA Act.

[53].              Ibid.

[54].              Senate Standing Committee for the Scrutiny of Bill, Scrutiny digest, 6, op. cit., p. 37; Subsection 14(2) of the Legislation Act 2003 states that ‘Unless the contrary intention appears, the legislative instrument or notifiable instrument may not make provision in relation to a matter by applying, adopting or incorporating any matter contained in an instrument or other writing as in force or existing from time to time’.

[55].              Senate Standing Committee for the Scrutiny of Bill, Scrutiny digest, 6, op. cit., p. 37.

[56].              Explanatory Memorandum, Industrial Chemicals Bill 2017, p. 99.

[57].              Senate Standing Committee for the Scrutiny of Bill, Scrutiny digest, 6, op. cit., p. 37.

[58].              Senate Standing Committee for the Scrutiny of Bill, Scrutiny digest, 8, op. cit., p. 24.

[59].              Ibid., p. 39.

[60].              Ibid.

[61].              Senate Standing Committee for the Scrutiny of Bill, Scrutiny digest, 8, op. cit., pp. 23–24.

[62].              Ibid., p. 24.

[63].              Senate Standing Committee for the Scrutiny of Bill, Scrutiny digest, 6, op. cit., p. 38.

[64].              Ibid; Explanatory Memorandum, Consequential Amendments Bill, p. 23.

[65].              Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 6, op. cit., p. 44.

[66].              Ibid., pp. 40–43.

[67].              Senate Standing Committee for the Scrutiny of Bill, Scrutiny digest, 8, op. cit., p. 25.

[68].              Ibid.

[69].              Ibid., pp. 25–26.

[70].              Labor Senators, Additional Comments, Community Affairs Legislation Committee, Industrial Chemicals Bill 2017 [Provisions] and related bills, op. cit., p. 15.

[71].              Ibid.; For more information on disallowance, see Parliament of Australia, ‘Brief Guides to Senate Procedure: No. 19 Disallowance’, Parliament of Australia website.

[72].              Labor Senators, Community Affairs Legislation Committee, Industrial Chemicals Bill 2017 [Provisions] and related bills, op. cit., p. 16.

[73].              Ibid.

[74].              For more information on IMAP, see NICNAS, ‘IMAP’, NICNAS website.

[75].              Labor Senators, Community Affairs Legislation Committee, Industrial Chemicals Bill 2017 [Provisions] and related bills, op. cit., p. 16.

[76].              Australian Greens, Dissenting Report, Community Affairs Legislation Committee, Industrial Chemicals Bill 2017 [Provisions] and related bills, op. cit., p. 20.

[77].              Ibid., p. 21.

[78].              Ibid., pp. 22–23.

[79].              Ibid., p. 16.

[80].              Ibid.

[81].              Ibid., pp. 23–25.

[82].              Ibid., p. 25.

[83].              Australian Labor Party (ALP), Labor national platform: a smart, modern, fair Australia, ALP policy document, 18 August 2015, p. 151; Australian Greens, Election 2016: what the Greens will do for Australia, Australian Greens policy document, Election 2016, p. 37.

[84].              Parliament of Australia, ‘End Cruel Cosmetics Bill 2014 homepage’, Australian Parliament website.

[85].              Parliament of Australia, ‘Ethical Cosmetics Bill 2016 homepage’, Australian Parliament website.

[86].              Australia, Senate, Journals, 70, 2013–14, p. 1897.

[87].              Ethical Cosmetics Bill 2016, proposed subsections 81B(5)–(6); End Cruel Cosmetics Bill 2014, proposed subsection 81B(1).

[88].              Ethical Cosmetics Bill 2016, proposed subsections 81B(1)–(2).

[89].                            End Cruel Cosmetics Bill 2014, proposed subsections 81B(2)–(3).

[90].              Ethical Cosmetics Bill 2016 homepage, op. cit.; End Cruel Cosmetics Bill 2014 homepage, op. cit.

