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Appendix 3 - Report on the operation of the Industrial Chemicals (Notification and Assessment) Act 1989 for 2018-19

About the National Industrial Chemicals Notification and Assessment Scheme (NICNAS)

NICNAS is a statutory scheme established under the Industrial Chemicals (Notification and Assessment) Act 1989 (ICNA Act). The scheme protects the Australian people and their environment from risks associated with the introduction (import or manufacture) and use of industrial chemicals, and provides information to promote the safe use of these chemicals. Information from NICNAS assessment reports is available to the public, as well as to state, territory and other Australian Government authorities, to assist them in regulating the transport, storage, use and disposal of industrial chemicals. NICNAS contributes to the Health Portfolio Outcome 5.

From 1 July 2020, NICNAS will be replaced by the Australian Industrial Chemicals Introduction Scheme (AICIS), established under the Industrial Chemicals Act 2019 (IC Act). The main purpose of the new scheme will remain the same as the current scheme, but improves on it by:

  • making regulatory effort more proportionate to the risk posed by industrial chemicals; and
  • promoting safer innovation by encouraging the introduction of lower risk chemicals.

Figure 1. NICNAS functions

 assess industrial chemicals for human health and environmental impacts; register introducers of industrial chemicals and promote regulatory compliance; maintain the Australian Inventory of Chemical Substances; provide information and recommendations to the public, workers, Australian Government, state and territory entities; collect statistics on the chemicals introduced; and meet obligations under international agreements for industrial chemicals.

Highlights

In 2018-19:

  • NICNAS exceeded all of its performance measures (refer Outcome 5 - Regulation, Safety and Protection, pg 102–120 of the printed and PDF versions of the Annual Report).
  • Regulatory changes to the current Scheme came into force, reducing the red tape burden on industry ahead of more extensive regulatory reforms under AICIS that commence on 1 July 2020.
  • New online application forms relating to managing the Australian Inventory of Chemical Substances (the Inventory) were launched through the NICNAS Business Services Portal.
  • The Cosmetics Standard 2007 was replaced by the Therapeutic Goods (Excluded Goods) Determination 2018, to implement the Government’s decision to remove responsibility from NICNAS for the regulation of cosmetic products, while retaining its responsibility for regulating their chemical ingredients.

Registration and compliance

Registration

Introducers (importers and manufacturers) of industrial chemicals in Australia must be included on the publicly available Register of Industrial Chemical Introducers.1 Registration assists the regulated community to be aware of and voluntarily comply with its obligations under the ICNA Act.

NICNAS compliance activities continue to focus on the registration of all known introducers of relevant industrial chemicals. During 2018-19, 7,353 introducers were registered with NICNAS, representing the highest number of registrants since the commencement of the scheme.

The majority of NICNAS activities are funded through a charge on those introducing chemicals. The amount payable by each introducer is determined in a four tiered framework (known as levels A–D) by the total value of relevant industrial chemicals introduced in a registration year.

Figure 2. Five year trend data for NICNAS registrations

Figure 2 is a vertical bar graph showing five year trend data for NICNAS registrations (for Registration Levels A, B, C and D) from 2014-15 to 2018-19. Registrations have increased in each level except Registration Level B, which shows a minor drop from 1,648 registrations in 2017-18 to 1,647 registrations in 2018-19.

Source: NICNAS Annual Reports and internal data

Compliance monitoring

The NICNAS compliance strategy utilises a staged process of risk-based compliance monitoring of registered introducers. Compliance monitoring and enforcement activities are proportionate to risk, with an initial focus on education and awareness-raising to assist introducers to understand and comply with their obligations under the ICNA Act.

Key compliance statistics during 2018-19
  • 764 new businesses registered with NICNAS as a direct result of compliance monitoring activities.
  • The registration levels of over 500 introducers were adjusted as a result of NICNAS audits.
  • 154 compliance cases were opened and 159 cases were resolved.
  • At the end of 2018-19, 521 previously registered introducers were identified to be introducing industrial chemicals whilst unregistered and were subsequently managed according to the NICNAS compliance strategy.
  • 41 new industrial chemicals introduced without notification or reporting to NICNAS were identified through compliance monitoring activities and were subsequently managed according to the NICNAS compliance strategy.
Inventory management

The Inventory provides chemical identity information and specific conditions of use associated with certain industrial chemicals. The Inventory comprises both public and confidential sections.

