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Appendix 3: Report from the Director of the National Industrial Chemicals Notification and Assessment Scheme (NICNAS) on the operation of the Industrial Chemicals (Notification and Assessment) Act 1989

About NICNAS

NICNAS is a statutory scheme administered by the Department of Health, established under the Industrial Chemicals (Notification and Assessment) Act 1989 (ICNA Act). The scheme protects the Australian people and the environment by assessing risks arising from the introduction (import or manufacture) of industrial chemicals and providing information to promote the safe use of these chemicals. Information from NICNAS assessments is available to the public, as well as state, territory and other Australian Government authorities to assist them in regulating the transport, storage, use and disposal of industrial chemicals.

Highlights

NICNAS contributes to the Health Portfolio Outcome 5. In 2017-18:

  • NICNAS met all performance criteria for Outcome 5;
  • 7,249 introducers were registered, the highest number of registrants in the history of the scheme;
  • 99 per cent of new chemical assessments were conducted within statutory timeframes – which reduced burden on businesses;
  • 6,222 chemical assessments were conducted under the Inventory Multi-tiered Assessment and Prioritisation (IMAP) framework, the post-market review of risks from industrial chemicals already in use;
  • 12 international assessments from comparable international agencies were incorporated into new chemical assessments; 311 permits and certificates were issued following pre-market assessments;
  • 188 additional chemicals were listed on the Australian Inventory of Chemical Substances (the Inventory); and
  • 222 recommendations were considered and accepted by risk management agencies.
Registration, outreach and reporting

Introducers (manufacturers and/or importers) of industrial chemicals in Australia must be registered on the public Register of Industrial Chemical Introducers.92

Registration of introducers helps NICNAS inform, guide and educate introducers about their legal obligations, provide information to promote the safer introduction of industrial chemicals and maintain public confidence in Australia’s chemical industry. The revenue from registrations enables NICNAS to assess the risks of chemicals on the Australian Inventory of Chemical Substances as well as maintain the Register of Industrial Chemical Introducers and undertake compliance, communication, education and scheme support activities.

In 2017-18, 7,249 businesses were registered with NICNAS, representing the highest number of registrants in the history of the scheme. Businesses register at different levels depending on the value of relevant industrial chemicals (RIC) introduced in the registration year. Level A registrants (introducing up to $100,000 RIC) paid only a fee of $138 while those introducing greater values (Levels B, C and D) paid an additional charge of up to $22,322.

92 Available at: www.nicnas.gov.au/register-your-business/register-of-industrial-chemical...

Compliance monitoring

NICNAS’s compliance monitoring and enforcement actions are proportionate to risk and regularly reassessed, using a staged process for risk-based compliance monitoring of registered introducers. Activities focus on education and awareness-raising to assist introducers in understanding their obligations under the ICNA Act.

Key compliance statistics during 2017-18

Over 340 representatives of registered introducers attended information sessions around Australia. As a direct result of compliance monitoring activities:

  • Over 381 new introducers were registered with NICNAS.
  • The registration level of over 550 introducers was adjusted.
  • Five introducers (from an audit group of 53) were found to be non-compliant with record keeping obligations.
  • 18 new industrial chemicals were notified for assessment or reported to NICNAS.
The Australian Inventory of Chemical Substances

The Australian Inventory of Chemical Substances (the Inventory) provides chemical identity information and specifies regulatory obligations associated with industrial chemicals. The Inventory consists of non-confidential (public) and confidential sections.

Chemicals listed on the Inventory (existing chemicals) can be introduced into Australia without notification to NICNAS, provided introducers meet regulatory obligations associated with the chemical listing. Chemicals not listed on the Inventory (new chemicals) or those proposed to be introduced outside any conditions listed on the Inventory, require assessment for risks to the environment and human health before they can be introduced, unless they are exempt under the ICNA Act.

