Low regulatory concern chemicals initiative

The Industrial Chemicals (Notification and Assessment) Amendment
(Low Regulatory Concern Chemicals) Bill 2004 (the Bill) was introduced into
the House of Representatives on 31 March 2004 and passed by the Senate
on 24 June 2004. The Bill came into effect on 9 August 2004.

The Bill introduced a framework for a range of measures for the operation
of NICNAS and balances the reduction in red tape and bureaucracy with
reduced time and costs for certain assessments whilst enhancing auditing,
compliance and safety information outputs. The specific measures are
detailed below and a Scorecard of progress with implementation for each
measure is detailed in Appendix 7.

The Bill introduced the following specific measures:

1. Audited self-assessment

A new process for audited self-assessment for LRCC categories, including
an audited self-assessed assessment certificate for:
• polymers of low concern;
• low regulatory concern polymers;
• non-hazardous chemicals; and
• any other chemical, or class of chemical, that is prescribed by the
   regulations for the purposes of the self-assessment system.

The Bill also introduced annual reporting and record keeping obligations
for the purposes of providing information to NICNAS and for introducers
to validate self-assessment data to NICNAS inspectors during the audit
process. New offence and penalty provisions have also been introduced
to support these measures.

2. A range of new permits

New permit categories for low hazard and/or low concern chemicals,
including:
• a low hazard permit for chemicals of low volume;
• an early introduction permit system for low hazard and low
   risk chemicals; and
• a new permit category for controlled use chemicals.

Some of these new permit categories are also accompanied by annual
reporting and record keeping obligations. New offence and penalty
provisions have also been introduced to support the new measures.
The Bill also adopts administrative processes for Commercial Evaluation
Category (CEC) and Low Volume Chemicals (LVC) permit renewals.

3. A new range of exemptions

New LRCC exemptions including:
• a transhipment exemption for chemicals off-loaded unopened at an
   Australian port or airport for a short period and kept in control of Customs
   before leaving Australia;
• an exemption for non-hazardous and low hazardous non-cosmetic
   chemicals for specified volumes;
• an exemption for low concentration non-hazardous cosmetic chemicals
   imported in specified mixtures of 1% or less;
• an increase to the current exemption for research, development and
   analysis and the general exemption for low volume chemicals.

Other reforms include:
• changing the definition of ‘cosmetics’ in the Act to align it with that used
   under the Trade Practices legislation;
• giving industry the option to nominate an assessed chemical for immediate
   inclusion in AICS;
• giving the Director, NICNAS the ability to put the particulars of a chemical,
   including any conditions to which it is subject, in AICS and making these
   conditions enforceable under the Act; and
• mandatory company registration of all chemical introducers.

The Bill provides for a range of amendments that deliver industry real reform
by creating long term, sustainable, competitive advantage for the chemicals
and plastics industry. These reforms, developed in partnership with industry,
the community and government, offer an innovative approach to introduce
flexibility into the regulation of industrial chemicals while improving health,
safety and environmental standards and public access to chemical safety
information.

These reforms reflect the Government’s commitment to ensure the most
efficient regulatory system is in place for industrial chemicals: a system
that encourages the introduction of new and safer chemicals. The proposed
changes give effect to the Government’s response to the recommendations
of the Chemicals and Plastics Action Agenda in December 2002.

This response indicated the Government’s agreement to examine options
for flexibility in the assessment processes for industrial chemicals.
The industry has taken the Chemicals and Plastics Action Agenda very
seriously and is monitoring government and industry progress
in implementing the recommendations through the Chemicals and Plastics
Leadership Group (CPLG). In December 2003, the Parliamentary Secretary
for Health, the Hon Trish Worth MP, and the Minister for Industry, the Hon
Ian Macfarlane MP, met with the CPLG at Parliament House to discuss
progress with the LRCC reform initiative.

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Introduction of an interim arrangement to allow
audited self-assessment for Synthetic Polymer
of Low Concern (PLC)

In order to progress the LRCC recommendations, NICNAS introduced
a new innovative method of self-assessment for the PLC category, which
streamlined assessment of notifications for these PLCs. This was in
recognition of the low hazard intrinsic to polymers which meet the PLC
criteria and was the first practical implementation of the LRCC reforms.

The interim self-assessment approach was only available to notifiers
who were able to produce (prior to submission of the first self-assessment)
a letter signed by the company CEO or an authorised officer undertaking to
hold the records on which the assessment is based for a period of five years
after issue of the certificate. Industry training was provided in Melbourne
and Sydney during April to assist industry take-up of the new initiative.

