Wide-reaching legislative changes are underway in relation to the regulation of industrial chemicals in Australia. A new regulatory scheme, the Australian Industrial Chemicals Introduction Scheme (AICIS), is being implemented. AICIS will replace and simplify the current National Industrial Chemicals Notification and Assessment Scheme (NICNAS). AICIS will commence on 1 July 2020. On the same date, a ban will commence on the use of new animal test data for ingredients which are only used in cosmetics.

In May 2015, the Australian Government announced its intention to implement reforms to the way in which industrial chemicals are regulated. The reforms are intended to streamline the process of assessing industrial chemicals to reduce the regulatory burden and to make regulatory effort more proportionate to risk.

The new legislative regime is contained primarily in the Industrial Chemicals Act 2019 (the Primary Act), the draft Industrial Chemicals (General) Rules (the General Rules) and the draft Industrial Chemicals Categorisation Guidelines (the Categorisation Guidelines). Bills relating to fees and charges are expected to be passed in April 2019.

The Primary Act contains provisions which establish the new regulatory scheme, AICIS. The critical difference between AICIS and its predecessor, NICNAS, is that AICIS places greater emphasis on self-regulation for chemicals which are classified as “low-risk”. Key changes include:

  • When a new chemical is being introduced into Australia (whether for use in the course of manufacturing or as an ingredient, for example, in a cosmetic), the manufacturer or importer of the chemical or the end product (eg the cosmetic) will need to notify AICIS.
  • The Australian Inventory of Chemical Substances, which contains details of existing chemicals, will be replaced by the Australian Inventory of Industrial Chemicals (AIIC).

Under AICIS, all industrial chemicals will fall within one of six categories. These categories are determined by the level of risk posed to the environment and human health. Chemicals falling within the risk categories at the lower end (exempted and reported introductions) can be introduced without assessment.

The only requirements for ‘exempted introductions’, which pose the lowest risk, will be record keeping and an annual statement of compliance. No notification fee will be required to be paid to AICIS. As there is no assessment, chemicals in this category will be able to be introduced more quickly to market. NICNAS considers that this reform will be an incentive for safer, new chemicals to be introduced, in place of more hazardous chemicals currently in use. NICNAS is anticipating that the number of industrial chemicals requiring a pre-introduction assessment will decrease by more than 70%.

NICNAS has also set out, on its website, some Case Studies to show how the process for the categorisation of new chemicals will work.

The draft General Rules and the draft Categorisation Guidelines provide further detail about how the scheme will operate:

  • The General Rules contain details about how the importation and manufacture of industrial chemicals in Australia will be regulated. This includes:
    • the categorisation of industrial chemical notifications (eg what is exempted or reported);
    • the reporting and record keeping requirements;
    • Confidential Business Information notifications and applications; and
    • criteria for Commercial Evaluation Authorisations.
  • The Categorisation Guidelines set out the technical details and requirements to which importers and manufacturers must have regard when categorising their chemicals. Where a chemical is imported or manufactured under a permit, exemption or assessment certificate as part of the current regulatory system, the chemical will need to be categorised using the processes and criteria contained in the General Rules and Categorisation Guidelines.

When the draft General Rules and Categorisation Guidelines are finalised, guidance material will also be made available.

There are also draft Industrial Chemicals (Consequential Amendments and Transitional Provisions) Rules 2018 (the Transitional Rules) which set out the basis upon which the transition from NICNAS to AICIS will be managed. The Transitional Rules will address how various certificates and permits granted by NICNAS and processes under the current law will operate once the new laws take effect.

Another key change introduced by the Primary Act is a ban on the use of animal test data for the introduction of new industrial chemical ingredients to be used solely in cosmetics. Instead, the development and use of alternative test methods will be encouraged via government funding. Like AICIS, this ban will commence on 1 July 2020.

Each of the above changes in respect of the categorisation of new industrial chemicals is important and must be adhered to by business owners in the cosmetic and personal care industry. AICIS imposes classification requirements for industrial chemicals which differ significantly from those that exist under NICNAS, so care must be taken to ensure full compliance. Businesses should be reviewing their processes now to ensure compliance by 1 July 2020.