COAG National Chemicals Environmental Management Working Group on behalf of the Senior Officials Committee to the COAG Standing Council on Environment and Water

Public submissions to the review of the National Industrial Chemicals Notification and Assessment Scheme.

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Submission to the 2011 Review of the National Industrial Chemicals Notification and Assessment Scheme

A submission from the National Chemicals Environmental Management Working Group on behalf of the Senior Officials Committee to the COAG Standing Council on Environment and Water1

The National Chemicals Environmental Management (NChEM) Working Group is writing on behalf of the Senior Officials Committee to the Standing Council on Environment and Water (SCEW). The NChEM Working Group is an inter-jurisdictional working group of policy and regulatory experts originally established to implement the NChEM and Chemicals Action Plan for the Environment, under the Ministerial Agreement on Principles for Better Environmental Management of Chemicals, signed by all environment ministers in June 2007.

December 2011

Executive Summary

The COAG Standing Council on Environment and Water (SCEW) is progressing the environmental reforms agreed by the Council of Australian Governments (COAG) arising from the Chemicals and Plastics Regulatory Reform Agenda. This includes establishing a long-needed mechanism for making and implementing national decisions on managing the environmental impacts of industrial chemicals. As for chemical regulators in other sectors, these decisions will rely upon the national hazard and risk assessments of industrial chemicals performed by the National Industrial Chemicals Notifications and Assessment Scheme (NICNAS).

As NICNAS is the only statutory agency with this assessment function, it is important that:
  • its resources not be diverted to other functions at the expense of its assessment function, particularly for regulatory functions more appropriately performed by other bodies;
  • any changes to NICNAS be coordinated with reforms underway arising from COAG’s decisions on the Chemicals and Plastics Regulatory Reform Agenda; and,
  • NICNAS have appropriate data collection, compliance and enforcement powers to better perform its core role in hazard and risk assessment – this may require amendment of the Industrial Chemicals (Notification and Assessment) Act 1989.

Introduction

In November 2008, COAG directed the Environment Protection and Heritage Council (EPHC) to develop proposals to better manage chemical impacts on the environment under the National Partnership Agreement to deliver a Seamless National Economy. The proposals include the establishment of a standard-setting body to develop risk management recommendations for chemicals to protect the environment and a framework to develop nationally consistent risk management decisions for these chemicals by the EPHC. COAG noted that the risk management decisions could be adopted automatically by reference and applied consistently in all jurisdictions.

This will close a significant gap in the current arrangements for environmental protection since, unlike other sectors such as health, transport and occupational health and safety, there is no regulatory body capable of making and implementing national decisions on the risk management of environmental impacts of industrial chemicals.

Consistent with the processes of the chemical regulators in the other sectors mentioned above, the environmental risk management decisions would follow the hazard and risk assessments conducted under the Industrial Chemicals (Notification and Assessment) Act 1989. Given this, the manner in which NICNAS conducts the hazard and risk assessments is of great importance to the environmental reforms being implemented by SCEW, as the successor to the EPHC.

This submission will describe the current regulatory framework and reform initiatives under way in the environment sector to better manage chemical risks to the environment, discuss current and future interactions between NICNAS and environmental regulators, and suggest amendments to the current NICNAS registration and assessment scheme to give NICNAS improved effectiveness in its role as a hazard and risk assessor.

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Implications from the Chemicals and Plastics Regulatory Reform Agenda

Management of Environmental Impacts of Chemicals

In 2006, COAG identified chemicals and plastics as a ‘regulatory hotspot’. A ministerial taskforce was created to develop a streamlined and harmonised national system of chemicals and plastics regulation. As part of this work, the Productivity Commission examined Australia’s system of regulating chemicals and plastics across all sectors. In 2008, it released its Research Report on Chemicals and Plastics Regulation which identified a number of reform initiatives to improve the efficiency and effectiveness of the chemical management framework in Australia.
In considering the industrial chemical framework as a whole, the Productivity Commission concluded that ‘…industrial chemical hazard and risk assessments should ideally be performed by a dedicated technical expert agency separately from the subsequent standard setting needed to manage the risks of those chemicals. The case for separation of assessment from standard setting is particularly strong for industrial chemicals because they are used in a variety of ways, and the standard setting would more appropriately be handled by experts in the field.’2

