The regulatory framework for industrial chemicals (including the role of NICNAS)On the whole, stakeholders agreed that the industrial chemicals regulatory framework is complex, and that a lack of clarity and fragmentation poses a challenge. Numerous examples were provided to demonstrate this point. For example, it was suggested that:
- while NICNAS operates alongside three other Australian Government regulators and the relationship between the agencies is intended to be complementary, in practice there are challenges to ensuring that roles and responsibilities are clear and that there is no duplication of effort
- there is a lack of clarity around responsibility for policy compared to regulation. Questions were raised as to who is responsible for issuing statements and advice in relation to government policy, interpretation of policy and risk communication
- regulatory interventions at both Commonwealth and state and territory levels leads to different regulatory outcomes and inefficiency for industry participants having to navigate through a large number of pieces of legislation
- the risk tolerance of NICNAS and the approaches to different risk-level applications could be improved, with more transparency and communication of the acceptable level of risk
- the fragmented regulatory system creates ‘gaps’ in regulation – particularly in relation to management of risks to environment, health and national security.
The issue which attracted the most comment was that of NICNAS’ role within the industrial chemicals framework. It is also an issue on which there was diverse range of views.
On the one hand, some stakeholders suggested that:
- NICNAS’ role is too narrowly defined and there is little or no scope to ban or restrict the use of dangerous chemicals; to track and monitor use; and to respond to risks which emerge post-market
- there are current ‘gaps’ in the regulatory system such that there are circumstances in which chemicals can be introduced into Australia, without adequate conditions of use, because there is no clear risk manager or there is a delay in risk managers considering the NICNAS recommendations and imposing any necessary conditions for safe use
- NICNAS should have the power to impose conditions, restrict or ban chemicals.
NICNAS assessment of new industrial chemicalsA number of issues were raised in relation to NICNAS’ assessment of new chemicals. Comments were made about:
- the complex assessment processes
- the fact that the various exemptions, permits and certificates are not easily understood by industry (noting that there are approximately 30 different notification categories)
- the misalignment in the risk posed by new chemicals within specific notification and assessment categories and the resources expended in undertaking the assessments
- the lack of international harmonisation. A number of stakeholders expressed concern about the duplication of assessment effort where chemicals have been subject to contemporary evaluations in jurisdictions such as Europe and North America. It was variously suggested that:
- NICNAS should better align its regulatory processes with those of other countries
- NICNAS should use information generated overseas, including regulatory assessments, to ensure more timely assessments
- Australia could consider adopting a system more like the European Union REACH framework – which is a single legal model for the Registration, Evaluation, Authorisation and Restriction of Chemicals which has replaced over 40 separate EU laws
- NICNAS should adopt lists of banned/restricted use chemicals in the EU, Canada, USA and UK to ensure that the Australian community is not exposed to such chemicals
- NICNAS should have the capacity to consider overseas assessments but should continue to be able to take into account unique Australian conditions and not be bound by the decision of a foreign government as to whether a chemical is safe for introduction in Australia
- the lack of flexibility for NICNAS to deal with chemicals introduced in low concentrations, such as fuel additives
- the limited ability of NICNAS to undertake urgent assessments or re-assessments in response to issues of immediate concern, such as product recalls
- the potential ‘gaps’ in regulatory coverage when NICNAS makes recommendations to risk managers and there is no other relevant risk manager or a delay in consideration of the recommendations or imposition of risk management conditions.
NICNAS assessment of existing industrial chemicalsMany stakeholders expressed concern about the slow progress NICNAS has made in assessing the approximately 38,000 existing and unassessed chemicals on the Australian Inventory of Chemical Substances (AICS).
Following are some of the different observations made by stakeholders in relation to existing chemicals:
- a more effective system for prioritisation is required. It was, however, acknowledged that a new assessment and prioritisation framework is being introduced on 1 July 2012 which will enable the screening and assessment of 3,000 chemicals over 4 years
- the Priority Existing Chemical (PEC) assessment process is rigid and cumbersome and does not provide for adequate flexibility to provide rapid assessment and response
- there is a lack of data for NICNAS to identify appropriate priority existing chemicals and an inability to identify which of the 39,000 chemicals on AICS are not in use.
