National risk-based framework proposed for managing industrial chemicals

The Industrial Chemicals Environmental Management (Register) Bill 2020 has been introduced into the Commonwealth Parliament to create a national register of industrial chemicals and make recommendations as to their risk management.

Snapshot

• Risk management regulations for industrial chemicals are currently fragmented across Australian jurisdictions.
• The Bill proposes to allow the Commonwealth Environment Minister to create a register classifying industrial chemicals according to environmental risk and establishes applicable management requirements.
• States and territories will regulate industrial chemicals by reference to the national register to create a national regulatory scheme.

Background

The Productivity Commission’s Research Report on Chemicals and Plastics Regulation dated July 2008 found that the former National Industrial Chemicals Notification and Assessment Scheme (NICNAS) did not provide adequate environmental protection, and was inefficient due to its inconsistent application between Australian States and Territories.

Following this report, the Australian Industrial Chemicals Introduction Scheme (AICIS) was established under the Industrial Chemicals Act 2019 to regulate the importation and manufacture of industrial chemicals in Australia.

On 1 July 2020, the AICIS replaced the former NICNAS to seek to improve environmental protection, adopt a risk-based regulatory approach and promote safer innovation through the introduction of lower risk chemicals.

The Bill has been introduced into Parliament for the purpose of continuing to advance a national approach to industrial chemical management.

A national risk-based approach

The Commonwealth Minister for the Environment, Susan Ley, stated that the Bill proposes to establish a national framework for the consistent management of risks to the environment from industrial chemicals.

The Bill sets out a number of objects, including giving effect to an intergovernmental scheme to establish nationally consistent standards and for the proposed register to contribute to Australia meeting its international obligations in relation to industrial chemicals.

Under the national register, industrial chemicals are classified into one of seven categories (known as schedules) depending on their potential hazards. The schedule a chemical is placed into determines the ‘National Standard’ recommendations for risk management of that chemical. The scheduling of the chemicals will be decided by the Minister, aided by a statutory ‘Advisory Committee’ and made available on a public register.

In the Second Reading Speech, the Minister confirmed that industrial chemicals which “pose greater risks to people and our environment will have stronger, tighter controls and management requirements”.

The States and Territories will retain their power to make laws regulating industrial chemical use. However, they have agreed in principle to adopt the ‘National Standard’ and are expected to make laws to allow for the enforcement of the recommendations under the national register.

The Bill also proposes to introduce cost-recovery measures in accordance with the Australian Government Charging Framework and Cost Recovery Guidelines. This will allow for the Australian Government to recover the costs of making, varying and revoking scheduling decisions under the national framework at a rate that reflects the likely costs to the Commonwealth.

Key takeaways

The national register is designed to simplify the regulatory scheme for industry, manufacturers, retailers and end users and therefore reduce costs.

Given the variations of risk-management approaches across jurisdictions, it is inevitable there will be differences between the regulations that are in force now and the regulations that will be contained in the national register. However, the transition process has not yet been addressed by the Commonwealth Government.

It will be important to monitor any changes to management measures for industrial chemicals as the national register is adopted nationally and enforced in each state and territory.

By Peter Briggs, Partner, Tom Dougherty, Senior Associate, and Rainer Gaunt, Vacation Clerk.