AICS moves online

AICS, a list of more than 38,000 industrial chemicals in use in Australia,
is a key compliance tool as it is the means by which new chemicals are
identified under the Act. NICNAS is responsible for maintaining and providing
access to the public or non-confidential section of AICS.

Since 12 January 2004, the non-confidential section of AICS has been
accessible to industry and the public through the NICNAS website. With this
move, NICNAS has introduced service charges for requests by industry
to search the non-confidential section of AICS. This charge does not apply to
Government agencies, the public and non-commercial requests. The search
of the confidential section of AICS continues to remain free of charge.
An AICS inquiry can request a search for any number of chemicals.

The number of requests to search AICS has decreased markedly since
the move of AICS online. The three-year trend data for search requests
of AICS (inquiries) and the resultant number of searches are summarised
in Table 3.

Since 12 January 2004, the number of non-confidential search requests
has dropped substantially and only one request was received since the
introduction of service charges.

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Mandatory registration

The Bill provides the legislative framework for NICNAS to implement new
registration requirements for the 2004-05 registration year. The Bill amends
Part 3A of the Act to introduce mandatory registration of all persons who
import and/or manufacture or propose to import and/or manufacture relevant
industrial chemicals during a registration year. The proposed changes came
into effect on 1 September 2004. In order to ensure that NICNAS was
able to implement the new registration requirements once the legislation
received Proclamation, work commenced on the project during the latter
part of the year.

Since 1997, companies importing and/or manufacturing industrial chemicals
over an annual threshold amount of $500,000 per year have been required
to register with NICNAS and pay a company registration charge.

Industry advised NICNAS during the LRCC consultation process that
NICNAS should extend its current arrangements maintained through the
company registration process to cover all of the industry. This would improve
industry compliance and directly engage all importers and/or manufacturers
with the national industrial chemicals’ regulator. Industry members
also believed that mandatory registration would maintain public confidence
in the regulatory scheme, and while recognising that this would come
at a cost to the industry, in particular to small business, industry
was of the view that the benefits would outweigh the costs.

The aim of NICNAS registration is to improve industry compliance and
awareness of their legal obligations when importing and/or manufacturing
industrial chemicals. The exemption from Company Registration does not
exempt introducers from the regulatory requirements of the Act. However,
this may have inadvertently happened and the threshold exemption may
have unwittingly exposed small business to compliance action. NICNAS
has found that those businesses falling under the threshold had a mistaken
belief that the legal obligations of the Act did not apply to them.

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Science Forum for best practice approaches
to health risk assessment

The Science Forum for best practice approaches to health risk assessment
(Science Forum) continued to operate for 2003-04 under the auspices of the
OCS to bring together health regulatory agencies: TGA, NICNAS, Office
of Gene Technology Regulator (OGTR) and Food Standards Australia New
Zealand. The Agricultural Pesticides and Veterinary Medicines Authority
(APVMA), NOHSC, the DEH and the NZ ERMA also attended the Forum.

Second Science Forum
- September 2003
(L to R): Dr William Farland
– Chief Scientist in the
Office of the Agency
Science Advisor; Dr
Margaret Hartley – Director
(NICNAS); Dr Ursula
Gundert-Remy – Head of
the Department for the
Assessment of Chemicals
for the Federal Institute for
Risk Assessment in Berlin;
Dr Ada Knaap – Senior
Scientific Officer for Risk
Assessment, at the
National Institute of Public
Health and Environment,
The Netherlands; Ms
Carolyn Vickers – IPCS; Ms
Cynthia Sonich-Mullin – US
EPA Centre; Dr Stephen
Olin – Deputy Director for
Toxicology and Risk
Assessment at the
International life Sciences
Institute Risk Science
Institute in Washington DC;
Dr Tim Meredith – the
coordinator of the IPCS,
World Health Organization,
Geneva, Switzerland.

The Science Forum gives effect to the Government’s undertaking in relation
to the Chemicals and Plastics Action Agenda on regulatory efficiency
and best practice. The specific objective of the Forum is to enhance the
efficiency of chemicals regulation in Australia through comparison of current
regulatory assessment practices and methods amongst participating
agencies, consideration of international trends and harmonisation of best
practice risk assessment methodology.