[91].              Chemistry Australia, Submission to Senate Standing Committee, Inquiry into the Industrial Chemicals Bill 2017 and related Bills, 12 June 2017, p. 1; Dow Chemical (Australia), Submission to Senate Standing Committee, Inquiry into the Industrial Chemicals Bill 2017 and related Bills, 9 June 2017, p. 1.

[92].              ACCORD, Submission to Senate Standing Committee on Community Affairs, Inquiry into Industrial Chemicals Bill 2017 and related Bills, 9 June 2017, p. 1.

[93].              PHAA, Submission to Senate Standing Committee, Inquiry into the Industrial Chemicals Bill 2017 and related Bills, 9 June 2017, p. 5.

[94].              Ibid.

[95].              National Toxics Network, Submission to Senate Standing Committee, Inquiry into the Industrial Chemicals Bill 2017 and related Bills, June 2017, p. 3.

[96].              Cancer Council Australia, Submission to Senate Standing Committee, Inquiry into the Industrial Chemicals Bill 2017 and related Bills, 9 June 2017, p. 1.

[97].              Ibid., pp. 1–2.

[98].              AMWU, Submission to Senate Standing Committee, Inquiry into the Industrial Chemicals Bill 2017 and related Bills, June 2017, p. 2.

[99].              Parliament of Australia, ‘Senate Community Affairs Legislation Committee: Industrial Chemicals Bill 2017 and related Bills’, op. cit.

[100].              Be Cruelty-Free Australia (Humane Society International (Global and Australia) and Humane Research Australia), Submission to Senate Standing Committee, Inquiry into the Industrial Chemicals Bill 2017 and related Bills, 9 June 2017; RSPCA, Submission to Senate Standing Committee, Inquiry into the Industrial Chemicals Bill 2017 and related Bills, 9 June 2017.

[101].              RSPCA, op. cit., pp. 1–2.

[102].              Be Cruelty-Free Australia, op. cit., p. 1.

[103].              Ibid.; RSPCA, op. cit.

[104].              Be Cruelty-Free Australia, op. cit., p. 2; RSPCA, op. cit., p. 2.

[105].              Explanatory Memorandum, Industrial Chemicals Bill, p. 4; Explanatory Memorandum, Consequential Amendments Bill, p. 2; Explanatory Memorandum, Notification and Assessment Amendment Bill , p. 1; Explanatory Memorandum, Charges (General) Bill 2017, p. 1; Explanatory Memorandum, Charges (Customs) Bill 2017, p. 1; Explanatory Memorandum, Charges (Excise) Bill 2017, p. 1.

[106].              Explanatory Memorandum, Industrial Chemicals Bill, p. 4.

[107].              The Statements of Compatibility with Human Rights can be found at pages 5–10 of the Explanatory Memorandum to the Industrial Chemicals Bill, pages 3–5 of the Explanatory Memorandum to the Consequential Amendments Bill, pages 2–3 of the Explanatory Memorandum to the Notification and Assessment Amendment Bill, and page 2 of the Explanatory Memoranda for each of the Charges (General) Bill, Charges (Customs) Bill and Charges (Excise) Bill.

[108].              Parliamentary Joint Committee on Human Rights, Report, 5, 2017, Canberra, 28 March 2017, p. 49 and Report, 7, 2017, 8 August 2017, p. 36 footnote 1.

[109].              Unless otherwise identified, references to clauses in this part of the Digest are to clauses of the Industrial Chemicals Bill.

[110].              AMWU, op. cit., p. 3.

[111].              Legislation Act 2003, section 42.

[112].              Cancer Council Australia, op. cit.; AMWU, op. cit.; NICNAS, ‘Reforms’, NICNAS website.

[113].              Industrial Chemicals Bill, clause 7.

[114].              Explanatory Memorandum, Industrial Chemicals Bill, p. 18.

[115].              Ibid.

[116].              Industrial Chemicals Bill, subclauses 11(3) and (5).

[117].              Ibid., Note to clause 144.

