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NICNAS Cost Recovery Impact Statement (CRIS)

NICNAS has undertaken a review of its cost recovery arrangements and has developed a Cost Recovery Impact Statement (CRIS) which complies with the Australian Government Cost Recovery Guidelines July 2005.

 

 

The NICNAS CRIS was developed with extensive stakeholder consultation, including two phases of public consultation. Stakeholder views were taken into account in finalising the CRIS. Details and written submissions can be viewed here. A summary of issues raised by stakeholders has been included as an appendix to the final CRIS.

 

Key proposed changes to NICNAS’s cost recovery arrangements included in the CRIS are:

 

  • Better alignment of fees with the costs associated with delivering the services, which includes:
    • The introduction of some new fees for service,
    • The reclassification of some existing fees, and
    • The abolishment of those fees no longer relevant;
  • Amending the annual registration charge tier structure to provide a more equitable structure; and
  • Recovering the cost of stage one of the accelerated assessment and prioritisation of existing chemicals.

 

The CRIS proposes introducing these changes in a staged manner. In 2012-13, NICNAS will retaining the current 3-tiered registration structure, and move to a 4-tier system in 2013-14 pending changes to the Industrial Chemicals (Notification and Assessment) Act 1989 (ICNA Act). Changes to better align the fees for services provided for New Chemicals assessments and AICS listings will be introduced in 2012-13, however the introduction of some new fee categories and the abolishment of those fees no longer relevant will be delayed until 2013-14, pending changes to the ICNA Act.

 

Amendments to NICNAS fees and charges for 2012-13 as proposed in the CRIS come into effect 1 July 2012, subsequent to changes to the Industrial Chemicals (Notification and Assessment) Regulations 1990.

 

Changes to NICNAS Fees and Charges: 2012-13:

Background

It is government policy that all NICNAS activities are cost recovered. Industry cost recovery occurs through two funding streams:

  • New chemicals fees and charges –  fee for service for new chemical assessments; and
  • NICNAS registration – three tiered annual levy on all introducers of industrial chemicals (importers and manufacturers).   

Cost recovery arrangements for activities undertaken by NICNAS to regulate industrial chemicals were introduced with the Industrial Chemicals (Notification and Assessment) Act in 1989. Fees and charges were initially established to recovery 50% of NICNAS’s costs. This was reviewed in 1997 when the then responsible Minister approved changes to move NICNAS to full cost recovery of regulatory activities from industry.

With an annual budget of approximately $9 million, NICNAS cost recovery arrangements are considered “significant” under the government’s cost recovery policy. The policy requires that cost recovery arrangements must be reviewed periodically and no less frequently than every 5 years. A review of NICNAS’s cost recovery arrangements was undertaken in 2004/05 when NICNAS was part of the TGA Group of Regulators. A summary of the last report is available here.

 

In addition to the periodic review, the government has approved the development of a new cost recovery arrangement to undertake a program of work noted by COAG: the accelerated assessment of existing industrial chemicals, Recommendation 4.6 of the Productivity Commission (PC) Report into Chemicals and Plastics Regulation, 2008.

 

In 2007-08, the Productivity Commission (PC) undertook a study to investigate the current system of regulation of chemicals and plastics in Australia. The resulting report, Chemicals and Plastics Regulation, Research Report 2008 (PC report), assessed the effectiveness of chemicals and plastics regulations in addressing human health and safety and environmental issues. The PC report proposed a governance framework that enhances national uniformity and highlighted 29 specific recommendations ranging from significant governance changes to specific reforms within each of the regulatory streams. Eight of the recommendations have implications for NICNAS, with recommendation 4.6 stating that NICNAS should implement a program to greatly accelerate the assessment of existing chemicals.  

 

Recommendation 4.6 of the PC report builds on the outcomes of the 2006 Review of the NICNAS Existing Chemicals Program, where it was recommended, and subsequently agreed by government, that existing chemicals in use be prioritised for assessment. Of the approximately 39,000 chemicals currently on AICS, the majority were nominated by industry (“grandfathered” as existing chemicals) in 1990 and have not been assessed for their effects on human health and the environment, either by NICNAS or internationally. Relatively few of these existing chemicals (approximately 150 of 38,000) have been subsequently assessed by NICNAS, including as priority existing chemicals (PECs), under the current Existing Chemicals Program. The PC identified this slow assessment of existing chemicals as undermining the effectiveness of a national chemical assessment regime.

Objectives

There were a number of objectives of this review. These include but were not limited to:

  • Comply with the Government’s policy and guidelines for CR for activities undertaken by NICNAS;
    Identify all costs and ensure an appropriate mechanism to recover these costs is established;

Develop a cost recovery policy reference document; and

  • Develop a new cost recovery arrangement to implement recommendation 4.6 from the Productivity Commission Chemicals and Plastics Regulation, Research Report 2008.

A full copy of the terms of reference for this review is available here.

 

Process

The following flowchart summarises the steps involved in developing the CRIS.

 

CRIS Flowchart

 

Stakeholder consultation

NICNAS is committed to consulting with stakeholders.  NICNAS has a broad range of stakeholders who will have different ways of measuring efficient and effective delivery of the regulatory framework for industrial chemicals. These different perspectives must be managed to make sure that the outcome of the CRIS is an equitable, well-balanced position.


Stakeholder consultation was undertaken in accordance with the government’s consultation principals, with an emphasis on achieving high-quality consultations. A stakeholder engagement strategy was developed and is available here.

 

NICNAS provided a variety of opportunities for stakeholders to contribute to the review through a mix of workshops, one-on-one consultations, online survey and written submissions. These are identified in the flowchart above. NICNAS will also provide periodic updates to the Industry Government Consultative Committee and Community Engagement Forum. 

 

A draft discussion paper was released on the NICNAS website on 23 June 2010. The draft paper was open for written comment for approximately 6 weeks. During this time public consultation meetings were held in Sydney on Tuesday 1 June 2010 and Melbourne Friday 4 June 2010.  We organised a one on one consultation at the request of a stakeholder in Perth, and received over one thousand responses to our online survey.  Written submissions and aggregated online survey responses can be viewed here.

 

A draft Cost Recovery Impact Statement was released on 19 October 2011 and was open for comments for approximately 6 weeks. Public consultation meetings were held in Sydney on 11 November 2011 and Melbourne on 14 November 2011. Details and written submissions can be viewed here.

 

Inquiries

For more information please contact NICNAS on 1800 638 528 or email info@nicnas.gov.au.

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