In 2003-04, following initiation at the Forum in May 2003, the Health
portfolio agencies declared the Mouse Local Lymph Node Assay (LLNA) as
an acceptable toxicological test for assessing the skin sensitisation potential
of chemicals. On 6 January 2004, NICNAS published in the Chemical
Gazette its policy on toxicology testing for skin sensitisation in health risk
assessment. The move to endorse the LLNA as the preferred test
represents regulatory efficiency as it delivers animal welfare benefits
and a reduction in safety testing costs to industry. The LLNA is at least equal
to alternative tests in predictability and allows the establishment
of measures of potency and dose-related nature of responses.

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International treaties

Giving effect to Australia’s obligations under the Rotterdam Convention
on the Prior Informed Consent (PIC) Procedure for Certain Hazardous
Chemicals and Pesticides in International Trade (Rotterdam Convention).

The Rotterdam Convention entered into force on 24 February 2004.
Australia ratified the Convention on 20 May 2004. As a Party to the
Convention, Australia must have legislative or administrative measures in
place to implement its obligations. These obligations include putting controls
in place for the export of the five industrial chemicals that are listed in Annex
III to the Rotterdam Convention.

To enable NICNAS to give effect to the Rotterdam Convention, the
Industrial Chemicals (Notification and Assessment) Amendment (Rotterdam
Convention) Bill 2004 was introduced into the House of Representatives
on 11 February 2004 and passed by the Senate on 4 March 2004. Section
106(1) of the Amendment Act provides for regulations to be made to prohibit
(either absolutely or subject to such conditions or restrictions as prescribed)
the introduction or export of an industrial chemical if it is the subject
of a prescribed international agreement to which Australia is a party.
Regulation 11B of the Industrial Chemicals (Notification and Assessment)
Regulations 1990 (‘the Regulations’) prescribes the Rotterdam Convention
for the purposes of section 106(1).

As a Party to the Convention, Australia must ensure chemicals listed
in Annex III are not exported to countries that do not wish to receive them.
Similarly, Australia must also ensure that the chemicals listed in Annex III
that it does not wish to receive are not imported. Regulations are therefore
required to control the importation and the export of some of these Annex III
chemicals, where controls are not already in place in Australia.

During the year, NICNAS worked with its States and Territories MOU
Group to ensure that processes were in place to facilitate the exchange
of information required under the Rotterdam Convention. The MOU Group,
through their nominated PIC contacts, agreed on behalf of Premiers and/or
Chief Ministers to supply information on industrial chemicals banned or
restricted in their States or Territories on environmental or health grounds,
and to update this information, as necessary, if restrictions change or new
ones are added.

This information is used by NICNAS to determine when a chemical
is banned or severely restricted in Australia. The total effect of regulatory
action in all States and Territories and by the Australian Government must
be taken into account by NICNAS in determining if an industrial chemical is
to be notified to the PIC Secretariat as severely restricted or banned. During
the year, NICNAS did not receive any further information on restrictions
on Schedule 1 carcinogenic substances from the States and Territories.

Giving effect to Australia’s obligations under the Stockholm Convention
on Persistent Organic Pollutants (POPs) Treaty

In the January 2004 Chemical Gazette, NICNAS advised industry that
it would undertake the screening of new industrial chemicals to identify
potential POPs chemicals. Additional data could also be required
on persistence and/or bioaccumulation.

Existing chemicals that are POPs will also be subject to review as to their
continued safe and sustainable use via NICNAS’s Existing Chemical Program.

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Development of an electronic Template for
notifiers

The new notification template for applications where the notifier seeks
the available rebate for provision of a draft assessment report is available
to notifiers on request. During the year, 35 notifications (representing 31%
of Standard and Limited notifications) using the new template were
received, and these have led to significant timesaving in the NICNAS
assessment process. The self-assessment template for PLC notifications
developed as a pilot for the LRCC changes was derived from the original
template, and 13 notifications (representing 15% of PLC applications) were
received, mostly in the last quarter. By developing electronic templates for
use by industry, NICNAS has passed savings of about $65,000 to industry
for 2003-04.

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Recognition of Foreign Schemes, including the
Australia-Canada Bilateral Arrangement

Twenty-one applications under the Arrangement have been received this
year, including eight applications for a free EIP. In addition, four notifications
based on previous assessments in the European Union were received,
resulting in potential savings of up to $79,000 to these companies.
Additionally, waiving of the fee for the eight EIPs represented
a further saving of $4,350.

