Nearly all ingredients in cosmetic products are regulated as industrial chemicals under the Industrial Chemicals (Notification and Assessment) Act 1989 (Cth) (the IC(NA) Act).

The manner in which industrial chemicals are to be regulated in Australia is set to change, following the Senate Community Affairs Legislation Committee’s (the Committee) recommendation to pass six Bills that were introduced earlier this year (1 June 2017), namely the:

  • Industrial Chemicals Bill 2017;
  • Industrial Chemicals Charges (General) Bill 2017;
  • Industrial Chemicals Charges (Customs) Bill 2017;

(together the six Bills).

On 8 August 2017 the Committee’s report (the Report) was released and tabled in parliament. The Report presents the Committee’s conclusion on submissions made by various groups and stakeholders following the introduction of the six Bills. A list of submissions to the inquiry and a list of witnesses who gave evidence to the Committee can be found here and here.

Together the six Bills are intended to reform Australia's system of industrial chemicals regulation and establish a new scheme, the Australian Industrial Chemicals Introduction Scheme (AICIS). The AICIS is intended to replace and simplify the existing National Industrial Chemicals Notification and Assessment Scheme (NICNAS), reducing the regulatory burden on introducers.

According to the NICNAS Consultation Papers, there will be a 70% reduction in the number of new industrial chemicals that are subject to pre-market assessment, and approximately 99% of new industrial chemicals will no longer be subject to assessment by NICNAS. This marks a significant reduction in regulatory oversight for industrial chemicals in Australia.

Stakeholders had opportunities to review the six Bills during four rounds of public consultation, which included the release of five public consultation papers and eight public workshops. The Department of Health (DoH) conducted public consultation on the fifth paper relating to the delegated legislation while the six Bills were being considered by the Committee.

The Industrial Chemicals Bill 2017 (the Main Bill)

The Main Bill proposes a number of changes including the establishment of the AICIS (to replace the NICNAS). Importantly, the Main Bill is intended to encourage self-regulation for chemicals that are considered ‘low risk’.

The Main Bill has ten parts4 and establishes six different categories in which chemicals may be introduced (either imported or manufactured in Australia). The six categories will align with risk, based on objective criteria. The six categories are: Listed introductions, Exempted introductions, Reported introductions, Assessed introductions, Commercial evaluation introductions, and Exceptional circumstances introductions.

The Explanatory Memorandum explains that 'exempted introductions' will be for 'very low risk introductions, based on hazard and exposure', such as polymers of low concern and chemicals where the introducer has the relevant toxicological testing to demonstrate that the chemical is not hazardous.

Only record keeping and an annual statement of compliance will be required. The DoH explained that the reason for adopting this approach was “…to introduce a category that would encourage industry to move to cleaner, greener chemistry…”.

Concerns raised about the proposed exempted introductions category included that the category permits chemicals to be introduced without notifying the regulator; and the Main Bill does not require the regulator to track low risk chemicals. That is, a large number (or a large volume) of chemicals could be introduced without the regulator or the public knowing about them (however, the DoH clarified that, under the existing regime, 97% of chemicals are already being introduced under an exempted category where the introducer determines that there is 'no unreasonable risk’).

Submitters raised concerns that a low risk chemical may, with additional exposure, be considered hazardous and the regulator will not know how much of that chemical has been introduced or where it has been introduced. The National Toxics Network said in its submission “When it comes to the management of industrial chemicals, history has repeatedly shown us that chemicals we were told are 'low risk' today, often turn out to be tomorrow's toxic chemical disasters, with the community, environment and economy bearing the costs”. The Greens expressed the view that leaving the public with no public record of what they are exposed to could lead to ‘serious issues’.

As the Public Health Association of Australia explained: “…the proposed regulation for the new expanded category of exempted chemicals would enable the introducer to self-assess the chemical for its risk to human health and the environment against our guidelines and to introduce the chemical with no notification to the regulator. There would be no record with the government or for the public of the chemicals introduced into Australia under the exempted category”.

