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Australia Consults on Principles for Design of Fees and Charges for AICIS

  •   27 Sep 2019
  •    Nora Wang
  •  181
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    Takehome:

    • Australia issued a notice to consult on principles for the design of fees and charges imposed on manufacturers and importers of industrial chemicals.
    • Eight chemicals are added to the Annex III of the Rotterdam Convention which is practiced in Australia.

    On September 16, 2019, the Australian government released the draft Principles for Cost Recovery of the Australian Industrial Chemicals Introduction Scheme (AICIS) [1] to solicit public comments. The consultation is set to end on October 14, 2019.

    The new chemical regulatory scheme, namely the AICIS, will take effect on July 1, 2020. As with the current National Industrial Chemicals Notification and Assessment Scheme (NICNAS), the costs of running AICIS will be covered by fees and charges collected from manufacturers and importers of industrial chemicals. Thus, the draft Principles is unveiled to seek the views of relevant entities and individuals on how to establish such fees and charges in a scientific and reasonable way.

    The schedule of developing and implementing the cost recovery scheme is presented in the table below. This consultation, which marks the first phase, specifies key activities which are carried out to implement the Industrial Chemicals Act 2019 [2], and summarizes how such activities will be costed and cost recovered in the future practices.

    (Source: NICNAS)

    The consultation paper explains that, as the new framework will be more risk proportionate by focusing on the likely risk of any industrial chemical, this will fundamentally change how introducers of chemicals interact with Australian chemical regulators as well as capabilities required of such regulators. For example, the ban on animal testing for unlisted introductions of cosmetic chemicals will make risk assessment processes more complicated and thus incur different fees.

    An activity based cost (ABC) model will be employed to allocate all costs incurred to activities in chemical regulation under the AICIS. The cost base is majorly comprised of three parts, namely direct costs, indirect costs and capital costs. See the graph below for details.

    (Source: NICNAS)

    The consultation paper proposes charge points for four types of activities, including registration; certificates, authorizations and inventory listings; protection of Confidential Business Information (CBI); and import and export of certain industrial chemicals subject to international agreements. Moreover, for fees for service, there are two types of charging structures, namely tiered fees (charges which may vary based on efforts associated with different classes of activities) and flat fees (charges incurred to activities which demand similar efforts).

    Feedbacks collected in the consultation will be used to inform the cost recovery arrangements for AICIS. With such arrangements in place, a final cost allocation methodology will be established and a Cost Recovery Implementation Statement (CRIS) will be drafted and finalized to instruct introducers to pay fees and charges in line with a given schedule.

    In addition to initiatives to flesh out AICIS-related arrangements, the Australian government is also making institutional efforts in other ways to enhance the country’s chemical regulation. For instance, eight chemicals [3] have been recently added into Annex III of the Rotterdam Convention [4] which is implemented domestically for some chemicals intended for industrial use. Pesticides and industrial chemicals listed in Annex III are subject to the Prior Informed Consent (PIC) procedure [5].

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