- enabling NICNAS to accept international assessment outcomes from recognised countries. It was suggested that this would reduce the cost to industry and would enable NICNAS to focus its attention on those chemicals that have not already been assessed by other countries
- providing government funding to enable NICNAS to expedite the assessment of existing chemicals.
NICNAS post-market monitoring and enforcementA number of stakeholders commented on NICNAS’ inability to undertake comprehensive post-market monitoring and enforcement of compliance.
Some specific areas of concern included:
- NICNAS’ inability to track, use and gather data (resulting in a limited understanding of the longer term effects of chemicals in Australia)
- NICNAS’ lack of modern, graduated compliance tools to adequately address enforcement issues that arise
- the absence of any mandatory system of adverse reporting
- the regulator does not have the basic power to be able to ban chemicals that have been banned overseas or shown to be harmful to human health or the environment.
Specific issuesWhile most submissions focused on the systemic problems (for example the role of NICNAS, the lack of NICNAS powers to restrict use or ban, the lack of acceptance of international assessment outcomes etc), a number of submissions highlighted particular chemicals of concern or aspects of regulation which are problematic for certain classes of chemical.
For example, concerns were expressed about:
- the regulation of fuel additives (which has limited the choice of available fuel cargoes in short fuel market situations)
- the regulation of cosmetics (which covers formulated products delivered
- from overseas)
- the stringent criteria used to assess polymers assessed as Polymers of Low Concern (PLC) and Limiteds
- the regulatory cost of introducing new ‘green’ and sustainable chemicals has meant ongoing reliance on less environmentally-friendly chemicals.
Other issues identified by stakeholders included:
- Costs – although Government policy is for NICNAS’ activities to be funded through cost-recovery, some stakeholders also thought that NICNAS should receive some budget funding to enable it to expedite assessment of existing chemicals and to undertake important post-market monitoring.
- It was also suggested that the high introduction costs for chemicals being assessed for use in Australia could: deter introduction of more modern, cost-effective chemical substitutes; inhibit the development of small Australian companies; and inhibit the introduction of safer chemicals.
- Confidentiality – It was suggested that implementation of risk management measures by risk managers is impossible when chemical names are able to be kept confidential under the ICNA Act if so requested by the introducer.
- Governance and stakeholder consultation - On the whole, stakeholders were pleased with the nature and extent of consultation. However, various suggestions were made for improving the Director of NICNAS’ access to strategic and technical advice.
Internal review of arrangements, processes and functionsThe objective of the internal review was to identify how costs to business could be reduced by delivering efficiency and effectiveness improvements to NICNAS’ internal governance arrangements, operational functions and administrative processes, while maintaining the protection of human health and environmental outcomes.
While NICNAS has demonstrated strong organisational performance and effectiveness in some key areas (including the achievement of key performance indicators in annual reports, strong stakeholder engagement mechanisms and consultation processes, and committed staff) there are also areas for improvement.
To assist in comparing the areas for improvement that were identified through the internal review with those identified by stakeholders, the internal review issues have been grouped against the same headings as those used to group stakeholder comments above.Top of Page
The regulatory framework for industrial chemicals (including the role of NICNAS)Consistent with the comments made by stakeholders, the internal review also identified the complexity of the system as a significant shortcoming.
A range of possible reform options were identified including, for example, establishing legislative linkages between the various risk management bodies, creating a standing committee to bring together the relevant bodies, and addressing gaps in regulatory coverage through amendments to legislation to clarify roles and responsibilities.
NICNAS assessment of new and existing chemicalsThe internal review highlighted:
- process inefficiencies in the risk assessment processes for both new and existing chemicals which stem from the prescriptive nature of the ICNA Act
- that NICNAS does not have sufficient scope or flexibility to respond to chemical assessments of varying risk and complexity in a timely or efficient manner
- the need to define a clear policy position on the use of international chemical assessment outcomes by NICNAS and the potential value of requesting NICNAS to prioritise the expansion of approved foreign schemes under the ICNA Act.
NICNAS post-market monitoring and complianceBased on comparisons with other regulators NICNAS has inadequate compliance management resources and enforcement tools to effectively support its compliance strategy.
Other issues impacting on NICNAS’ efficiency and effectivenessIn relation to governance:
- the absence of a strategic advisory capability in the current governance structure
- improvements could be made to the provision of policy advice by DoHA and also the provision of corporate support services to NICNAS.