Chemicals are listed on the Inventory five years after an assessment certificate has been issued, unless the certificate holder applies for early listing. Listing on the public Inventory is the default process, unless the introducer seeks and is granted listing on the confidential section of the Inventory.

Confidential listing protects the commercial interests of the introducer and requires a statutory test to be applied. This test weighs the public interest in the availability of information about the chemical against the commercial loss to the introducer resulting from disclosure of this information. Successful applications for confidential listing are reviewed after five years, by reapplication of the statutory test.

In March 2017, NICNAS requested information on the chemical identity (Chemical Abstracts Index name, Chemical Abstracts Service Registry number, molecular formula) of all ingredients in products listed in the Trade Name Annex (TNA) of the Inventory. The TNA was created as part of the Inventory formation in 1992 and contained a list of 2,526 product trade names that were temporarily allowed to be listed on the Inventory. Provisions under the ICNA Act allowed for the removal of all products from the TNA and the addition of their constituents to the Inventory without assessment. This occurred in March 2018, after a one year consultation period.

Key statistics for the Inventory during 2017-18

There are 40,459 chemicals on the public Inventory and 112 chemicals on the confidential Inventory. In total, 188 chemicals were added to the Inventory:

  • 99 chemicals – five years after issuance of the assessment certificate;
  • 77 chemicals – early listing; and
  • 12 chemicals – following review of the TNA.

The number of applications for listing on the confidential Inventory increased since last year and was close to the long term average (refer Figure 3). Of the 18 applications received for confidential listing, ten applications were for Polymers of Low Concern (PLCs) with five for self-assessed PLCs and five for PLCs that had been assessed by NICNAS.

There were 316 requests received from bona fide introducers to search the confidential Inventory.

There were 139 inquiries received over the 12 month period following a call for information on products in the TNA. Information on 88 products (containing 275 chemicals) was submitted and 12 chemicals were added to the public Inventory based on the information provided.

Figure 3 demonstrates the trend over five years for the assessment categories of chemicals for which confidential listing applications were received.

New imported and/or manufactured industrial chemicals

The outcomes of assessments of new industrial chemicals are broadly categorised as permits and assessment certificates. Permits and certificates are issued after risks to human health and the environment are assessed. Chemicals assessed under a certificate become eligible for listing on the Inventory.

Figure 4 demonstrates the total number of certificates and permits issued since 2002. The number of new chemical assessments has remained relatively stable since the announcement of the reforms in May 2015. The uses for industrial chemicals assessed under certificate categories are detailed in Figure 5. Figure 6 shows the number of certificates issued for each assessment category from 2013‑14 to 2017-18.

New chemicals that qualify for exemption from assessment must comply with annual reporting and record-keeping requirements.

Assessments conducted overseas by comparable regulatory agencies are used in NICNAS assessments, where appropriate, to reduce regulatory burden and the duplication of effort.

Key statistics for new industrial chemicals during 2017-18

  • 311 certificates and permits were issued during the year.
  • 10,525 industrial chemical introductions were reported under exemption categories by 243 introducers.
  • Three comparable agency assessments (Health Canada, Environment and Climate Change Canada and the United States Environmental Protection Agency) and nine foreign scheme assessments were received and used in new chemical assessments.

Assessment of existing industrial chemicals

Inventory Multi-Tiered Assessment and Prioritisation (IMAP) framework

The IMAP framework is a science and risk-based framework for the rapid identification and assessment of existing chemicals. Chemicals are assessed using a tiered approach:

  • Tier I – chemicals that pose no unreasonable risk to human health and the environment;
  • Tier II – chemicals that require human health or environmental risk management measures for safe use; and
  • Tier III – chemicals that require more in-depth assessment to fully determine their impact on human health and/or the environment.

