Understand the upcoming changes to Australia’s Industrial Chemicals Regulator

Written by Rachel Durmush (intern) and Anika Valenti (Senior Solicitor)

Introduction In Australia, the Industrial Chemicals Act 2019 (Cth) governs the supply of chemicals and chemical products to protect the environment and human health. Cosmetics are considered to be chemicals, so this law and related regulations are relevant to any Indigenous business creating lotions, balms, oils, soaps or similar products. This law is responsible for putting in place a national scheme that regulates the manufacture and importation of industrial chemicals. Previously, this scheme was known as the National Industrial Chemicals Notification and Assessment Scheme (NICNAS). From 1 July 2020, NICNAS will be replaced by the Australian Industrial Chemical Introduction Scheme (AICIS). Aspects of the previous scheme will remain the same, but there are some important changes to be aware of that this article looks at.  About the new scheme – AICIS Under the Industrial Chemicals Act 2019, an industrial chemical means a chemical element or compound or complex of a chemical element that has an industrial use. According to the Act, a chemical is classed as an ‘industrial chemical’ if it is not used for ‘agricultural, veterinary or therapeutic purposes or in food or feed.’ Other schemes regulate chemicals in those areas, for example, traditional medicines are regulated as complementary medicines under the Therapeutic Goods Act 1989 (Cth) through the Therapeutic Goods Administration. As mentioned above, cosmetics are classed an industrial chemical, being substances or preparations intended for placement in contact with any external part of the human body, including: - Face, nail, hair care and hairdressing products;

- Oral and dental hygiene products;

- Perfumes; and

- Personal hygiene and skin care. Businesses who import or manufacture industrial chemicals or products that release industrial chemicals for commercial purposes in Australia may need to register their business with AICIS and pay a fee. To determine whether registration with AICIS is required, a business will need to categorise each chemical it uses in its products into 1 of the following 5 categories: 1. Listed

A chemical that is categorised as ‘listed’ means that it is on the Australian Inventory of Chemical Substances (the Inventory) and already available for industrial use in Australia. Businesses must meet any terms of inventory listing for that chemical.

2. Exempted A chemical that is categorised as ‘exempted’ means AICIS considers it to be low risk to human health and the environment. Businesses can incorporate exempted chemicals into their products without telling AICIS beforehand. For some types of chemicals, you must submit a once-off exempted introduction declaration.

3. Reported A chemical that is categorised as ‘reported’ means AICIS consider it to be low risk to human health and the environment. Businesses must submit a once-off report before they start introducing it into their products.

4. Assessed

A chemical that is categorised as ‘assessed’ means AICIS consider it to be medium to high risk to human health and the environment. AICIS must assess a business’ introduction of the chemical in their products and issue an assessment certificate before a business can import or manufacture products incorporating the chemical. The chemical will be listed on the Inventory after 5 years (or earlier if a business applies for an early listing).

5. Commercial evaluation

Under this category, a business can apply for a time-limited Commercial Evaluation Authorisation for the purpose of testing a chemical's commercial viability in Australia.

Depending on which category a chemical falls into and the risk it poses to others and the environment (low or high risk), there may be further requirements for businesses that use the chemicals in their products.

Businesses using industrial chemicals in cosmetics, cleaning products, mining, fuel and oil and printing and photography should read the Industrial Chemicals Categorisation Guidelines to confirm which of the five categories they fall into and whether the chemicals they use pose a high or low risk. 

Transition for existing registrations If your business is already registered with NICNAS, you will automatically be registered with AICIS from 1 July 2020, however the registration will expire on 31 August 2020 and require renewal. Annual declarations will replace annual reporting, however due to the transition to the AICIS, there is no annual declaration required in 2020. Registered business’ first annual declarations will not be required until November 2020 from the period 1 July 2020 to 31 August 2021. AICIS is currently conducting consultations on the proposed scheme and fees. Follow this link for more information: https://www.nicnas.gov.au/have-your-say/current-consultations Naturally occurring chemicals and native plant extracts A business does not need to notify AICIS if the chemical is uses in its products is a naturally occurring chemical. This is because these chemicals are treated like they are on the Inventory, whether they are listed or not.

A naturally occurring chemical is: An unprocessed chemical occurring in a natural environment e.g. chemicals derived from plants, micro-organisms, the earth, sea or animals without any processing; A chemical occurring in a natural environment that is extracted using a process that does not cause a chemical change in the substance e.g. a plant extract that is extracted using water. This is relevant for many Indigenous businesses wild harvesting and working with bush plants to develop cosmetic products like soaps and balms.

Are there exemptions to registration? Businesses need to search the Australian Inventory of Chemical Substances to see if the chemical they wish to use or are using in their products is listed. If it isn’t listed, it is considered a ‘new chemical’ in Australia and the AICIS will need to assess it. Alternatively, the chemical may be exempt and no annual reporting to AICIS is required. However, a business relying on an exemption must keep records to prove that their use of chemicals falls within one of the following exemption categories: Exemption Type  Quantity restriction Concentration restriction Research and development or analysis — manufactured in a fixed apparatus in a specific location None None  Research and development or analysis — importation only Not more than 100kg in a 12-month period None Cosmetic use (no unreasonable risk) Not more than 100kg in a 12-month period None  Non-cosmetic use (no unreasonable risk) Not more than 100kg in a 12-month period None  Cosmetic use (no unreasonable risk and non-hazardous chemical) None  Not more than 1% concentration in a cosmetic Businesses should look on the AICIS Website to see whether the chemicals they use or plan on using as part of their products are exempt.

Other important changes  Under the new scheme, animal test data will be prohibited in cosmetic applications for new industrial chemicals if analysed after 1 July 2020. For more information: https://www.nicnas.gov.au/contact-us