On July 1, 2020, the Australian Industrial Chemicals Introduction Scheme (AICIS) will replace the National Industrial Chemicals Notification and Assessment Scheme (NICNAS). The Industrial Chemicals Act 2019, which was passed by Parliament in February 2019 and received Royal Assent in March 2019, created AICIS, a new regulatory scheme for the importation and manufacture of industrial chemicals in Australia.

Currently, NICNAS assesses the risks of industrial chemicals and provides information to promote their safe use. NICNAS covers a broad range of chemicals used in inks, plastics, adhesives, paints, solvents, glues, soaps, and cosmetics, among many other products. While it does not regulate the use or disposal of chemicals, NICNAS promotes the safe use of industrial chemicals by providing information and recommendations to other regulators at all levels of government. It does so through a compliance strategy that focuses on education and cooperation with industry and the community. NICNAS aims to balance the safe and sustainable use of industrial chemicals with a business environment that stimulates growth, trade, and innovation.

Key July 1, 2020, Changes

Starting on July 1, 2020, through the implementation of AICIS, Australia’s regulatory efforts will be based on the likely risk of a chemical introduction. To achieve this goal, there will be six categories of introduction with different regulatory requirements that are proportionate to the likely level of risk:

• Listed introductions -- Chemicals listed on the Australian Inventory of Chemical Substances (AICS) with introduction within the terms of the listing (if any);
   
• Exempted introductions -- Very low risk;
   
• Reported introductions -- Low risk;
   
• Assessed introductions -- Medium to high risk;
   
• Commercial evaluation introductions -- For testing the market viability of the chemical before full introduction; and
   
• Exceptional circumstances introductions -- Ministerial authorization to allow urgent introduction to protect public health or the environment.
   

This new way of categorization and introducing industrial chemicals aims to allow the Australian government to focus on its pre-introduction assessment on higher risk chemical introductions. There will also be an increased focus on post-introduction evaluation and monitoring to help maintain the protection of health and safety of the public, workers, and the environment.

Lower risk chemical introductions will have streamlined introduction pathways intended to reduce the regulatory burden for industry. These changes will mean:

• More incentive to introduce greener, safer new industrial chemicals, including replacing more hazardous existing chemicals;
   
• Reduced costs to businesses and consumers using lower risk chemicals; and
   
• Exempted and reported introduction categories to reduce the time taken to bring the chemicals to market compared to the current scheme and no notification fees.
   

There will be improved protections from higher risk chemicals for the public, workers, and the environment. AICIS will allow the government the ability to impose conditions of introduction on higher risk chemicals. It will also permit the refusal to allow introduction of a higher risk chemical or stop its introduction if its risks to human health and the environment cannot be managed.

A greater use of international assessment materials, including through a streamlined introduction pathway for introductions that have been assessed by a trusted international body, are expected. There will be improved approaches to reviewing chemicals on the market through the replacement of the current overly prescriptive post-market assessment process with a more responsive and flexible evaluation process. Transparency efforts will be improved by striking a balance between confidentiality and publicly available information. Lastly, a ban will be placed on the use of animal test data generated after July 1, 2020, for supporting categorization or assessment of chemicals used solely in cosmetics.

Early Regulatory Changes Now in Effect

While the new scheme (AICIS) will begin on July 1, 2020, early regulatory changes are now in effect under the current scheme (NICNAS). Aimed at reducing the regulatory burden for introducers of some lower risk chemicals, such as polymers of low concern, the following changes are now in effect:

• No more annual reporting for the following permit holders and self-assessed assessment certificate holders:
   
  • Commercial evaluation permits;
     
  • Low volume permits;
     
  • Controlled use permits;
     
  • Self-assessment -- polymers of low concern (PLC);
     
  • Self-assessment -- non-hazardous chemicals; and
     
  • Self-assessment -- non-hazardous polymers.
     
• Shorter time frames for Approved Foreign Scheme (AFS) assessments -- reduced from 90 days to 60 days under the current AFS categories for Limited and Standard certificates.
   
• PLCs are exempt from notification.
   
• Expansion of the PLC criteria, which include:
   
  • Removal of the molecular weight specification for polyesters;
     
  • Addition of chemicals to the prescribed reactants list of polyesters;
     
  • Alignment of molecular weight boundaries with those used in the United States (U.S.);
     
  • Alignment of the moderate- and high-concern functional groups with those used in the U.S. and Canada; and
     
  • Restrictions on perfluorinated polymers so that they cannot be PLCs.
     