Unless chemicals are listed on the Inventory, or are exempt from assessment under the ICNA Act, they are considered to be new chemicals and require assessment of risks to the environment and human health before they can be introduced. Chemicals listed on the Inventory are considered existing chemicals and can be introduced into Australia in accordance with the terms of the Inventory listing without notification to NICNAS.

Chemicals are listed on the public section of the Inventory five years after an assessment certificate has been issued, unless the certificate holder applies for earlier listing or seeks (and is granted) listing on the confidential section of the Inventory. Chemicals are only listed in the confidential section if it can be demonstrated that the commercial prejudice to the introducer, resulting from the publication of information about the chemical, outweighs the public interest in the disclosure of this information (a statutory test).

​Key statistics during 2018-19 for the Inventory
  • At 30 June 2019, 40,604 chemicals were listed on the public section of the Inventory and 119 chemicals on the confidential section of the Inventory.
  • The number of applications for listing on the confidential section of the Inventory has halved since last year (refer Figure 3).
  • Since February 2019, Inventory-related application forms have been processed online through the NICNAS Business Services portal. Online applications have increased efficiency and resulted in quicker responses to introducers.

Figure 3. Assessment categories for applications for listing on the confidential section of the Inventory from 2014-15 to 2018-19

Figure 3 is a vertical bar graph showing the categories of confidential listing applications and number of applications for each category across the period of 2014-15 to 2018-19. The categories are Polymer of Low Concern, Self-assessment for Polymer of Low Concern, Limited and Standard. Across this time frame, the majority of applications were for the categories of Polymer of Low concern or limited.

Source: NICNAS Annual Reports and internal data

Figure 4. Outcomes of applications for confidential listing on the Inventory received from 2014-15 to 2018-19

Figure 4 is a vertical bar graph showing the number of applications for confidential listing on the Inventory that were in progress, approved, withdrawn or rejected from 2014-15 to 2018-19. Across this timeframe, the majority of applications were approved.

Source: NICNAS Annual Reports and internal data

Assessment of new industrial chemicals

New industrial chemicals are assessed according to criteria, including the type of chemical, the amount to be introduced per year, the proposed use(s) and proposed duration of use. Permits and certificates are issued after risks to human health and the environment have been assessed. Introducers (manufacturers or importers) of chemicals exempt from notification, as defined under the ICNA Act, have annual reporting and record-keeping obligations.

The number of new chemical assessments has decreased slightly since the announcement of the new scheme in May 2015 (refer Figure 5).

Figure 5. Number of certificates and permits issued over the period 2012-13 to 2018-19

Figure 5 is a line graph showing the number of certificates and permits issued from 2012-13 to 2018-19. The number of certificates and permits have slightly decreased in 2018-19.

Source: NICNAS Annual Reports and internal data

The uses assessed under Standard (STD), Limited (LTD) and Polymer of Low Concern (PLC) certificate categories are detailed in Figure 6. Each year, surface coatings are the most commonly assessed industrial application, except in 2014-15 where there was a slightly higher number of applications for cosmetic/personal use. Based on the number of assessments, industrial use categories remain relatively constant over the seven year period, except for chemicals in printing/photographic applications.

Figure 6. Industrial uses of chemicals assessed under Standard, Limited and Polymer of Low Concern certificate categories

 surface coatings; cosmetics/personal; printing/photographic; fuel and oil; engineering; other; plastics; mining and metal extraction; and domestic/cleaning. The majority of certificates issued in 2018-19 were for surface coatings.

Source: NICNAS Annual Reports and internal data

Figure 7 details the different certificate categories for chemicals assessed during the same period (2012-13 to 2018-19). The number of PLC has decreased during 2018-19, due to the amendments of the ICNA Act (from April 2019) that removed the requirement for assessment of chemicals that meet PLC criteria.

Figure 7. Number of Polymer of Low Concern, Limited and Standard certificates issued from 2012-13 to 2018-19

Figure 7 is a line graph depicting the number of Standard (STD), Limited (LTD) and Polymer of Low Concern (PLC) certificates issued from 2012-13 to 2018-19. The number of certificates issued for PLC and LTD have decreased in 2018-19, whilst the number of certificates issued for STD have increased in 2018-19.

Source: NICNAS Annual Reports and internal data

Figure 8 provides information on the nature of identified hazards of the 674 individual new chemicals assessed under STD and LTD certificate categories from 2012-13 to 2018-19. These are classified according to the Globally Harmonized System of Classification and Labelling of Chemicals (GHS). By definition, PLCs are non-hazardous and are not included in this figure.

