NICNAS Cost Recovery Impact Statement (CRIS)

NICNAS is conducting a review of its cost recovery arrangements in accordance with the Australian Government Cost Recovery Guidelines July 2005. In addition, NICNAS will develop a new cost recovery arrangement to undertake the accelerated assessment of existing industrial chemicals.

Latest news: 18 January 2012

Public consultation on the draft NICNAS CRIS has been completed and stakeholder comments can be viewed here.

 

The CRIS is expected to be in place on 01 July 2012.

 

Timetable

The final CRIS is expected to be released in 2012. The following flowchart summarises the steps involved.

Background

It is government policy that all NICNAS activities are cost recovered. Industry cost recovery occurs through two funding streams:

• New chemicals fees and charges –  fee for service for new chemical assessments; and
• NICNAS registration – three tiered annual levy on all introducers of industrial chemicals (importers and manufacturers).   

Cost recovery arrangements for activities undertaken by NICNAS to regulate industrial chemicals were introduced with the Industrial Chemicals (Notification and Assessment) Act in 1989. Fees and charges were initially established to recovery 50% of NICNAS’s costs. This was reviewed in 1997 when the then responsible Minister approved changes to move NICNAS to full cost recovery of regulatory activities from industry.

With an annual budget of approximately $9 million, NICNAS cost recovery arrangements are considered “significant” under the government’s cost recovery policy. The policy requires that cost recovery arrangements must be reviewed periodically and no less frequently than every 5 years. A review of NICNAS’s cost recovery arrangements was undertaken in 2004/05 when NICNAS was part of the TGA Group of Regulators. A summary of the last report is available here.

 

In addition to the periodic review, the government has approved the development of a new cost recovery arrangement to undertake a program of work noted by COAG: the accelerated assessment of existing industrial chemicals, Recommendation 4.6 of the Productivity Commission (PC) Report into Chemicals and Plastics Regulation, 2008.

 

In 2007-08, the Productivity Commission (PC) undertook a study to investigate the current system of regulation of chemicals and plastics in Australia. The resulting report, Chemicals and Plastics Regulation, Research Report 2008 (PC report), assessed the effectiveness of chemicals and plastics regulations in addressing human health and safety and environmental issues. The PC report proposed a governance framework that enhances national uniformity and highlighted 29 specific recommendations ranging from significant governance changes to specific reforms within each of the regulatory streams. Eight of the recommendations have implications for NICNAS, with recommendation 4.6 stating that NICNAS should implement a program to greatly accelerate the assessment of existing chemicals.  

 

Recommendation 4.6 of the PC report builds on the outcomes of the 2006 Review of the NICNAS Existing Chemicals Program, where it was recommended, and subsequently agreed by government, that existing chemicals in use be prioritised for assessment. Of the approximately 39,000 chemicals currently on AICS, the majority were nominated by industry (“grandfathered” as existing chemicals) in 1990 and have not been assessed for their effects on human health and the environment, either by NICNAS or internationally. Relatively few of these existing chemicals (approximately 150 of 38,000) have been subsequently assessed by NICNAS, including as priority existing chemicals (PECs), under the current Existing Chemicals Program. The PC identified this slow assessment of existing chemicals as undermining the effectiveness of a national chemical assessment regime.

Objectives

There are a number of objectives of this review. These include but not limited to:
Complying with the Government’s policy and guidelines for CR for activities undertaken by NICNAS;
Identify all costs and ensure an appropriate mechanism to recover these costs is established;

Develop a cost recovery policy reference document; and

• Develop a new cost recovery arrangement to implement recommendation 4.6 from the Productivity Commission Chemicals and Plastics Regulation, Research Report 2008.

A full copy of the terms of reference for this review is available here.

 

Stakeholder consultation

NICNAS is committed to consulting with stakeholders.  NICNAS has a broad range of stakeholders who will have different ways of measuring efficient and effective delivery of the regulatory framework for industrial chemicals. These different perspectives must be managed to make sure that the outcome of the CRIS is an equitable, well-balanced position.

Stakeholder consultation was undertaken in accordance with the government’s consultation principals, with an emphasis on achieving high-quality consultations. A stakeholder engagement strategy was developed and is available here.

 

NICNAS provided a variety of opportunities for stakeholders to contribute to the review through a mix of workshops, one-on-one consultations, online survey and written submissions. These are identified in the flowchart above. NICNAS will also provide periodic updates to the Industry Government Consultative Committee and Community Engagement Forum. 

 

A draft discussion paper was released on the NICNAS website on 23 June 2010. The draft paper was open for written comment for approximately 6 weeks. During this time public consultation meetings were held in Sydney on Tuesday 1 June 2010 and Melbourne Friday 4 June 2010.  We organised a one on one consultation at the request of a stakeholder in Perth, and received over one thousand responses to our online survey.  Written submissions and aggregated online survey responses can be viewed here.

 

A draft Cost Recovery Impact Statement was released on 19 October 2011 and was open for comments for approximately 6 weeks. Public consultation meetings were held in Sydney on 11 November 2011 and Melbourne on 14 November 2011. Details and written submissions can be viewed here.

 

Inquiries

For more information please contact Kate Liddell on 02) 8577 8894 or email CRIS@nicnas.gov.au.