The Productivity Commission report identified environment protection as one of the four main areas of public policy concern in relation to the management of hazardous chemicals. The Productivity Commission noted that, in contrast to other sectors such as health, transport and occupational health and safety, there is currently no formal national framework for the regulation of industrial chemicals to protect the environment and little formal oversight available to environment portfolios. To rectify this gap and bring the environment sector into line with the other sectors, the Productivity Commission recommended:
  • the establishment of a "standards setting3" body to make recommendations to the environmental ministerial council regarding the management of the impact of chemicals on the environment (recommendation 9.2 of the Report);
  • introducing mandatory labelling of chemicals to provide instructions on environmentally sustainable management to chemical users if there is a demonstrated net benefit to the community (recommendation 9.1 of the report); and,
  • considering the feasibility of developing a performance measurement framework for monitoring the impact of chemicals on the environment and human health (recommendation 9.3 of the report).
In response to the Productivity Commission recommendations, COAG agreed to a comprehensive chemical regulation reform agenda. These reforms affect multiple portfolios, all levels of government and form part of COAG’s National Partnership Agreement to deliver a Seamless National Economy, due to be delivered in December 2012.

2 Productivity Commission Research Report on Chemicals and Plastics Regulation 2008 p.62
3In the Productivity Commission’s supplementary report, Chemicals and Plastics Regulation: Lessons for National Approaches to Regulation Supplement to research report (2009), it became clear that "standards setting" was not the best description of the role of such a body. The role of the body was to provide risk management advice on the management of the environmental impact of individual chemicals

COAG directed the EPHC to develop proposals to implement COAG’s responses to the three Productivity Commission recommended reforms listed above. COAG noted that these reforms will close a significant gap in the current arrangements for environmental protection and provide for a single national decision on the environmental management of chemicals which could be adopted by reference and applied consistently in all jurisdictions.

The SCEW has noted that the three reforms could be combined to create a cohesive risk management framework to protect the environment from the hazardous effects of assessed industrial chemicals. Labelling and monitoring, where needed, would be part of the environmental risk management decision.

Monitoring chemical impacts in the environment would be aligned to two key decision streams: monitoring obligations under the international chemicals and wastes agreements which Australia has ratified and monitoring for chemicals of national concern which would arise from recommendations flowing from the risk management body on individual chemicals and agreed as part of the national decision on the environmental management of the chemical. A consistent approach to performance measurement would be applied using measures of environmental condition and regulatory effectiveness.

This would build upon the existing experience of environmental agencies in monitoring chemicals in the environment, including current monitoring by the Department of Sustainability, Environment, Water, Population and Communities (DSEWPaC) which conducts nationally based monitoring for hazardous industrial chemicals and pesticides as part of meeting Australia’s obligations under the Stockholm Convention on Persistent Organic Pollutants.

In 2009, the COAG environmental reforms, including the risk management body, labelling and environmental monitoring, were included as a key project under Strategy 12 (reducing hazard and risk) of the COAG-endorsed National Waste Policy: Less Waste, More Resources.

The NChEM Working Group is currently developing a Consultation Regulation Impact Statement (RIS) for chemical regulation reforms relating to the environment, arising out of COAG decisions on the Productivity Commission Research Report recommendations, for consideration and decision by SCEW. As proposed by the EPHC and noted by COAG in 2009, it is intended that the decision-making process be highly efficient and low cost with a small, part time risk management advisory body and appropriate delegation from the ministerial council for statutory decision making. The national decisions would be adopted by all jurisdictions by reference. Unlike the current circumstances, industry and community would quickly know the necessary management actions required to protect the environment and be confident that these actions would be applied nationally in all jurisdictions.

Improving Risk Assessment and Risk Management

In its Research Report, the Productivity Commission noted the need to improve coordination between NICNAS and the regulators responsible for chemical management4. In addition to its statutory role in hazard and risk assessment, NICNAS develops non-binding risk management recommendations for each chemical as part of the chemical assessment process. These are provided to the different risk management regulators in each sector.

