Productivity Commission Study 
into Chemical and Plastics Regulation

The Productivity Commission Study into Chemical and Plastics Regulation includes within its scope a broad range of legislation for chemicals and plastics including workplace use, transport, environmental impact and use by the public. The focus of ACTU comments in response to the Issues Paper will be on the use of chemicals in the workplace.
Context of the Study and Issues Paper
Relationship to other reviews
The list of related reviews on page 7 of the Issues Paper does not include reference to the review of the Hazardous Substances Regulatory Framework undertaken by the Australian Safety and Compensation Council (ASCC) and its predecessor the National Occupational Health and Safety Council (NOHSC). This review resulted in the release for public comment of drafts of the National Standard and Codes of Practice for the Control of Workplace Hazardous Chemicals, for which comment closed March 2007. This set of documents were an important first step in bringing the regulatory requirements for hazardous substances and dangerous goods together in one framework consistent with the Globally Harmonised System for the Classification and Labelling of Chemicals (GHS).
It is critical that this review by the ASCC forms part of the considerations of the Productivity Commission Study.
Scope of the study
The Issues Paper sets out significant exclusions from the scope of the Study including ‘petroleum and coal product manufacturing’. It is not clear how extensive this exclusion is intended to be. Products derived from petroleum form a significant proportion of the chemical products used in workplaces and the domestic market within Australia. The vast majority of these products would be considered to be hazardous. 
It is therefore essential for petroleum-based products to be included within the scope of the Study.
The Issues Paper notes that ‘a large proportion of (chemical and plastics industry) output is used as an input in other sectors. In discussing the Issues Paper, the ACTU proposes to look at the need for regulation of chemicals and plastics across all industry sectors as the majority of workplaces using chemical products are outside of the chemical manufacturing and formulating sectors. The Study needs to apply the same breadth of scope.
Summary of current regulation
The Figure from the National Taskforce on Chemical Management and Regulation on page 10 of the Issues Paper that summarises the current regulatory framework is in our view overly simplified. We highlight that, even at a national framework level, the situation is far more complex than that shown. Separate streams should probably be shown for both transport of chemicals and environmental controls on chemicals. In the ‘industrial’ stream of the summary, the role of the ASCC as the lead agency for the control of chemicals within workplaces is not appropriately represented. Dangerous goods are within the scope of the ASCC when in the workplace and the National Transport Commission (NTC) when being transported.
In summary the ACTU emphasises the need for the report of the Study to show more fully the level of complexity of the chemical regulation framework.
ACTU response to specific issues
Types of regulation
The ACTU notes the definition of ‘self regulation’ given on page 11 of the Issues Paper, which includes the wording ‘with industry solely responsible for enforcement’. It is important to note that in the OH&S context (and possibly others) the meaning/usage of the term ‘self regulation’ has been more like the definition you have given for ‘co-regulation’.
The ACTU acknowledges and supports the role of industry in developing and implementing standards and codes for the control of chemical and plastic products. However, government agencies have a clear ongoing responsibility to set and enforce outcome standards against which the performance of industry can be judged.
‘Self-regulation’ as defined in the Issues Paper is not supported.
The case for change
A range of reviews has established a clear case for change, most recently the 2006 Regulation Taskforce. We endorse the comments in the Issues Paper that the current web of regulation is complex, voluminous, has duplications, inconsistency and gaps, and fails to adequately take account of international standards and approval processes. This is further exacerbated by multiple agencies within each jurisdiction and the inconsistency and lack of coordination between jurisdictions and agencies within them.
The consequences of the current complex framework of regulation is that it is difficult to understand, difficult to implement and difficult to enforce. A focus on compliance with this complex legislation has frequently taken the attention and effort of workplaces away from the key issues of controlling the risk of chemicals. 
The underlying technical issues relating to the hazard of chemicals and the ways of eliminating or controlling the risk arising from them are inherently somewhat complex, but not nearly as complex as the legislation and administrative arrangements currently in place within Australia to control this risk.
The current complexity of regulation is a barrier to all parties fully understanding and controlling the risk. How is an employer expected to understand all of the aspects of chemical legislation?  How can workers effectively participate in consultation if the chemicals framework is unnecessarily complex? How can you be sure that each government agency is aware of the full range of legislation applicable to chemicals?