[118].              Ibid., clause 149, paragraphs 151(1)(a), 151(2)(d) and subparagraph 151(2)(a)(i).

[119].              For a more detailed discussion of the use of computers in administrative decision-making, see for example, S Power and A Grove, National Health Amendment (Pharmaceutical Benefits) Bill 2016, Bills digest, 66, 2016–17, Parliamentary Library, Canberra, 2017.

[120].              See the definition of ‘registration year’ in clause 9 of the Industrial Chemicals Bill.

[121].              Industrial Chemicals Bill, subclauses 19(1), 19(2).

[122].              Consequential Amendments Bill, paragraph 10(1)(a).

[123].              Explanatory Memorandum, Industrial Chemicals Bill, p. 22.

[124].              Ibid.

[125].              Explanatory Memorandum, Industrial Chemicals Bill, pp. 22–23.

[126].              Ibid.

[127].              Note that these are currently defined in the ICNA Act, and the definition is proposed to be amended by the Notification and Assessment Amendment Bill (as discussed further later in this Digest).

[128].              Explanatory Memorandum, Industrial Chemicals Bill, p. 25.

[129].              PHAA, op. cit., pp. 6–7.

[130].              PHAA, op. cit., p. 7.

[131].              Industrial Chemicals Bill, Note to subclause 27(2).

[132].              Industrial Chemicals Bill, paragraphs 27(1)(b), 27(1)(c).

[133].              Explanatory Memorandum, Industrial Chemicals Bill, pp. 25, 26.

[134].              Ibid., p. 26.

[135].              Industrial Chemicals Bill, clause 28, Note 1.

[136].              Ibid., subclause 32(3).

[137].              Note that the assessment statement is distinct from the assessment certificate. The assessment statement must include certain information, as specified in the definition of assessment statement in clause 9. This includes, for example, the name of the chemical and a summary of the assessment and any risks to human health or the environment from the introduction or use of the industrial chemical.

[138].              Ibid., subclause 32(2).

[139].              Under clause 166 of the Industrial Chemicals Bill, all decisions by the Executive Director related to ‘Assessed Introductions’ are reviewable decisions.

[140].              Explanatory Memorandum, Industrial Chemicals Bill, p. 37.

[141].              Industrial Chemicals Bill, subclause 66(1).

[142].              Ibid., subclause 166(1).

[143].              Ibid., subclause 67(2).

[144].              Ibid., subclause 67(3).

[145].              Ibid., subclause 67(5).

[146].              Explanatory Memorandum, Industrial Chemicals Bill, p. 43.

[147].              Industrial Chemicals Bill, paragraph 99(2)(b).

[148].              Ibid., subclause 99(3).

[149].              Explanatory Memorandum, Industrial Chemicals Bill, p. 59.

[150].              Labor Senators, Additional comments, op. cit., p. 15.

[151].              Industrial Chemicals Bill, subclauses 104(3), 104(4).

[152].              NICNAS, ‘About the NICNAS reforms’, NICNAS website.

[153].              Industrial Chemicals Bill, subclause 100(1).

[154].              AMWU, op. cit., pp. 4, 6.

[155].              Labor Senators, Additional comments, op. cit., pp. 15–16; Australian Greens, Dissenting report, op. cit., pp. 19–21.

[156].              NICNAS, ‘Development of reforms implementation detail’, NICNAS website.

[157].              This is the evaluation that is required to vary or cancel an assessment certificate under clauses 50 and 52.

[158].              Industrial Chemicals Bill, subclause 69(3).

[159].              Ibid., subclause 74(2).

[160].              Ibid., Part 5 and clause 78, Note 1. However, evaluations are not required for minor variations: see clause 85. 

[161].              Ibid., subclauses 74(3), 78(3).

[162].              NICNAS, ‘Chemical inventory (AICS)’, NICNAS website.

[163].              Consequential Amendments Bill, items 41 and 42.

[164].              Industrial Chemicals Bill, Part 6, Division 4.

[165].              Ibid., paragraph 95(1)(b).