4 Productivity Commission Research Report on Chemicals and Plastics Regulation 2008, p.68

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As noted in the Productivity Commission Report5, NICNAS’s risk management recommendations for chemicals have not been systematically taken up in jurisdictions. There have been a number of impediments to jurisdictions adopting recommendations in a timely manner, including insufficient consultation with them during the development of the risk management recommendations and the lack of mandatory obligations on jurisdictions to implement risk management recommendations. 5 Ibid, p.68

For environmental recommendations, there has been the added complication that there has been no national environmental regulatory body able to consider the NICNAS risk management recommendations and turn them into operationally useful risk management decisions which can be readily adopted and implemented by jurisdictions. For environmental matters, developing national recommendations suitable for adoption in different jurisdictions is a complex task for industrial chemicals because the same industrial chemical can be used for different purposes resulting in different environmental impacts and the need for different control measures.

In most jurisdictions, environment agencies regulate the release of end of life industrial chemicals to the environment. General environmental management, pollution and waste control measures, such as storage requirements, are typically implemented under local government, state, territory or Commonwealth environment protection controls. To be readily adopted and applied, national environmental risk management decisions need to recognise and accommodate the differing facilities, infrastructure, legislation and circumstances in each jurisdiction while maintaining consistency in outcome and, as far as possible, consistency in approach.

As a result of these challenges, environment recommendations under the current system have been implemented differently on an ad hoc basis by jurisdictions or not at all, which results in complexity and uncertainty for stakeholders.

Prior to the Productivity Commission report and the COAG reforms, the EPHC recognised this problem and through the EPHC 2007 Chemicals Action Plan sought to improve the interface between NICNAS and jurisdictional environmental regulators by:
  • the early integration of state and territory environment agency input into chemical assessments for Priority Existing Chemicals on an informal basis, so that environmental risks can be better identified and practical, and cost-effective risk management strategies agreed where required; and,
  • the development of more detailed information about on-the-ground situations and controls in each jurisdiction to inform the development of environmental risk assessment advice by DSEWPaC and flag areas for risk management for chemicals (DSEWPaC provides expert scientific advice to NICNAS on the environmental risks of chemicals under assessment through a service level agreement).
To a degree, this initiative has been successful in producing more specific environmental risk management recommendations for Priority Existing Chemicals. As noted, however, by the Productivity Commission (recommendation 9.2) and endorsed by COAG, there would be further improvements through establishing a dedicated environmental risk management advisory body with greater engagement of the environmental agencies and reporting to the environmental ministerial council. Such an approach would be better equipped to develop effective risk management decisions which can be readily adopted in environmental legislation and made operational in each jurisdiction. This approach recognises that environmental portfolios are generally responsible for managing the release points of industrial chemicals to the environment, including factory emissions, waste disposal including the end of life disposal of articles containing chemicals and the regulation of landfills and sewage treatment plants.

In the new framework, the risk management recommendations from NICNAS will remain valuable, primarily as a general guide to the actions required. The new environmental framework will confirm and transform those recommendations into operational decisions which can be more readily adopted and implemented.
COAG has noted that the success of the new standard-setting body reporting to the environmental ministerial council will require the continued involvement of environmental agencies of all jurisdictions in the NICNAS assessments, including the preparation of the environmental assessments for NICNAS by DSEWPaC with advice from state and territory environment agencies.

New issues: Dealing with Hazardous Chemicals in Products and Articles


In addition to the environmental reforms arising from the Chemicals and Plastics Regulatory Reform Agenda, other recent environmental reform activities have relevance for the management of hazardous industrial chemicals incorporated in products and articles. This has been a significant regulatory gap in Australia’s chemical regulatory system leading to problems of exposure to hazardous chemicals during the life of the article and continued environmental pollution when the article reaches its end of life and becomes a hazardous waste.

COAG recently endorsed the National Waste Policy: Less Waste, More Resources, which was agreed by all jurisdictions in November 2009 and presents a coherent, efficient and environmentally responsible approach to waste management in Australia.

A major milestone in the National Waste Policy was achieved this year with the passage of the Product Stewardship Act 2011. This Act establishes a comprehensive national framework to enable Australia to more effectively manage the environmental, health and safety impacts of products. Key drivers for a national approach to product stewardship include the need to have regulatory tools to respond to the growing, complex and hazardous waste stream, meet international obligations and encourage responsible action. It also aims to increase consistency nationally. Top of Page

The Act defines a "product" as a thing (including a substance or mixture of substances) that is manufactured, and includes a regulation making power that can require importers, manufacturers, distributors or users of a product to take specified action in relation to a class of products. The objects of the Act include reducing the impact that substances contained in products have on the environment, and on the health and safety of human beings, throughout the lives of those products. As well, it provides for taking action in reducing or eliminating hazardous substances in products and in waste from products.