GHS classification is based on the information available for assessment. It should be noted that while an individual chemical substance can be determined to be a hazardous substance, the end product may not be hazardous due to the low concentration of the chemical in the final product being below the threshold for hazard classification.

Figure 8. Hazards of chemicals assessed under Limited and Standard categories (certificates issued) from 2012-13 to 2018-19

 STD – Hazardous; STD – Not Hazardous; STD – Not determined; LTD – Hazardous; LTD – Not Hazardous; LTD – Not determined. The majority of chemicals assessed during 2012-13 to 2018-19 were in the Standard – Not Hazardous category.

Source: NICNAS Annual Reports and internal data

Chemicals or polymers introduced at ≤ 1 tonne per year have fewer data requirements (that is, undergo a LTD assessment) compared to chemicals with a higher introduction volume that undergo a STD assessment. The ‘not determined’ hazard classification from LTD assessments is the largest category in Figure 8 above and arises when the information received is insufficient to meet GHS hazard classification criteria. In some other cases, such as when the chemical is used solely for industrial applications and worker exposure can be mitigated through measures such as engineering controls and personal protective equipment, a standard assessment can be adequately conducted with data that are also insufficient for GHS classification purposes.

Figure 9 demonstrates GHS hazard classifications for chemicals assessed under LTD and STD certificate categories and their distribution of industrial uses during 2018-19. An individual chemical can have multiple hazards. For those chemicals classified as hazardous, the most common hazard classification was serious eye damage/irritation.

Figure 9. The number of chemicals classified as hazardous by GHS hazard classification and their distribution of industrial uses in 2018-19

Figure 9 is a horizontal bar graph depicting the number of chemicals classified as hazardous by GHS hazard classification. The graph shows that an individual chemical can have multiple hazards and the most common hazard classification was serious eye damage/irritation.

Source: NICNAS Annual Reports and internal data

* STOT – specific target organ toxicity (single or repeated).

Chemicals for cosmetic/personal use tend to be classified as hazardous to human health more often than any other industrial use category. However, it should be noted that, where relevant, the risks to human health from new industrial chemicals used in cosmetic/personal care products can generally be effectively managed through recommendations to scheduling under the Poisons Standard.

Key statistics for new industrial chemicals during 2018-19
  • 245 certificates and permits were issued during the year.
  • 12,805 industrial chemical introductions were reported under exemption categories by 256 introducers.
  • Two comparable agency assessments (Health Canada and the United States Environmental Protection Agency) and five 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 industrial chemicals listed on the Australian Inventory of Chemical Substances (the Inventory). IMAP Stage One (2012–2016) focused on chemicals of high regulatory concern. As part of IMAP Stage Two (2016–2020), the focus has been on identifying chemicals of low regulatory concern, which are then deprioritised from requiring further assessment while continuing to assess higher priority chemicals of concern (refer Figure 10).

Our approaches include:

  • reviewing physico-chemical properties;
  • data source collation and validation;
  • exposure data-profiling;
  • read-across strategies (including strategies for targeting efficient chemical grouping); and
  • computer based modelling (in silico) studies.

During 2018-19, NICNAS developed a step-wise, semi-automated screening methodology to further screen, categorise and deprioritise unassessed azo-based substances (and their aromatic amine metabolites) for their potential risks associated with use in textiles by using the:

  • threshold of toxicological concern approach to risk assess systemic toxicity and genotoxicity; and
  • dermal sensitisation threshold and dermal sensitisation quantitative risk assessment approaches.

Our international regulatory counterparts, Health Canada and Environment and Climate Change Canada, validated these innovative methodologies through peer review.

Figure 10. Comparison of the proportion of deprioritised (Tier I) Chemicals between IMAP Stages One and Two

 Excluded Use (Non-Industrial) (16%); Low Concern Polymers (38%); Low Concern Azo Dyes (9%); Expert Validated Rules (3%); and Other (18%).

Source: NICNAS Annual Reports and internal data

* Tier I are chemicals that pose no unreasonable risk to human health and the environment that have been deprioritised for any further assessment.

** ‘Other’ includes substances derived from natural products and plant extracts used in low volumes. Chemicals with excluded uses are chemicals used exclusively for therapeutic, agricultural and veterinary or food purposes, with no known industrial use.

Since the commencement of the IMAP framework, chemical safety information and regulatory advice have been made available for more than 14,100 previously unassessed unique chemicals listed on the Inventory (refer Figure 11).