[166].              See further Chapter 2 of the Criminal Code Act 1995 (Criminal Code), which sets out the general principles of criminal responsibility that apply to Commonwealth offences.

[167].              Explanatory Memorandum, Industrial Chemicals Bill, pp. 12–14.

[168].              As of August 2017, one penalty unit is equal to $210: Crimes Act 1914, subsection 4AA. Subsection 4B(3) of the Crimes Act 1914 provides that the maximum penalty applicable to a corporation convicted of a Commonwealth offence is five times the maximum penalty that could be imposed on an individual. 

[169].              Paragraph 82(5)(a) of the Regulatory Powers (Standard Provisions) Act 2014 provides that for civil penalty provisions enforceable under that Act, the maximum pecuniary penalty for a body corporate is five times the pecuniary penalty specified for the provision.

[170].              Industrial Chemicals Bill, paragraph 99(1)(b).

[171].              C Covington and C Loos, ‘Industrial Chemicals Bill 2017: A new era of regulation in Australia’, Corrs In Brief, Corrs Chambers Westgarth lawyers, 23 June 2017.

[172].              Under clause 137, the Executive Director may appoint an Executive Level 1 APS employee (or higher) as an authorised inspector.

[173].              For further information on the Regulatory Powers Act, see C Raymond, Regulatory Powers (Standardisation Reform) Bill 2016, Bills digest, 42, 2016–17, Parliamentary Library, Canberra, 22 November 2016.

[174].              AMWU, op. cit., p. 4.

[175].              Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade, done at Rotterdam 10 September 1998, [2004] ATS 22 (entered into force for Australia 18 August 2004).

[176].              Secretariat of the Rotterdam Convention, ‘Overview’, Rotterdam Convention website.

[177].              Industrial Chemicals Bill, clauses 158, 159.

[178].              Ibid., paragraphs 159(2)(b), 159(2)(c).

[179].              ‘Notified industrial chemical’ is defined as ‘an industrial chemical that has at any time been the subject of a notification by Australia, or any other Party to the Rotterdam Convention, under paragraph 1 or 2 of Article 5 of the Rotterdam Convention’; Industrial Chemicals Bill, clause 9.

[180].              Industrial Chemicals Bill, subclause 161(1).

[181].              Use immunity means that the information or evidential material given, and the fact that the person has given the information or evidence, is not admissible evidence in criminal proceedings against that person (paragraph 175(2)(a) and (b) of the Industrial Chemicals Bill). Derivative use immunity means that any information, document or thing obtained as a direct or indirect consequence of the person having given information or evidence is not admissible in criminal proceedings against that person (paragraph 175(2)(c)). See C Raymond, Regulatory Powers (Standardisation Reform) Bill 2016, op. cit., p. 54.

[182].              C Covington and C Loos, ‘Industrial Chemicals Bill 2017: A new era of regulation in Australia’, Corrs In Brief, Corrs Chambers Westgarth lawyers, 23 June 2017. See also the definitions of ‘prescribed international agreement’ and ‘prescribed international arrangement’ in clause 9.

[183].              As of August 2017, one penalty unit is equal to $210: Crimes Act 1914, subsection 4AA. Subsection 4B(3) of the Crimes Act 1914 provides that the maximum penalty applicable to a corporation convicted of a Commonwealth offence is five times the maximum penalty that could be imposed on an individual. 

[184].              NICNAS, ‘Consultation Paper 3: Other changes’, NICNAS website, 29 April 2016.

[185].              ACCC Product Safety Australia, ‘Cosmetics ingredients labelling’, ACCC website.

[186].              ACCC, ‘ACCC Role’, ACCC website.

[187].              This includes, in particular, the Trade Practices (Consumer Product Information Standards) (Cosmetics) Regulations 1991.

[188].              A cosmetic is defined in clause 9 of the Bill and includes, but is not limited to, perfume, shampoo and make up but does not extend to therapeutic goods under the Therapeutic Goods Act 1989.

[189].              Industrial Chemicals Bill, clause 9.