This framework will be important in controlling the use of hazardous chemicals in products and articles, consistent with the global recognition – including in both the Stockholm Convention on Persistent Organic Pollutants and under the Strategic Approach to International Chemicals Management - of the risks posed by hazardous chemicals in products and articles. This will help close a significant gap in the current ability of Australia to manage the environmental impacts of hazardous chemicals contained in articles.

Options for further strengthening the capacity to manage hazardous chemicals in articles will also be examined in the review underway of the Hazardous Waste (Regulation of Exports and Imports) Act 1989 which implements the Basel Convention on the Control of Transboundary Movements of Hazardous Waste and their Disposal. The Basel Convention includes an obligation to minimise the production of hazardous wastes as well as requirements for its management.

Benefits of the Environmental Reforms for Chemicals Management

The outcomes of these environmental reforms should include:
  • giving Australians greater confidence that chemicals are subject to appropriate and consistent environmental controls across the nation based on their scientifically assessed risk(s);
  • making it simpler and more cost effective for industry to fulfil its obligations for managing the environmental implications of chemicals by streamlining current systems, reducing fragmentation, and bringing transparency, simplicity and consistency;
  • increasing information about and understanding of chemicals and the environment so that governments, industry and the community can make informed choices about chemicals and help identify areas needing greater attention so that resources can be allocated strategically and proactively to produce improved outcomes; and
  • helping Australia meet its international obligations for the sound management of chemicals, for example under the Stockholm Convention on Persistent Organic Pollutants, including by appropriately managing hazardous chemicals of concern in products or articles and monitoring levels of chemicals in the environment.
The NICNAS Review provides an opportunity to consider how recent environmental reforms, including the COAG environmental risk management advisory body and decision making framework, might best coordinate with NICNAS responsibilities and those of the regulatory bodies in other sectors. Improved coordination could provide a seamless process for industry with greater certainty on timing and regulatory outcomes, while establishing public confidence that the system is effective in ensuring the risks in using industrial chemicals are appropriately managed.

Role and Functions of NICNAS

COAG has agreed to a comprehensive chemical regulation reform agenda under its National Partnership Agreement to deliver a Seamless National Economy. The role and functions of NICNAS should remain consistent with the COAG agreed chemicals and plastics reform initiatives.

A core governance principle of the framework put forward by the Productivity Commission is that chemical hazard and risk assessments and chemical risk management decisions should be undertaken by separate entities. This approach is consistent with the regulation of chemicals in other sectors such as transport, poisons scheduling and chemicals in the workplace. It recognises that the multiple purposes and contexts in which industrial chemicals may be used affect the risk management approaches which are appropriate in different circumstances. This variability in potential risks of industrial chemicals contributes to the need for the development of tailored risk management decisions by relevant expert bodies.

Consistent with this approach, the NChEM Working Group suggests that the Industrial Chemicals (Notification and Assessment) Act 1989 should be amended to provide NICNAS with more modern data collection, compliance and enforcement powers relevant to its role in hazard and risk assessment.
We suggest that the following areas be explored in the NICNAS review:
  • improved scope for collecting data on volumes and uses of chemicals which are identified as presenting a risk to human health or the environment to enable calculation of potential exposure, which is a key component of risk;
  • options for providing the identity of newly assessed chemicals to regulators to allow risk management decisions to be readily developed and published;
  • whether the assessment scheme should continue to allow introduction and use of a chemical on receipt of the assessment certificate and before risk management measures can be implemented;
  • the adoption of a formal adverse experience reporting program, similar to the system adopted by the Australian Pesticides and Veterinary Medicines Authority; and
  • establishing a central register of risk management decisions pertaining to a chemical.
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These are elaborated below.

Data on volumes and use

Currently, NICNAS can only request information during a chemical assessment, an assessment of whether a chemical should be declared a Priority Existing Chemical, or as a result of secondary notification requirements being met.

