Section 75 of the Water Efficiency Labelling and Standards Act 2005 (WELS Act) requires the WELS Regulator to, as soon as practicable after the end of each financial year, prepare a report on the operation of the WELS scheme during the year.

This annual report covers the operation of the WELS scheme from 1 July 2019 to 30 June 2020.

Background

The objectives of the WELS Act are to:

• conserve water supplies by reducing water consumption
• provide information for purchasers of water-use and water-saving products
• promote the adoption of efficient and effective water-use and water-saving technologies.

Dishwashers, clothes washing machines, taps, showers, lavatories, urinals and flow controllers are all covered by the WELS scheme. To be legally supplied, these products must meet the performance and testing requirements of the WELS standard (AS/NZS 6400:2016 Water Efficient Products – Rating and Labelling) and must be registered and labelled correctly.

The WELS Act and corresponding state and territory legislation provide for the operation of the WELS scheme. The scheme is administered by the Australian Government on behalf of all governments. Costs of administering WELS are largely covered through registration fees, with a target of 80% cost recovery from industry. A further 10% is recovered from state and territory governments, with 10% from the Commonwealth.

Scheme effectiveness

Through this mandatory scheme, information is provided to consumers on the water efficiency and general performance of water-using and water-saving products, enabling consumers to make an informed choice regarding water use. As a result, the scheme is realising national domestic water savings in the order of 140 GL a year. These savings are projected to increase to 230 GL a year by 2036 as products are replaced with more efficient models.

It is estimated that water efficiency improvements are resulting in consumer savings of $1.2 billion a year in household utility bills (water, electricity and gas). These savings are projected to increase to $2.6 billion a year by 2036.

Stakeholder engagement and education

We provided assistance to product manufacturers, suppliers and the general public, particularly giving guidance on product registrations through telephone and online enquiries. This included responding to 3,320 email requests for information.

To help manufacturers based in China to understand how to register and label WELS products that will be sold in Australia, we made fact sheets available in Chinese Simplified language that can be read by both Mandarin and Cantonese speakers.

The key WELS standard (AS/NZS 6400:2016) continued to be funded so that copies were free to download. This assisted registrants and others to more easily obtain information about the requirements that must be met under WELS.

We continued to collaborate with the co-regulators responsible for WaterMark on WELS plumbing products (Australian Building Codes Board) and with the Equipment Energy Efficiency (E3) Program responsible for energy ratings on WELS whitegoods. This supported compliance activities and consideration of improvements to standards or procedures. WELS was also represented in the Joint Accreditation Scheme–Australia New Zealand (JAS–ANZ) Technical Advisory Committee, which considers WaterMark certification body accreditation.

We launched 2 advertising campaigns during peak online shopping periods around Christmas 2019 and during the COVID-19 lockdown phase across Australia in June 2020. The June campaign was a joint advertising campaign in partnership with the Australian Building Codes Board. The campaign raised awareness of both the WaterMark and WELS schemes, and encouraged consumers of plumbing products to check if the product they were considering purchasing was compliant with the schemes. Educating consumers to check for product compliance will inform their purchasing decision. This will have the flow-on effect of encouraging compliance by product manufacturers or retailers selling through these platforms.

We promoted WELS through sponsorship of the World Plumbing Forum, hosted in Melbourne in September 2019. The global forum provided the opportunity to communicate the scheme's benefits to stakeholders and to educate industry about their compliance obligations .

We held annual meetings of the industry WELS Advisory Group and the WELS Officials Group to share information on current status of the program and technical matters.

We also published 2 issues of the newsletter InkWELS, reporting information about the latest WELS developments and highlights of our achievements.

Standards

Engagement continued in Standards Australia committees to maintain or to consider updates to the AS/NZS 6400:2016 standard and the related product-specific standards. The committees considered improvements to:

• tap ware – AS/NZS 3718
• dishwashers – AS/NZS 2007
• clothes washing machines – AS/NZS 2040
• rotary dryers – AS/NZS 2442.1
• urinals – AS/NZS 3892.