[190].              Ibid.

[191].              Ibid.

[192].              Explanatory Memorandum, Industrial Chemicals Bill 2017, p. 61.

              The corresponding rules are yet to be handed down. Accordingly, assertions as to their content are speculation based on supporting documentation to the Bill and other secondary sources.

[193].              Industrial Chemicals Bill, subclauses 102(4)–(6). As noted earlier, one penalty unit is currently $210. Penalty units are reviewed every three years.

[194].              Be Cruelty-Free Australia, op. cit., p. 2. See also: RSPCA, op. cit.

[195].              RSPCA, Submission to Senate Standing Committee on Community Affairs, op. cit., p. 2.

[196].              Humane Society International and Humane Research Australia, Submission to Senate Standing Committee on Community Affairs, op. cit., p. 2.

[197].              European Union, Regulation (EC) No 1223/2009 of the European Parliament and of the Council of 30 November 2009 on cosmetic products (recast), [2009] OJ L 342/59, article 2.

[198].              ‘Toxicokinetics’ describes how the body handles a chemical as a function of dose and time in terms of the rate of chemical absorption from the site of application into the blood stream, the rate and extent of chemical movement out of the blood into the tissue (known as ‘distribution’), the rate and extent of chemical biotransformation into metabolites (that is, metabolism) and the rate of chemical removal from the body (that is, excretion): European Union Reference Laboratory for Alternatives to Animal Testing (EURL ECVAM), ‘Toxicokinetics’, EURL ECVAM website.

[199].              European Union, Regulation (EC) No 1223/2009 of the European Parliament and of the Council of 30 November 2009 on cosmetic products (recast), [2009] OJ L 342/59, article 18.2.

[200].              Australian Government Department of Health, Submission to Senate Standing Committee on Community Affairs, Inquiry into the Industrial Chemicals Bill 2017 and related Bills, 12 June 2017, p. 5. Broad public support for an animal testing ban was also identified in Labor’s cosmetics and animal testing policy consultation in 2014 during which it received 13,680 public submissions: C O’Neil MP, National consultation on cosmetics and animal testing, op. cit., p. 4.

[201].              Explanatory Memorandum, Industrial Chemicals Bill 2017, pp. 61 and 93. This is again repeated in: Australian Government Department of Health, Implementing reforms to the National Industrial Chemicals Notification and Assessment Scheme (NICNAS), consultation paper prepared by the Australian Government Department of Health, June 2017, pp. 93–94.

[202].              See: European Union, Regulation (EC) 1223/2009 on Cosmetics, article 18.2.

[203].              Note that clause 100 of the Industrial Chemicals Bill does not explicitly refer to animal testing but it does not preclude it either.

[204].              J Klein, ‘EU cosmetics directive and the ban on animal testing: compliance, challenges and the GATT as a potential barrier to animal welfare’, Transnational Law and Contemporary Problems, 21(251), 2012, p. 262, HeinOnline database.

[205].              EURL ECVAM, European Union Reference Laboratory for Alternatives to Animal Testing website. Note that EURL ECVAM was formerly named the European Centre for the Validation of Alternative Methods.

[206].              European Chemicals Agency (ECHA), REACH, ECHA website.

[207].              European Commission and ECHA, ‘Clarity on interface between REACH and the Cosmetics Regulation’, ECHA/NA/14/46, Helsinki, 27 October 2014. Despite this clarification, it is unclear whether the reference to chemicals of which the purpose is ‘exclusively or mainly’ cosmetic in Article 2 of the EU Regulations continues to apply.

[208].              Such as under the constitutional corporations and constitutional trade powers.

[209].              Industrial Chemicals Bill, clause 7.

[210].              Department of Health, ‘Ban on cosmetic testing on animals’, Department of Health website.

[211].              Ibid.

[212].              General Agreement on Tariffs and Trade entry into force in Marrakesh, 1 January 1995, [1995] ATS 8 (entered into force for Australian and generally on 1 January 1995), Appendix, article III:4.