Having better information on volumes and uses of imported or manufactured chemicals for those chemicals assessed as presenting a risk to human health or the environment would improve NICNAS’s ability to deliver less conservative but more precise risk assessments. This would allow regulators to make better targeted risk management decisions.

In addition, such information would help determine whether the chemicals are used consistently with the proposed use patterns included in the original risk and hazard assessment (for chemicals which have been assessed). This is important, as use outside of the conditions of the original assessment could result in changes to the risk profile and exposure patterns of the chemical, leading to unassessed and unmanaged risks to human health and the environment.

Information on usage patterns and volumes of chemicals presently in use in Australia and any adverse outcomes would allow analysis of whether assumptions about use and exposure patterns used in chemical assessments are borne out over the medium to long term. This would assist NICNAS in confirming whether the assumptions of the original hazard and risk assessment are maintained. It would also assist downstream regulators in developing and maintaining appropriate risk management decisions and would enable the conclusions of the risk assessments to be tested, improving the efficiency and efficacy of risk management decisions.

Identity of newly assessed chemicals

Typically, the composition of a chemical substance that is the subject of an assessment certificate is not listed on AICS until five years after the assessment certificate is issued. Until this time, the composition of the chemical substance is confidential.

It is appropriate and important that chemical introducers have their data and intellectual property protected. The current approach to intellectual property protection may need to be refined, however, as it hampers the ability of the other chemical managers and regulators to identify which chemicals are in use, making it more difficult to manage risks related to occupational health and safety, health and the environment.

Currently, regulators seeking to provide a published national decision on chemical management may have to use only a trade name or other surrogate to identify the chemical. This creates a number of problems, including:
  • difficulty in knowing whether the substance is present in chemical formulations;
  • trade names for chemicals may be similar, making it more difficult for industry to comply with risk management decisions;
  • uncertainty about which chemical a decision applies to may make a risk management decision unenforceable; and
  • jurisdictions engaged in monitoring chemical use and emissions need to be able to identify the chemical that is the subject of the monitoring scheme. This may include providing the identity of the target chemical to entities such as sewage treatment plants and external laboratories undertaking testing. Alternatively, regulators may wait for the chemical to be listed on AICS before publishing the decision. This could lead to unmanaged risks to human health and the environment extending for five years, creating a significant regulatory gap in the current system.
A change to the current process could facilitate greater transparency in relation to chemical use and assessment in Australia, and enable appropriate risk management to be undertaken while still protecting intellectual property.

Chemical assessments and the introduction of new chemicals

Under the Industrial Chemical (Notification and Assessment) Act 1989, an applicant is permitted to introduce a new chemical on receipt of the assessment certificate, regardless of the hazards that the chemical may present to human health and the environment and whether appropriate controls are in place to manage that risk, or whether appropriate end of life facilities exist to manage the chemical when it becomes a waste product.

This issue could be addressed by including:
  • the requirement that a chemical be the subject of a risk management decision by the appropriate regulators after the issue of the assessment certificate and prior to introduction of the chemical; and
  • consideration of waste disposal options available in Australia to deal with chemicals during the assessment process.
In order to ensure that chemicals can be adequately managed over the course of the chemical lifecycle, NICNAS should consult state and territory jurisdictions in the risk assessment process of new and priority existing chemicals which pose a risk to the environment. Top of Page

Adverse experience reporting

We note that the Productivity Commission recommended the adoption of a formal adverse experience reporting program, similar to the system adopted by the Australian Pesticides and Veterinary Medicines Authority.6This information would be of assistance not only to NICNAS as the hazard and risk assessment body, but also to chemical regulators in all jurisdictions. It would help to establish that assessment information on chemicals is current and that risk management activities remain adequate to protect human health and the environment.

Central register of risk management decision pertaining to a chemical

As there are a number of chemical regulators nationally, the development and maintenance of a chemicals database which cross references other chemical regulators’ decisions and requirements would be desirable. This would mean that industry and the public would be able to access all the relevant information (or relevant links to information) on a chemical in one place. It would be appropriate for all risk management regulators of industrial chemicals to report their decisions to NICNAS so that the results could be maintained in a publicly accessible one-stop-shop database.