The committees also commenced considering how in-service testing measures could be included in the product-specific standards.

In early 2018 Australia secured international support for the establishment of a new International Organization for Standardization project committee (ISO PC) on water efficiency. Standards Australia is providing the secretariat for the committee. The project committee comprises 35 member countries – 17 participating and 18 observing. The committee has met internationally 3 times and on a number of other occasions through virtual conferencing. The committee agreed on the structure of the standard and commenced drafting. In 2019–20 the committee developed a complete draft of the first international standard on water efficiency labelling.

An internationally consistent standard is expected to decrease costs for Australian businesses, improve access to overseas markets for Australian manufacturers, increase compliance with the WELS scheme in Australia and provide a tool that can be used by other countries to reduce water use by implementing similar consumer labelling schemes. The standard is expected to be completed in 2021.

WELS product registrations and public database

In 2019–20, 34,481 products (22,951 products and 7,001 product variants such as colour options) were registered. These included 4,532 ceasing registrations due to expire on 21 July 2020. This compares with 30,905 products registered at 30 June 2019, including 5,522 variants and 3,045 ceasing registrations.

The increasing number of registrations of products and of variants is at least in part because of ongoing effective engagement through our compliance program to educate the industry about their obligations to register products.

More than 434 organisations registered products. These included manufacturers, importers and wholesalers. Of these registrants, 232 were Australian-based organisations. The majority of the 202 international organisations were based in Asia and Europe.

The registered products comprised:

• 798 models of clothes washing machines
• 877 dishwasher models
• 19,848 tap equipment models
• 8,960 shower equipment models
• 3,549 lavatory (toilet) models
• 246 flow controllers
• 203 urinal models.

To facilitate the process to register products for our stakeholders in Australia and overseas, the WELS online registration database is maintained 24 hours a day. It is hosted and supported on the Water Rating website. We made improvements to the database during the year that simplified the registration process for registrants and registration officers. This public database provides access for all stakeholders, including potential purchasers, to search and view the details of registered products.

Compliance and enforcement

The WELS Act requires that all products be registered and labelled at all points in the supply chain. The approach to our compliance strategy with the WELS legislation is outlined in the WELS Compliance and Enforcement Policy.

In 2019–20 WELS compliance activities continued to focus on internet-based sales and responding to non-compliances detected through monitoring and allegations. Because of COVID-19 travel restrictions, we did not undertake national building industry and other onsite inspections. We plan to resume the inspection program in 2020–21.

In 2019–20, 80 new cases of non-compliance were opened and 30 cases were carried over from 2018–19. Of these cases 75% were closed as a result of businesses becoming compliant after education and warnings from WELS staff. Only one warning notice was required. The remaining 25% of cases were active at 30 June 2020, including one civil penalties proceeding.

Our joint compliance program with eBay continued to be effective, with non-compliant sellers reported to eBay for response. A total of 93 additional sellers were educated in how to comply with WELS registration and labelling requirements, and 12 seller accounts were restricted. More than 530 WELS products were also removed from the Australian supply chain.

We extended our focus on e-commerce to include online sellers on the Amazon platform. A total of 24 sellers were reported to Amazon and were educated in how to comply with WELS registration and labelling requirements. More than 110 products were removed from the website. Amazon is working to implement approaches that will identify and remove non-compliant WELS products from its platform. We are considering expanding the e-commerce program to additional platforms, informed by evidence from the advertising campaign analysis.

All inspections and follow-up enforcement actions were undertaken in accordance with the WELS Compliance and Enforcement Policy.

Evaluation

Under section 76 of the WELS Act an independent review of the operation of the WELS scheme is required every 5 years. The 2020 review will commence in late 2020 and is expected to be complete in early 2021. This review will evaluate and report on potential improvements to the WELS scheme.

Financial

The WELS Strategic Plan 2016–19 and subsequent exchanges of letters with state and territory governments that extended the arrangement to 2021, set out agreed revenue budget based on projected industry fee revenue that increases at 4%. Industry fee revenue in 2019–20 was 4% above the projection, as shown in Table 51.