The four-year trend data in foreign scheme use shows a significant increase
in use since 1999-2000 to about 12 per cent of all certificate applications in
2003-04. Since 2000-01, a total of up to $150,000 was returned to industry
as reduction in assessment fees for applications made under the foreign
scheme arrangements. In 2003-04, a doubling of such applications was
received with up to $83,350 potential savings made by the applicants of 25
new chemicals.

Under the work plan developed by the two countries, activities completed
in 2003-04 included:
• teleconferences conducted between the scientific officers of both
   countries;
• exchange of guidance material for assessing industrial chemicals; and
• exchange of information on tools for assessing industrial chemicals; for
   example, models to facilitate hazard and exposure assessments.

NICNAS acknowledges the ongoing contribution of industry in the
cooperative program between NICNAS and Canada. In May 2003, NICNAS’s
IGCC agreed to work with industry and NICNAS to identify and develop
further opportunities for bilateral arrangements.

NICNAS/US EPA New
Cooperation Program
Meeting, Washington DC
- March 2004
(L to R): Dr Roshini
Jayewardene, Mr Bob Graf,
Ms Anna Coutlakis, Mr
Graeme Barden, Dr
Margaret Hartley, Ms Linda
Gerber, Ms Becky Cool, Mr
Scott Prothero, Ms Flora
Chow, Mr Ward Penberthy

The objective of the bilaterals is to obtain meaningful financial and other
benefits for government and industry, including formal recognition by
NICNAS of the Canadian and US schemes as recognised foreign schemes
under the Act.

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Aligning notification and assessment reports for
international harmonisation through the OECD
New Chemicals Task Force

NICNAS aims to deliver a best-practice industrial chemical regulatory
scheme by participation in global harmonisation activities to improve its
efficiency, effectiveness and consistency with other national schemes.
Avoidance of duplication of assessments by regulators is a key principle
to deliver more safety information about chemicals with the same resources.
NICNAS is a key member of the OECD New Chemicals Task Force which
reports each year to the OECD Joint Meeting of the Chemicals Committee
and the Working Party on Chemicals, Pesticides and Biotechnology.

The principal aim of the Task Force is to reduce the burden on industry and
NICNAS by aligning notification requirements and standardising assessment
reports. Activities undertaken in 2003-04 included work sharing and the
exchange of information on new industrial chemicals between member
countries.

NICNAS attended the Task Force meetings in Brussels in September 2003
and Paris in May 2004. NICNAS was able to significantly shape the work
towards Mutual Acceptance of Notification (MAN) through a presentation
of a videotaped talk to the Brussels meeting on its reform program
and application to the objectives of MAN.

NICNAS contributed significantly to the OECD work on global definitions
for exemptions and exclusions for chemical regulation and through its
experience with the development and implementation of the LRCC reforms.
A number of LRCC elements are under active consideration for adoption
within a number of OECD countries including Canada and the US.

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Review of NICNAS’s Existing Chemicals Program

NICNAS commenced the review of its existing chemicals program (the
Program) in November 2003 with the first meeting of the Review Steering
Committee (RSC). The 11-member RSC, which includes representatives
from the community, worker safety, industry, government and an
independent OHS expert, will set a framework for the review and oversee
its activities.

The aim of the review is to assess the efficiency and effectiveness of the
current Program with a view to positioning it to be more cost effective as
well as more responsive and timely to stakeholder needs.

The first meeting of the RSC followed a number of preliminary focus
consultations and scoping activities held during July and August 2003
between Program staff and approximately 30 different organisations
and representatives from government, worker safety, public health,
the community and industry familiar with the Program. The aim of these
activities was to assist in identifying issues for consideration by the RSC
and resulted in a ‘Brainstorming Workshop’ with approximately 20
participants in August 2003.

Four background and four draft issues papers to facilitate the review have
been prepared since July 2003. The background papers were placed on
NICNAS’s website. An extranet to facilitate information exchange between
members of RSC was established in February 2004.

To enhance opportunities for additional community participation in the
review, NICNAS announced a deferral in the review in March 2004.
This allows the recently formed CEF the opportunity to better provide
comment to the RSC about the review, terms of reference, timelines,
membership and roles of the working groups.

More importantly, the CEF began development of a NICNAS community
engagement strategy in 2003-04, which will be used to guide NICNAS's
review processes including the review of the Program.

NICNAS believes allowing time for advice from the CEF to the RSC
will result in a better-focussed review and will enable full community
engagement at all stages of the review. The formal review will recommence
in early in 2004-05.