Governance and Consultation Arrangements

As noted by COAG, the success of the new standard-setting body reporting to the environmental ministerial council will require the continued involvement of environmental agencies of all jurisdictions in the NICNAS assessments, including the preparation of the environmental assessments for NICNAS by DSEWPaC with advice from state and territory agencies. It would be desirable for this involvement to be formalised through legislative change to the Industrial Chemicals (Notification and Assessment) Act 1989 or through a Memorandum of Understanding at ministerial level.

Minor changes to the Industrial Chemicals (Notification and Assessment) Act 1989 may be needed to coordinate with the proposed environmental statutory arrangements to establish and implement the COAG environmental reforms for risk management decisions. This would involve primarily the conditions for the exchange of information and timeframes; for example, the transfer of data used in the hazard and risk assessment process from NICNAS to the new environmental risk management body would provide notifiers with a seamless integration between the NICNAS assessment process and the development of risk management decisions and therefore should not require notifiers to have to resubmit information.

6 Productivity Commission Research Report on Chemicals and Plastics Regulation p.86

Efficiencies and Effectiveness

Given the current statutory reliance of risk management regulators on the hazard and risk assessments conducted by NICNAS, it is essential that these assessment functions not be compromised by diversion of resources to other functions.

Post-market activities such as monitoring the impacts of regulatory management decisions on human health and the environment are important activities which require more emphasis than they currently receive. It is important, however, that chemical monitoring or compliance and enforcement activities are undertaken by those agencies best placed to implement them and take account of existing activities.

Environmental monitoring and a range of compliance and enforcement activities are already undertaken by environmental agencies in all jurisdictions, including in response to international treaty obligations or under state and territory legislation. Further consultation to make the most effective and efficient use of resources and recognising existing expertise would be appropriate if changes are contemplated in existing pre-market and post-market emphasis.

Similarly, the management of chemicals in articles is recognised as a global emerging issue within international agreements such as the Strategic Approach to International Chemicals Management. As described earlier, measures to address this issue through legislation have been incorporated in the Product Stewardship Act 2011 and are being considered through the review of the Hazardous Waste (Regulation of Exports and Imports) Act 1989, both of which are administered by DSEWPaC.

As evidenced in the National Interest Analysis being prepared by DSEWPaC for the consideration of the ratification of ten Stockholm Convention listed chemicals, three of which occur in articles, the management of chemicals in articles can be complex and expensive. As standards for the concentration levels of chemicals in articles which define the threshold level for concern are set internationally under the Basel and Stockholm Conventions, the issue for Australia is largely one of management action rather than hazard or risk assessment. Further consultation amongst agencies would be appropriate to determine a coordinated approach on dealing with chemicals in articles.

Risk Management Functions

As indicated above, it is essential that NICNAS perform its role as a hazard and risk assessment body as effectively and efficiently as possible. Particularly for industrial chemicals, the development of risk management decisions which can be readily adopted and implemented is more appropriately done by bodies which have expertise and familiarity with the available legislative and management options. In this regard, the environmental reform proposals being progressed by the SCEW will provide an efficient, effective and low cost mechanism for achieving national consistency and uptake of the risk management decisions to better protect the environment.

In order for NICNAS to undertake its role as hazard and risk assessor competently, it needs adequate resources to undertake its assessment functions as well as to enable compliance and enforcement of data provision, assessment and notification requirements. Strengthening its role in these areas would be beneficial for the industrial chemicals regulatory system.

Conclusion

The NICNAS Review provides an opportunity to consider how the COAG environmental decision making framework and the NICNAS hazard and risk assessment process might best coordinate in order to provide a seamless process for industry with greater certainty on timing and regulatory outcomes, while establishing public confidence that the system is effective in ensuring risks are appropriately managed. It also provides an opportunity to identify those areas which have not been addressed by the COAG process and for which there are gaps in the regulatory system which have environmental impacts. In doing so, it should be remembered that those gaps need to be addressed effectively and efficiently. Identifying the most appropriate means for doing so requires more extensive consultation and examination than can be provided by a review focused on one agency. This wider consideration could be facilitated by the Standing Committee on Chemicals and conducted with the involvement of the appropriate ministerial councils.

The NChEM Working Group would be willing to meet with representatives of the Department of Health and Ageing, NICNAS and the consultants to further discuss the review of NICNAS and how it can integrate with the COAG chemical reforms for the environment.