The first stage of the IMAP framework (2012–16) was followed by Stage Two which commenced
1 July 2016. IMAP assessments are completed in tranches, covering all three tiers. During Stage Two, NICNAS focused on identifying chemicals of low regulatory concern which can be deprioritised from requiring further assessment (Tier I assessment outcomes) while continuing assessment of higher priority chemicals of concern (assessed at Tier II and Tier III). Refer Table 1.

The application of new technologies in combination with approaches developed during Stage One enabled NICNAS to gain efficiencies in the screening and categorising of chemicals of low regulatory concern. These approaches include:

  • use of existing hazard data;
  • exposure data-profiling;
  • related data source collation and verification;
  • reviewing physico-chemical properties;
  • read-across strategies; and
  • computer-based modelling (in silico) studies

The IMAP framework continued to support risk management of chemicals in Australia with a significant number of NICNAS risk management recommendations being implemented or considered by national risk management bodies (refer Figure 9). As at 30 June 2018, 3,758 risk management recommendations have been made for 3,056 unique chemicals through IMAP.

93 The total number of assessments has been corrected based on public comment and/or reassessment during 2017-18.

Key existing chemical assessment statistics during 2017-18

  • 6,222 human health and environment assessments were undertaken for 4,833 unique chemicals.
  • In Stage Two (2016–18), a total of 11,968 Tier I assessments (83 per cent of Total Tier I Assessments) were deprioritised from any further assessment and considered to be chemicals of low regulatory concern (refer Figure 7).
  • 783 recommendations were made to manage newly identified risks associated with the industrial use of 759 unique chemicals.

The Inventory comprises:

  • chemicals subject to pre-market assessment (under certificate categories) and subsequently added to the Inventory;
  • those assessed as existing chemicals through the Priority Existing Chemicals process or the IMAP framework; and
  • unassessed chemicals.

At the end of 2017-18, the number of unassessed chemicals on the Inventory had decreased significantly. The increasing number of assessed chemicals on the inventory is shown in Figure 10, clearly demonstrating the significant increase in assessed chemicals over the last six years.

Secondary notification assessments

A chemical may require re-assessment when new information becomes available or changed
circumstances arise, such as a significant change to the way a chemical is used. This category of
assessment is called secondary notification assessment.

Introducers of a chemical must provide information on changed circumstances, NICNAS then determines whether or not a secondary notification assessment is required.

Key secondary notification assessment statistics during 2017-18

  • Three secondary notification assessment reports were published, one for a new chemical and two for existing chemicals.
  • Three secondary notifications were declared.
NICNAS reforms

The reforms to the scheme announced in 2015 are now expected to commence from 1 July 2019, pending the passage of new legislation.

The technical and operational details of the new scheme continued to be developed in 2017-18, culminating in the release of draft delegated legislation (Ministerial Rules) and associated guidelines for stakeholder feedback.

Key NICNAS reform statistics during 2017-18

  • A total of 24 targeted stakeholder briefings were conducted on the draft delegated legislation and associated guidelines.
  • 29 written submissions on the draft delegated legislation were received and analysed.

Stakeholder consultation

NICNAS continued to work with a range of stakeholders, including other Government entities, chemical industry bodies and community groups. The NICNAS Stakeholder Update was upgraded to an interactive e-newsletter.

The NICNAS Strategic Consultative Committee (SCC), with representatives from peak industry and community groups, met on three occasions to provide strategic advice to the Director on efficiently achieving the objects of the ICNA Act and development of the NICNAS reforms.
As the external validation body under the Regulator Performance Framework, the SCC validated NICNAS’s self-assessment report. A summary of outcomes of SCC meetings is published on the NICNAS website94.

The SCC also discussed:

  • NICNAS regulatory and financial performance;
  • the progress of the NICNAS reforms and transitional arrangements;
  • the draft report on cosmetic tattooing ingredients used in Australia;
  • the role of NICNAS in regulating chemicals used in e-cigarettes in Australia;
  • the outcomes of NICNAS’s contribution to the report National Assessment of Chemicals Associated with Coal Seam Gas Extraction in Australia; and
  • issues to be considered when assessing chemicals in skin whitening products.

