David Gillespie (Lyne, National Party, Assistant Minister for Health) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

Today I am delighted to introduce the Industrial Chemicals Bill 2017, which is the most important of six bills in a package of legislation to reform the system of industrial chemicals regulation and establish a new scheme for Australia, known as the Australian Industrial Chemicals Introduction Scheme (or AICIS). These reforms also deliver on the coalition's commitment to reduce red tape and improve the safety risk framework for industrial chemicals in Australia.

Industrial chemicals play an essential role in everyday life—they are in paints and petrol, and are used in the production of a wide range of consumer goods and products such as cosmetics, dyes, cleaners and plastics. They are also an integral part of Australian industry and are extensively used in mining, manufacturing, and the building and construction industry. But they can also present risks to human health, worker safety and the environment that require management through fit-for-purpose regulation.

The details for the regulations will be set out under the bills, and contain the technical and operational details to ensure the new scheme remains responsive to scientific development and changes in industry. This regulation will be subject to further public consultation.

Industrial chemicals also form part of a multi-billion dollar international market, with Australian imports and exports of industrial chemicals combined exceeding approximately $62 billion in 2015-16. It is important that Australian regulation aligns, as far as possible, with that of our trading partners, and that it is flexible enough to accommodate changes as they occur internationally and as the science develops.

The bill that I am introducing today introduces a new scheme designed to make regulatory effort more proportionate to risk and to promote safer innovation by encouraging the introduction of lower risk chemicals. The changes will continue to maintain Australia's high standards for protecting the Australian community (both workers and the general public) and the environment from any harmful effects of industrial chemicals.

The regulation of industrial chemicals at the Commonwealth level has existed since 1989 under the Industrial Chemicals (Notification and Assessment) Act 1989. However with the passage of time, through successive governments, it has been recognised that reform was required to streamline what has become a very complicated regulatory scheme.

The bill will establish the Australian Industrial Chemicals Introduction Scheme, which will replace the current National Industrial Chemicals Notification and Assessment Scheme. Under the new scheme, the executive director, who will be an independent statutory office-holder appointed by the Governor-General, will have a range of important functions in relation to the introduction of industrial chemicals in Australia. The term 'introduction' refers to importation or manufacture. The executive director's functions will include the assessment and publication of information about certain industrial chemicals introductions. AICIS publications will then be used by other bodies, including Australian government and state and territory-based regulators, to aid in the protection of human health, worker safety and the environment. Poisons scheduling, occupational health and safety and environmental protection regulation, performed under state and territory law and coordinated nationally, will be informed by AICIS publications.

The package also delivers on an important coalition government election commitment and an issue that is important to many Australians—banning cosmetic testing on animals. The government has received strong public support to introduce a ban on cosmetic testing on animals. The ban provided for in this bill will bring Australia into line with the EU and other countries introducing a ban on cosmetic testing on animals, prospectively following the commencement of the legislation on 1 July 2018.

Indeed, the new scheme in Australia is moving away from the use of animal test data for other purposes, so that animal test data, like in the EU, would be used as a last resort where science has not yet developed valid alternatives that can assure continued protections for human health, worker safety and the environment.

This ban will apply on the use of animal testing for more than 99 per cent of the cosmetics ingredients introduced into Australia. The remaining less than one per cent are circumstances where these chemicals are also used in other industries and this information is critical to ensure the protection of consumers, the public and workers, and the environment. The coalition believes that the legislation will establish Australia as a world leader in this space.

The coalition government first announced the industrial chemical reforms as part of the 2015-16 budget and since September 2015 there has been extensive consultation with stakeholders to develop the implementation detail for the reforms. We have undertaken four rounds of public consultation, released four consultation papers, held eight public workshops—with over 350 stakeholders in attendance—reviewed 148 written submissions, and sought advice from international regulators. Our consultation will not stop here, though, and an important process of consultation will continue with stakeholders to inform the development of delegated legislation. This will be critical to implementing the new scheme.

I think it is fair to say that our stakeholders do not all share the same views about the level of regulation that should be applied to industrial chemicals—with some favouring a more restrictive approach and others favouring a more deregulatory approach. But, after carefully considering the views of all, I believe that the bill before us strikes a very effective balance. The bill achieves this balance in five main ways.

First, by removing unnecessary regulatory burden and improving IT systems, the costs to industry will be reduced by around $23 million annually. We have found more efficient ways to achieve similar outcomes without in any way jeopardising health and environmental protections.

Second, introduction of a more risk-based approach to regulation encourages innovation and ensures that lower-risk chemicals are not subject to unnecessary restrictions. By enabling industry to self-assess lower-risk chemicals, this reduces the number of chemicals assessed by the regulator by more than 70 per cent—thereby reducing costs to industry, and also enabling the regulator to focus its efforts on higher-risk chemicals.

Third, the bill better aligns industrial chemicals regulation with that of Australia's trading partners. The government has worked closely with regulators in the US and Canada to ensure that wherever possible, definitions are aligned, key concepts are consistent, and most importantly that low-cost, streamlined regulatory pathways will be available for chemicals that have already been assessed by comparable international regulators. This supports the Australian industry to become more competitive internationally.

Fourth, a national inventory of industrial chemicals will be enhanced. Chemicals will be added to the inventory following assessment by AICIS under the new scheme and will be linked to the assessment statement, providing important information about the steps required to safely use these higher-risk chemicals. Critically, this will improve transparency of the scheme and chemicals on the market by publishing information that is more meaningful for industry and the public, including particularly important risk and safety information about the chemicals that have been assessed.

Finally, the bill includes new powers for the regulator to ensure the protection of consumers, workers and the environment. The regulator will be able to refuse the import or manufacture of industrial chemicals where the risks cannot be adequately managed (either by the regulator, or by other Australian risk managers such as environmental authorities). The regulator will also have strengthened enforcement powers in the event of non-compliance.

An important benefit of realigning regulatory effort towards chemicals with a higher risk profile is that the costs to businesses using lower-risk chemicals will be reduced. The faster regulatory pathway to introduction of lower-risk chemicals provides an incentive to introduce safer new chemicals, including replacing more hazardous existing chemicals. A greater focus on post-market assessment and monitoring will assist in maintaining the protection of health and safety of consumers, workers and the environment.

As mentioned earlier, in an area of science that is very dynamic and involves a high level of technical detail, it is critical that the regulatory system can adapt quickly in line with industry innovation, scientific advances and discoveries about the hazards of chemicals. For this reason, much of the detail about the types of chemicals subject to different levels of regulation will be set out in delegated legislation and guidance material. The Department of Health has already undertaken a great deal of consultation on the detail to be included in the delegated legislation, and a fifth consultation paper seeks the further input of stakeholders. I encourage all stakeholders to contribute to this consultation process.

This bill delivers on the coalition government's promise to build a strong new economy by incentivising innovation, supporting Australian exporters and protecting human health and our environment.

This bill also ensures that the regulatory system provides an effective platform for the coming decades—one that is efficient, risk based and proportionate; that encourages innovation and that ensures ongoing protections for consumers, workers and the environment.

Debate adjourned.