[213].              ACCORD also supports the clauses stating that ‘that the negative trade policy scenarios [an expert report commissioned by ACCORD] reported are not believed to be triggered by the Bill’s provisions, as drafted’.: ACCORD, Submission to Senate Standing Committee on Community Affairs, op. cit., p. 4.

[214].              Klein, ‘EU cosmetics directive and the ban on animal testing’, op. cit., p. 270.

[215].              GATT, op. cit., Appendix, article XX(a) (protection of public morals) and XX(b) (protection of human, animal or plant life or health).

[216].              Agreement on Technical Barriers to Trade opened for signature 15 April 1994, 1868 UNTS 120 (entered into force 1 January 1995), article 2. ‘Technical regulation’ is defined in Annex 1 of the TBT and includes ‘administrative provisions, with which compliance is mandatory’.

[217].              Ibid., article 2.2.

[218].              For example, see: Klein, ‘EU cosmetics directive and the ban on animal testing’, op. cit., pp. 268–272; K Cook and D Bowles, ‘Growing pains: the developing relationship of animal welfare standards and the world trade rules’, Review of European Community and International Environmental Law, 19(2), 2010, pp. 230–238, Ebsco Host database.

[219].                            See: WTO, European Communities: Measures Prohibiting the Importation and Marketing of Seal Products: Reports of the Appellate Body WT/DS400/AB/R and WT/DS401/AB/R, 22 May 2014.

                            This was an appeal of a WTO Panel decision on a complaint brought by Canada and Norway against the EU. In summary, Norway and Canada claimed that they were suffering discrimination against WTO trade principles because their seal products were not being afforded access to the EU market while, in specific circumstances, select countries (such as Greenland) were allowed access through an exception to the restrictions allowing seal products derived from Inuit hunts and those obtained from hunts for marine resource management purposes. The WTO Appellate Body found that the EU’s animal welfare objectives in prohibiting the sale or importation of seal products fell within the scope of Article XX(a) of the GATT on the grounds that the measure is necessary to protect public morals. However, the prohibition was still found to be unjustifiable where seal products were derived from hunts by Inuit or indigenous communities or hunts for marine resource management purposes as the EU did not demonstrate that the restrictions met the requirements of Article XX of the GATT.

                            Useful summaries of these disputes, including a one-page summary of the key findings, can be found on the WTO website for Canada’s complaint and Norway’s complaint.

[220].              Z Sheftalovich, ‘Testing times’, Choice.com.au, May 2013.

[221].              A press release of the Court of Justice of the European Union provides a helpful summary of the matter: Court of Justice of the European Union, EU law protects the EU market from cosmetic products containing ingredients which have been tested on animals, Press Release No 105/16, 21 September 2016.

[222].              European Federation for Cosmetic Ingredients v Secretary of State for Business, Innovation and Skills, Attorney General (Court of Justice of the European Union, C-592/14, 21 September 2016). Note that the EU also bans the testing of cosmetics and the substances used in cosmetics on animals that does not take place in the EU, subject to limited exceptions.

[223].              A polymer is a large molecule made up of many repeating small units: see the ICNA Act, section 5. An example of a common synthetic polymer is polystyrene.

[224].              Explanatory Memorandum, Notification and Assessment Amendment Bill, p. 5.

[225].              Ibid., p. 6.

[226].              Ibid., pp. 6–7.

[227].              Australian Constitution, section 55.

[228].              Gillespie, ‘Second reading speech: Industrial Chemicals Bill 2017’, op. cit., p. 6014.

[229].              Cancer Council Australia, op. cit., p. 1.

[230].              AMWU, op. cit., p. 2.

[231].              Gillespie, ‘Second reading speech: Industrial Chemicals Charges (General) Bill 2017’, op. cit., p. 6017.

[232].              Explanatory Memorandum, Charges (General) Bill, p. 4; Explanatory Memorandum, Charges (Customs) Bill, p. 4; Explanatory Memorandum, Charges (Excise) Bill 2017, p. 4.