94 Available at: www.nicnas.gov.au/about-us/advisory-groups/strategic-consultative-committee.

Digital services

During 2017-18, the new IT system continued to provide an efficient mechanism for industry registration and management of business details by building annual declaration submissions via the NICNAS Business Services platform, improved tracking of registrations and collection of fees.

NICNAS is developing Australian regulatory specific customisation of the International Uniform
Chemical Information Database (IUCLID) software to store and exchange data on chemicals that is
internationally harmonised. Australia is collaborating with the European Chemicals Agency (ECHA), who manages the software, in association with the Organisation for Economic Co-operation and Development (OECD). These customisations are planned for release in 2018-19.

Research was conducted to understand users’ experience of the current NICNAS website and online NICNAS Business Services. The user research included an online survey and one-on-one interviews with users to understand how NICNAS’s current services are used, what tasks people undertake and challenges they face. The findings will be used to improve NICNAS online services during 2018-19.

International engagement

NICNAS continued to collaborate with international counterparts on matters of international interest via regular teleconferences and participation in international working groups and conferences.

The OECD Chemicals Committee and its key subsidiary committees are the principal mechanisms through which NICNAS staff engage multilaterally. Formal bilateral cooperative arrangements/memoranda of understanding are in place with counterparts in Europe, USA, Canada and New Zealand. NICNAS maintains regular dialogue with each of these agencies on emerging topics of interest such as a ban on animal testing for cosmetic ingredients and new risk assessment methodologies. NICNAS continued to actively contribute to the work of the APEC Chemical Dialogue.

This international collaboration facilitates access to scientific expertise, assessment tools and methodologies, benefiting NICNAS and promoting international harmonisation of regulatory requirements. International engagement over the last year has been particularly valuable in developing the implementation detail of the NICNAS reforms.

Staff development

During 2017-18, the Office of Chemical Safety (OCS) Learning Centre (cloud-based online toxicology course designed for in-service training of staff in the OCS) initiated the development of a new ‘Chemistry for Toxicology’ unit, planned for release in 2018-19. Course content is currently being developed by internal staff. NICNAS has recently invited other national regulatory agencies to access the Learning Centre, which provides an opportunity for increasing scientific capacity across regulatory agencies.

Financial performance

Compared with 2016-17, total revenue decreased by $0.4 million and expenses increased by $0.9 million. Revenue recovered from the regulated industry was $17.0 million, which was $0.4 million less than the previous year due to a reduction in funding for reform-related activities. Net revenue from other sources was $0.3 million, which was marginally higher than the previous year.

Total expenses were $16.4 million, which was $0.9 million higher than the previous year. This result is due to operational costs associated with new IT systems and the re-phasing of activities due to the delay in passage of the package of Industrial Chemicals Bills through Parliament.

The NICNAS final net result for 2017-18 was a surplus of $0.9 million which will be maintained in the NICNAS Special Account. Funds in the Special Account will provide for business continuity requirements and future capital projects.

Acknowledgements

I would like to acknowledge the hard work and dedication of the staff in the Office of Chemical Safety of the Department of Health, who assist me in managing the scheme and who undertake the human health aspects of NICNAS risk assessments. I would also like to thank the staff of the Department of the Environment and Energy, who undertake the environmental components of NICNAS risk assessments, and the staff in the Office of Health Protection in the Department of Health with whom we work closely on policy-related matters. Staff from all of these areas work closely together in developing the reforms to the scheme.

Dr Brian Richards
Director of NICNAS

Contact details
Address: GPO Box 58, Sydney NSW 2001 Australia
Level 7, 260 Elizabeth St, Surry Hills, NSW 2010
Phone: (02) 8577 8800
Free call: 1800 638 528
NICNAS website: www.nicnas.gov.au
Email address: info [at] nicnas.gov.au