On 17 February 2016, the Federal government released the second consultation paper on the proposed reforms to the National Industrial Chemicals Notification and Assessment Scheme (NICNAS). Submissions close on 30 March 2016.

Background to the NICNAS reforms

Last year, as part of the 2015–16 budget, the Federal government announced there will be reforms to the NICNAS that streamline the assessment process for industrial chemicals to reduce the regulatory burden on the sector, while maintaining Australia’s robust safety standards. The reforms will involve:

  • rebalancing pre- and post-market regulatory requirements to match the indicative risk profile of a new chemical,  
  • streamlining the existing risk assessment process for new and existing chemicals,  
  • greater utilisation of international assessment materials, and  
  • more appropriate compliance tools.

As a result of the reforms, the number of industrial chemicals that are subject to pre-market assessment by NICNAS is expected to decrease by more than 70%, with pre-market assessments dropping from approximately 3.3% of all new chemicals to 0.75%.

The environmental and public health benefits of realigning regulatory effort towards chemicals with a higher risk profile is that the faster introduction of lower risk chemicals will provide an incentive for the sector to introduce safer new industrial chemicals, including to replace more hazardous existing chemicals.

The government aims to implement reforms by 1 September 2018 and new legislation will be introduced following community consultation.

The first consultation paper was published in October 2015 and submissions closed in January 2016. The first consultation paper included a summary of the proposed reforms, including the new system for the categorisation of chemicals.

The second consultation paper was released on 17 February 2016 and submissions will close on 30 March 2016. The second consultation paper has been released in response to the issues raised by stakeholders in relation to the first consultation paper. It provides further explanation and clarification of some of the concepts discussed in the first consultation paper.

A third consultation paper will be published in April 2016.

Proposed reforms

For chemicals not already on the Australian Inventory of Chemical Substances (AICS), there will be three classes of chemicals based on risk. Categorisation of chemicals into the classes will be self-determined by industry, based on the application of a risk matrix that plots hazard and exposure indicators.

1.  Exempted - very low risk chemicals

For Exempted chemicals there will be automatic market entry and post-market compliance checks by NICNAS.

2. Reported - low risk chemicals

For Reported chemicals, introducers must provide pre-market notification to NICNAS and complete an annual compliance declaration. NICNAS will undertake a post-market audit of approximately 10% of the introduced chemicals in this class.

The only way for an Exempted or Reported chemical to be placed on the AICS will be following a NICNAS assessment and the issuance of an assessment certificate.

3. Assessed - medium risk chemicals

Assessed chemicals will include all chemicals that do not meet hazard and exposure criteria for Exempted and Reported chemicals. For Assessed chemicals, pre-market assessment will be undertaken by NICNAS, a summary of the assessment will be published on the NICNAS website and targeted post-market audit/assessment by NICNAS will occur.

A number of other reforms are set out in the first consultation paper, including in relation to:

  • improving the risk matrix's accuracy in assessing risk by combing use and volume in the risk matrix to rank new chemicals into exposure bands and then taking into account their hazard profiles,  
  • in relation to volume, categorising chemicals based on the volume of chemical released to the environment during use (rather than volume introduced into Australia),  
  • the use of international information by introducers to help determine whether chemicals meet the criteria for Exempted or Reported chemicals,  
  • streamlining of the pre-market assessment process for Assessed chemicals,  
  • changes to the possible regulatory outcomes of an assessment of an Assessed chemical, and  
  • changes to NICNAC's compliance and enforcement tools, including requiring the production of documents, being able to issue improvement and prohibition notices and revoke assessment certificates.

Second consultation paper

Additional reforms that are proposed in the second consultation paper arising from the first round of public consultation include:

  • the provision of a categorisation advisory service by NICNAS to assist the sector in categorising chemicals into the three risk classes,  
  • under the risk matrix for characterising chemicals, chemicals that fall into exposure band 1 (i.e. very low exposure) would automatically be characterised as Exempted and not need to undergo hazard characterisation as part of the pre-market risk assessment conducted by importers,  
  • the proposed assessment timeframe for Assessed chemicals will be reduced from 120 days to 90 days,  
  • requirements for information used to determine any risks of introducing the chemical will be more flexible, including greater acceptance of data from analogues and non-animal testing methods, and  
  • introduction of an automated, online declaration system to simplify the annual compliance declaration for Reported chemicals.

Submissions on the second consultation paper close on 30 March 2016.

The second consultation paper can be accessed here.