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November 9, 2015

Australia Implementing Reforms to the National Industrial Chemicals Notification and Assessment Scheme (NICNAS)

The ACTA Group

As most recently reported in The Acta Group’s (ACTA®October 28, 2015, Global Regulatory Update, the Australian government is implementing reforms to the National Industrial Chemicals Notification and Assessment Scheme (NICNAS). According to an item in the October 6, 2015, issue of The NICNAS Bulletin, the September 2015 implementation plan outlines opportunities for community and industry consultation; timing of legislative and information technology (IT) system changes; proposed improvements to NICNAS’s registration and payments processes; and the process for developing new procedures and guidance. NICNAS will hold consultation workshops in Sydney and Melbourne during November 2015 to discuss issues raised in the first consultation paper, which was released in October 2015.


NICNAS is responsible for:

  • Assessing new industrial chemicals;
  • Maintaining the Australian Inventory of Chemical Substances (AICS);
  • Reviewing existing industrial chemicals;
  • Providing information on the human health and environmental impacts of industrial chemicals;
  • Registering importers and manufacturers of industrial chemicals; and
  • Undertaking monitoring and compliance activity.

In 2012 and 2013, there was an extensive review of NICNAS. This came about after calls from industry, and other interested parties, for reforms to NICNAS due to the regulatory costs and delays for pre-market assessments. During this review, it was determined that:

  • The current framework is not sufficiently based upon the likely risk of the chemical;
  • The legislative requirements created an inefficient regulatory process; and
  • There are a number of inconsistencies and uncertainties in the regulatory coverage.

NICNAS Reforms

Due to this outcome, the Australian government announced that reforms were, in fact, required to NICNAS, as part of the 2015-2016 budget. The aim of these reforms is to rebalance post- and pre-market requirements to reflect the risk of a new chemical, to streamline the current risk assessment process for new and existing chemicals, to better utilize international assessment materials, and to create a more appropriate compliance tool, among other things. The cost of these reforms will be recovered from industry; hopefully, however, this will be done after the regulatory costs have been reduced.

The Australian government has tasked NICNAS with the implementation of these reforms. There is expected to be great benefit with these reforms, such as:

  • Faster introduction to the market of lower risk new chemicals, which will offer a greater incentive to industry to use safer chemicals;
  • Realignment of regulatory efforts towards higher risk chemicals, again encouraging the use of lower risk chemicals;
  • Reduction of chemicals subject to pre-market assessment, hence reducing the regulatory burden to industry;
  • The ability to refuse approval of new high risk chemicals if their risks cannot be managed effectively;
  • The ability to impose conditions of use on new high risk chemicals should it be deemed necessary due to the risk of the chemical; and
  • Improved compliance powers to better manage non-compliance.

A number of changes will be required to implement these reforms. The NICNAS legislation will need to be amended, along with an update to the NICNAS IT system. In addition, guidance materials, application forms, and standard operating procedures, along with other related documents, will also need to be reviewed and changed as necessary.

Next Steps

There are still details that require addressing, but NICNAS proposes to develop these details, with stakeholder help, for consideration by the Australian government. NICNAS released the first consultation paper in late October 2015, and provides the following list of reforms:

  • NICNAS will continue to maintain the AICS;
  • For chemicals not on the AICS, there will be three classes of chemicals based on risk. Categorization of chemicals will be self-determined by industry, in accordance with criteria developed by NICNAS based on indicative risk:
    • Class 1: Very low risk chemicals — Automatic market entry and post-market compliance checks by NICNAS;
    • Class 2: Low risk chemicals — Importers and manufacturers will be expected to self-determine against criteria, provide pre-market notification to NICNAS, and complete an annual compliance declaration. NICNAS will undertake a post-market audit of approximately ten percent of the chemicals introduced under Class 2; and
    • Class 3: Medium-high risk chemicals — Class 3 chemicals will include all chemicals not meeting hazard and exposure criteria for Classes 1 and 2. For Class 3 chemicals, NICNAS will undertake pre-market assessment, publish a summary of the assessment, and conduct a targeted post-market audit/assessment. The pre-market assessment process will be streamlined and will better use international information, where appropriate.
  • The regulatory outcomes of a Class 3 chemical assessment include:
    • Issuance of an assessment certificate that is subject to a defined assessment scope. An assessment certificate may also be issued with or without recommendations to risk management agencies and with or without conditions of use relating to annual introduction volume, sites of use, or duration of the assessment certificate; and
    • Refusal of a certificate where conditions of use or existing risk management frameworks cannot manage the risk.
  • Should an assessment certificate be granted, the introducer may also apply for early listing on the AICS;
  • NICNAS may assess or re-assess any existing chemical on its own initiative. The existing Priority Existing Chemical process will be replaced by a streamlined, more concise assessment process, focused on particular concerns about a chemical;
  • NICNAS will have access to more contemporary tools to enable it to monitor compliance and take action in the event of non-compliance. For example, NICNAS will be able to: issue improvement notices and prohibition notices in response to non-compliance; require introducers to produce documents where necessary; and revoke assessment certificates as necessary (based on non-compliance or risk);
  • The reforms will be rolled out progressively between September 1, 2016, and September 1, 2018; and
  • The cost of the reforms will be recovered from the regulated industry. NICNAS estimates that the reforms will cost $12.4 million to implement.

NICNAS will hold workshops on the first consultation paper on November 19 and November 24, 2015. Comments on the consultation paper are due December 14, 2015.

Acta would be pleased to answer any further questions and to be of assistance in further understanding how this NICNAS development could affect industry.