Figure 11. The number of assessments, unique chemicals assessed and risk management recommendations determined from IMAP assessments

Figure 11 is a line graph depicting the total number of unique chemicals and risk management recommendations over 7 years. The graph shows a large increase in Total IMAP Assessments and Total IMAP Chemicals with a slight increase in Total IMAP Recommendations.

Source: NICNAS Annual Reports and internal data

The IMAP framework continues to support risk management of chemicals in Australia, with a significant number of risk management recommendations resulting from an IMAP assessment (refer Figures 11, 12a and 12b). As at 30 June 2019, 4,037 risk management recommendations have resulted from IMAP assessments for 3,250 unique chemicals (refer Figure 11).

 Safe Work Australia (2,769); Poisons Standard (486); ACCC (159); Assess at Tier III (384); Environment (238); and Other (1).
Source: NICNAS Annual Reports and internal data

* ‘Other’ refers to new miscellaneous recommendation category for which there is no current risk management options/mechanism in place (based on Tier III Human Health Assessment recommendation on Acetaldehyde in Tranche 26 (March 2019): ‘Recommendation to consider establishing an indoor air guidance value.’).

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 staff then determine whether a secondary notification assessment is required. Three secondary notification assessment reports were published in 2018-19.

Priority Existing Chemical (PEC) assessments

The Health Minister may declare an industrial chemical that is listed on the Inventory to be a PEC, on the basis that reasonable evidence suggests the manufacture, handling, storage, use or disposal of the chemical gives rise, or may give rise, to a risk of adverse health or environmental effects. During 2018-19, a risk assessment of decabromodiphenyl ether (decaBDE) was published with recommendations relating to its human health and environmental effects, and its fate in the environment. DecaBDE is listed on Annex A of the Stockholm Convention on Persistent Organic Pollutants, for which secondary notification conditions now apply to manage the importation and use of the chemical in Australia.

Key statistics for existing chemicals in 2018-19
  • 2,136 human health and environment IMAP assessments were undertaken for 2,128 unique chemicals.
  • 288 recommendations to manage newly identified risks associated with the industrial use of 212 unique chemicals resulted from IMAP assessments.
  • By June 2019, NICNAS has produced 27 tranches of IMAP assessment reports since 2012, resulting in 20,554 reports (on either health or environmental risks) of 14,162 unique chemicals being published on the NICNAS website (refer Figure 11).

Figure 13. Percentage of existing chemicals assessed to date

 Assessed – IMAP (34.8%); Assessed – NC (7.9%); Assessed – PEC (0.3%).

AICIS implementation

The reforms to NICNAS announced in 2015 have resulted in a new industrial chemicals law this year, the Industrial Chemicals Act 2019 (IC Act). This law establishes a new scheme, AICIS, to replace NICNAS from 1 July 2020.

Amendments to the Industrial Chemicals (Notification and Assessment) Act 1989 (ICNA Act) commenced in April 2019 to allow for early regulatory changes. These changes are consistent with the shift to a more risk-based and proportionate regulatory scheme by reducing the regulatory burden for certain lower risk chemicals. These changes include:

  • no more annual reporting for permit holders and self-assessed assessment certificate holders;
  • removal of requirement to submit a Safety Data Sheet and label for exempt cosmetic ingredients;
  • synthetic polymer definition further aligned with international definitions;
  • expansion of the Polymer of Low Concern (PLC) criteria;
  • PLCs can now be introduced without notification or assessment; and
  • timeframes for Approved Foreign Scheme assessments reduced from 90 to 60 days.

The technical and operational details of the new scheme continued to be developed in 2018-19, including in response to amendments made during the passage of the IC Act through Parliament. The following consultations were undertaken during 2018-19 for stakeholders to provide feedback on details of the new scheme:

  • Assessment certificate information requirements – eight submissions received and analysed.
  • Guidance on the use of AICIS approved chemical names for protecting confidentiality – six submissions received and analysed.
  • Proposed Rules to be made under the IC Act – 26 submissions received and analysed.

At the end of 2018-19, a total of 253 stakeholder submissions were received and analysed since the NICNAS reforms process commenced in 2015.

Figure 14. Milestones for industrial chemicals reforms: NICNAS to AICIS

Figure 14 is a structure chart which depicts milestones for industrial chemicals reforms from May 2015 to AICIS starting in July 2020. The graph shows milestones for government, stakeholder and other during the period May 2015 to July 2020. In July 2020, AICIS starts with new funding arrangements in place and transitional arrangements commence.

