The food and beverage industry is facing significant regulatory changes in the coming weeks with the Biosecurity Act 2015 (Biosecurity Act) replacing the Quarantine Act 1908 effective 16 June 2016 and the Country of Origin Labelling reform taking effect from 1 July 2016 [click here to read our previous alert on the reforms "Confusing origins of the CoOL Reforms ].
The Biosecurity Act introduces the following significant changes for the food and beverage importing industry:
- From 16 June 2016 existing Quarantine Approved Premises (QAPs) will become transitional Approved Arrangements until 30 June 2016.
- Existing QAPs should now have the pre-populated Application Forms for an approved arrangement for their premises which must be completed by 1 June 2016 and submitted to the Department of Agriculture and Water Resources (Department).
- Applicants are required meet the 'fit and proper person' test under the Biosecurity Act;
- The Biosecurity Act introduces the concept of 'conditionally non-prohibited goods' which applies to plant, animal or other biological materials. Some of these goods will require a permit to be imported (default position) while importers of some goods specified in the Biosecurity (Prohibited and Conditionally Non-prohibited Goods) Determination 2016 can meet certain conditions as an alternative to obtaining a permit.
- Strict compliance and enforcement provisions will apply under the new regime, including the introduction of an infringement notice scheme for persons at 'first point of entry'.
- Other enforcement measures made available to the Department under the Biosecurity Act include civil penalties, enforceable undertakings and criminal sanctions. Approved arrangements can also be suspended or revoked for non-compliance.
What is an approved arrangement?
Approved arrangements are arrangements entered into by persons (natural or corporate) in order to be permitted to carry out activities to manage the biosecurity risks associated with specified goods. An application may be made to the Director of Biosecurity for approval of a proposed arrangement to carry out biosecurity activities. The Director must be satisfied that the applicant has met any requirements set out in the regulations, is a 'fit and proper person' and that the level of biosecurity risk associated with the arrangement is acceptable.
Fit and proper person test
An applicant for an approved arrangement must submit material which evidences that it is 'a fit and proper person to carry out biosecurity activities'. An applicant can include an individual, company or corporation, partnership, trust or other entity. The Department will also assess the conduct and history of the applicant's associates. The application must disclose all associates relevant to the proposed arrangement in its application and undertake appropriate checks. Associates could include:
- If the applicant is a body corporate: directors, officers or shareholders who control, direct, enforce or monitor people performing activities associated with the approved arrangement.
- If the applicant is a partnership: the partners who control, direct, enforce or monitor people performing activities associated with the approved arrangement.
- Anyone directly or indirectly responsible for controlling, directing, enforcing or monitoring people performing activities associated with the approved arrangement.
- Anyone responsible for performing release of material from biosecurity control, treatment or processing of goods.
- Anyone responsible for meeting prescribed requirements of the approved arrangement such as customs brokers lodging entries under an approved arrangement or persons conducting fumigations.
The application requires a declaration that the applicant has made reasonable inquiries in respect of matters such as relevant criminal history of the applicant and its associates, debts owed to the Commonwealth and prior enforcement action under the Biosecurity Act or other specified legislation.
What should food and beverage business do now?
- Operators of QAPs should now be underway with completing the pre-populated applications forms and ensuring that the pre-populated information is accurate.
- Prior to submitting the form applicants will need to ensure that the required due diligence has been undertaken to make the 'fit and proper person' declarations in respect of the applicant and its associates.
- Consider seeking legal advice if it is unclear who might be a relevant associate of the applicant, or consult with the Department to avoid an application being delayed or a transitional arrangement not being converted to permanent post 30 June 2016, as intended under the transitional arrangements.
- Consult the Regulations and draft legislative instruments to ascertain whether goods require a permit or if you can meet any alternative conditions applicable to your goods.
- Now is also the time to review contract terms and conditions to ensure that complying with the new laws will not result in a breach of contractual obligations with customers or service providers. We also recommend that food and beverage importers review their insurance coverage and consider additional insurance to cover enforcement actions and penalties.