In response, the DoH explained that it considers that the system of evaluations in the Main Bill is more flexible than the existing regime and would allow it to respond more effectively. Additionally, the Main Bill requires introducers to keep records for five years and failure to provide the Executive Director with the necessary information may result in penalties; and that requirements and penalties will both be strengthened by the Main Bill.

Industry representatives observed chemical regulation was only one part of the broader scheme that protects workers and the public; and that consumer law and occupational health and safety laws would still need to be complied with, thereby providing appropriate safe-guards to the public.

The Main Bill provides that certain details about the operation of the scheme will be set out in rules made by the Minister. Some submitters had concerns that it was unclear what the rules might contain. In response, the DoH described the fifth consultation paper as a plain English version of the rules and noted that additional consultation would be conducted once the draft rules had been formulated; and that significant parts of the scheme would be provided for in rules to ensure that they could be flexibly updated to reflect evolving science.

The animal test data ban implements a government election commitment to ban animal testing for new chemical ingredients from 1 July 2018 and encourages the use of alternative test methods (bringing Australia into closer alignment with the European Union).

The proposed test data ban provides that if an application is made to introduce an industrial chemical that will solely be used in cosmetics, the application cannot include animal test data obtained from tests conducted on or after 1 July 2018 in circumstances prescribed by the rules.

Concerns were raised by a number of animal welfare organisations, such as the RSPCA, that the ban on the use of animal test data for cosmetics has been drafted to be very narrow and that itcontains a loophole which would allow animal test data to be used in industrial chemicals introduced for multi end use.The DoH rejected any suggestion of a loophole.

Concluding comments

It will be interesting to see whether the six Bills, and in particular the Main Bill, are able to rebalance Australia's industrial chemicals regulation to provide a more flexible approach and reduce the regulatory burden on Australian businesses, while still maintaining public health and safety. As highlighted by stakeholders, there is a risk with industry alone self-assessing that they are ‘very low-risk’.

Additionally, we await the finalisation of the ‘rules’ in the lead up to the commencement of Bill on 1 July 2018.

1.The Industrial Chemicals (Consequential Amendments and Transitional Provisions) Bill 2017 provides for consequential amendments and implements transitional arrangements from IC(NA) Act to the new Industrial Chemicals Bill 2017.

2.The Industrial Chemicals (Notification and Assessment) Amendment Bill 2017 amends the IC(NA) Act to enable the early introduction of some aspects of the industrial chemicals reforms.

3. The Industrial Chemicals Charges (General) Bill 2017, the Industrial Chemicals Charges (Customs) Bill 2017, and the Industrial Chemicals Charges (Excise) Bill 2017 (together the Charges Bills) impose a registration charge on the introducer of a chemical to the extent that the registration charge is customs duty, excise duty or neither a customs nor excise duty respectively. The amount of the charge is to be prescribed by regulations

4. Part 1 provides for preliminary machinery provisions and definitions, including the definition of an industrial chemical for the purposes of the legislation. Part 2 requires introducers of industrial chemicals to be registered, a Register to be kept and requires chemical introducers to pay a registration charge. Part 3 establishes a new system of risk-based categorisation of industrial chemical introductions. Part 4 provides a framework for the Executive Director to initiate evaluations of industrial chemicals or matters relating to industrial chemicals. Part 5 establishes the Australian Inventory of Industrial Chemicals and provides for the inclusion, variation or removal of an industrial chemical from the Inventory. Part 6 describes the information and reporting obligations of persons under the scheme and enables people to apply for confidential business information protection. Part 7 provides for monitoring, inspection and enforcement powers under the Regulatory Powers (Standard Provisions) Act 2014. Part 8 establishes the AICIS, the role and functions of the Executive Director and renames the Industrial Chemicals Special Account. Part 9 implements Australia's obligations under certain international agreements, such as the Rotterdam Convention, and enables bans or restrictions on industrial chemicals subject to certain international agreements. Part 10 contains miscellaneous provisions including a power to enable the Minister to make rules which will contain the operational detail of the scheme, and makes provision for applications and review rights. Part 10 also provides that animal test data should not be included with an application for a chemical to be used in a cosmetic product in some circumstances.