Digital transformation

During 2018-19, online Inventory processes were built and available to users through the NICNAS Business Services Portal, increasing efficiencies in applying and processing requests. The NICNAS website continued to be improved through enhanced links, additional guidance material and a user-centred, accessible approach that applied the GOV.AU Content Guide.

NICNAS is developing Australian regulatory specific customisation of the International Uniform Chemical Information Database (IUCLID) software to store and exchange data on chemicals in an internationally harmonised manner. Australia is collaborating with the European Chemicals Agency (ECHA), which manages the software, in association with the Organisation for Economic Co-operation and Development (OECD). New Australian certificate submission types for AICIS have been created by the Office of Chemical Safety (OCS) staff in collaboration with ECHA. It is anticipated that the next major IUCLID version will contain these submission types.

Stakeholder engagement

The NICNAS Strategic Consultative Committee (SCC), with representatives drawn from peak industry and civil society groups, continued as the primary stakeholder advisory body to NICNAS. The outcomes from SCC meetings are published on the NICNAS website.2

During 2018-19, NICNAS continued to actively engage with Government entities, chemical industry bodies and community groups through a range of mechanisms. Twelve issues of a new interactive stakeholder newsletter were issued, with information on new online forms, consultation opportunities, user testing and research.

International engagement

As part of our ongoing efforts to harmonise international standards and risk assessment methods (where applicable in the Australian context) and to establish international best practice approaches, we regularly engage with our international counterparts. Our international collaboration enhances regulatory efficiency through sharing experiences, saving regulatory effort by avoiding unnecessary duplication of assessment activities, optimising our resources and reducing costs. These activities also facilitate access to international scientific expertise, assessment tools, standards and risk assessment materials and promote an internationally consistent approach to chemical regulation through the harmonisation of data requirements for assessments (where appropriate). They also encourage acceptance of assessments from overseas jurisdictions where comparable assessment standards can be demonstrated, support collaboration on emerging issues of international concern and strengthen relationships with strategic international regulatory partners.

In 2018-19, NICNAS continued its active engagement at a multilateral level, predominantly through the Chemicals Committee of the OECD and its key subsidiary committees and the Asia-Pacific Economic Cooperation Chemical Dialogue. Bilateral engagement continued with our counterparts in Europe, Canada, the United States and New Zealand. NICNAS staff were invited speakers at meetings arranged by ECHA and the National Institute of Food and Drug Safety Evaluation of the Republic of Korea.

Staff development

NICNAS continued to develop staff capability through:

  • providing access to the Department’s various learning and development courses and activities;
  • hosting regular forums on a diverse range of scientific and non-scientific topics with visiting experts; and
  • self-directed computer based learning using the OCS Learning Centre. Courses include the Regulatory Toxicology unit and the newly released Chemistry for Toxicology unit.

Financial performance

Compared with 2017-18, total revenue increased by $0.2 million and expenses decreased by
$0.9 million. Revenue recovered from the regulated industry was $17.2 million. Net revenue from other sources was $0.3 million, which was consistent with the previous financial year.

Total expenses were $15.4 million, which was $0.9 million lower than the previous financial year. This result is due to operational costs associated with the re-phasing of activities due to the delay in passage of the IC Act and the deferral of the commencement of AICIS to July 2020.

The NICNAS final net result for 2018-19 was a surplus of $2.1 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.

Table 1. Five year comparison of NICNAS revenue and expenses

2014-15

$’000

2015-16

$’000

2016-17

$’000

2017-18

$’000

2018-19

$’000

Industry cost recovered revenue

13,045

16,324

17,383

17,026

17,245

Other revenue

1,023

493

321

332

331

Total revenue

14,068

16,817

17,704

17,358

17,576

Total expenses

13,764

14,602

15,502

16,406

15,488

Operating surplus/(deficit)

304

2,215

2,202

952

2,088

Acknowledgements

The Director of NICNAS is an independent statutory office holder, who is grateful for the assistance of staff from the OCS within the Department of Health in both the day-to-day administration of the scheme and in the scientific assessment of the human health risks of industrial chemicals. The Director of NICNAS is also grateful for the assistance of scientific staff from the Department of the Environment and Energy, who assess the environmental risks of industrial chemicals. Staff from both of these departments are also involved in preparing for the implementation of AICIS, which replaces NICNAS from 1 July 2020, including through managing an extensive stakeholder consultation process.

In addition, the Director of NICNAS receives constructive advice on the operation of the scheme from the NICNAS SCC, which includes representation from both civil society and industry organisations.

Contact details

Dr Brian Richards
Director of NICNAS

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