• Changes to the definition of a new synthetic polymer to provide greater international alignment with the U.S. and Canada.
   
• No more Safety Data Sheets (SDS) and labels required for cosmetics introduced at low volumes under the “no unreasonable risk” category.
   

Key Documents

General Rules

In 2018, the draft Industrial Chemicals Rules (General Rules) was published for consultation, before the Industrial Chemicals Act passed. The General Rules set out the proposed details for the regulation of the import and manufacture of industrial chemicals in Australia under AICIS. The final draft will be made a legislative instrument and form part of AICIS. The next draft of the General Rules is currently under development and includes details on:

• Categorization of industrial chemical introductions (what is exempted or reported);
   
• Criteria for Commercial Evaluation Authorizations;
   
• Reporting requirements;
   
• Recordkeeping requirements;
   
• Prescribed bodies for consultation;
   
• Confidential business information (CBI) notifications and applications; and
   
• International agreements.
   

The final draft of the General Rules will need to be read in conjunction with the final draft of the Industrial Chemicals Categorization Guidelines (Guidelines), which contain technical details and requirements that industrial chemical importers and manufacturers need to use to categorize their chemicals under AICIS. A draft of the Guidelines was published in 2018 for consultation, and a second draft is currently being developed. The Guidelines include details on:

• Technical definitions for certain terms used in the General Rules;
   
• Technical criteria for internationally assessed introductions;
   
• Information required to work out which hazard bands do not apply to a party’s introduction; and
   
• Additional requirements for specified classes of introduction.
   

Together, the General Rules and Guidelines will create the six-step categorization process. The first stage of introducing a new chemical (if it is not already listed on AICS) will be to “categorize” it. To determine the chemical category, the first step is to conclude whether the chemical can be ruled out as “exempted” and “reported” versus an assessed introduction. Once the first step has been completed, the next step is to determine its exemption. Step three requires manufacturers or importers to determine if it is a reported introduction of the chemical. Once those items are covered, steps four and five address the human health risk and environmental health risk of the chemical, respectively. Lastly, manufacturers and importers need to determine the indicative risk of the chemical. Within each step, certain rules apply according to the General Rules and Guidelines.

Transitional Rules

In addition to the draft General Rules and Guidelines that are currently in development, the draft Industrial Chemical Consequential Amendments and Transitional Provisions Rules (Transitional Rules) were published for consultation in 2018. Once the final Transitional Rules are issued, they will be used in conjunction with the new Industrial Chemicals (Consequential Amendments and Transitional Provisions) Act 2019 (Transitional Act) to provide the legal basis for managing the transition from NICNAS to AICIS. The second draft of the Transitional Rules is under development. The Transitional Rules cover how the following certificates, permits, and processes under the current laws will operate once the new laws are in effect:

• Assessment certificates;
   
• Commercial evaluation permits;
   
• Low-volume permits;
   
• Controlled-use permits;
   
• Early introduction permits;
   
• Secondary notifications;
   
• Application fees payable under NICNAS;
   
• AICS;
   
• Information, reporting, and confidentiality; and
   
• Movements authorized under Section 106 of NICNAS.
   

IMAP

In June 2012, NICNAS’ office announced the Inventory Multi-tiered Assessment and Prioritization (IMAP) framework, which was developed to accelerate the assessment and prioritization of chemicals listed on AICS. AICS is used to distinguish between new (unlisted) and existing (listed) chemicals and contains over 40,000 chemicals. AICS listings include chemical identity data only and do not provide information on toxicity, use, manufacturers, or importers. The objectives of the IMAP framework are to identify and rapidly assess existing chemicals of concern and to support the risk management of existing industrial chemicals in Australia by enhancing the flow of chemical safety information.

It is expected that under AICIS the Australian government will continue the work commenced under the IMAP framework to assess or reassess existing chemicals, including those that were “grandparented” onto AICS without prior assessment. AICIS will provide for its Executive Director to initiate the evaluation of any industrial chemical or matters related to an industrial chemical. An evaluation will be the way of assessing any industrial chemicals, including those listed in AICS, under current certificate, introduced under the reported or exempted categories, and excluded from other parts of the Act.

Commentary

Australia began work in 2015 to reform NICNAS, holding a number of public workshops and stakeholder consultations along the way. As described in 2015, the aim of the reforms was 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 use better international assessment materials, and to create a more appropriate compliance tool. Although the implementation date of AICIS was postponed several times due to delays in passing the necessary legislation, now that the legislation is passed, companies should prepare for the July 1, 2020, implementation date.