Workplaces, particularly small and medium enterprises (SMEs), have great difficulty with the current framework. The result is that necessary controls to prevent harmful exposure of workers to chemicals are frequently not in place.
The human cost of inaction – occupational disease and death
This case for change is most commonly discussed in terms of the financial burden created by the web of legislation and administering agencies. The ACTU emphasises that the cost is not just financial.
The failure to control the risk of chemicals can lead to considerable cost in human suffering – occupational disease and death resulting from contact with chemicals in the workplace. The scale these human losses is indicated in a recent ASCC report which estimates that 1.5 million Australian workers are potentially exposed to carcinogens at work and that as a result of this workplace exposure there are 5000 serious cancer cases per year (leading to 2000 deaths per year).
Difficulties in achieving reform
Despite numerous reviews there has not been any fundamental reform of the chemicals and plastics regulatory framework. The current initiatives of COAG to drive reform are strongly supported. However there is a range of factors that act as barriers to this reform:
•	The current framework is very complex with multiple streams of concern (e.g. industrial, Agvet, transport, environment) and legislation enacted for each stream by the Australian Government and the governments of each Australian state and territory.
•	There are a large number of agencies administering and coordinating the legislation, all of which must work together if change is to be achieved. 
•	Any necessary change will take a significant time to bring about.
•	Even when there has been consultation, an RIS and agreement on a standard or model regulation at a national level, many states and territories have repeated this process, within their jurisdiction, developing ‘variations’ considered necessary for their particular circumstances. This has lead to significant variations from the agreed standard.
•	The inadequacy of the agreed national standard is stated as a key reason for jurisdictions ‘going their own way’. This is considered to arise from consultation that has not adequately tested the practicality of the proposed national standard and a lack of sufficient resources in the agency developing the standard.
•	Agreement at ministerial level has not always flowed through to all parts of the relevant department within each jurisdiction. There are potential barriers and sources of inertia between the minister’s office and the technocrats who have to undertake the detailed work to bring about change (e.g. SSAN).
•	In each jurisdiction there often several departments and agencies involved in the regulation of a particular aspect of chemicals and plastics. Agreement at COAG (or ASCC) has not necessarily been picked up all of these other departments and agencies.
•	There is a considerable investment in maintaining the current arrangements. Many government agencies have resistance to a simplified structure, because it would change their role and status, or because of the view that their way of doing things is the best. Some industries also benefit from aspects of the current complex arrangements.
•	Most importantly there has been a lack of sustained imperative at the highest levels of government for a change.

The long-term role of COAG is vital to drive and maintain the momentum for change across all jurisdictions. Intense effort, leadership and commitment is needed to make sure a nationally consistent framework of highest standards and practices are achieved
No grounds for maintaining jurisdictional differences 
There are no grounds for preserving jurisdictional differences between the legislative requirements relating to technical outcomes (labels, safety data sheets, exposure standards) and processes associated with the control of chemicals (risk assessment, consultation). There are some variations in the expression and form of parent legislation within jurisdictions, but there is no need for this to result in different ‘technical’ requirements.
All states and territories should uniformly adopt an agreed national standard for each aspect of regulation for chemicals and plastics.
Risk based legislation
The term ‘risk-based approach’ is used in the Issues Paper. The ACTU considers that it is necessary to clarify the intended meaning of this term. Does it apply to the broad aim of regulating to reduce the risk of chemicals or is it only being applied to a narrower usage for so-called risk-based labels?
A broad risk-based approach to regulating chemicals
In preventing the harmful exposure of workers to chemicals, the principal duty is on employers to eliminate or control the risk to workers arising from the use of chemicals in the workplace. The risk (likelihood and severity of harm) and the necessary controls will not be the same for all circumstances in which a particular chemical is used. In order to determine the necessary controls for a particular situation, an assessment of risk need to be made based on both the nature of the chemical (hazard) and the way in which it is to be used (potential for exposure). This risk-based approach is adopted in all OH&S legislation and supporting codes of practice.
The role of the GHS
The risk assessments described above require the ready availability of information on the chemical identity of the product, details of its hazardous properties and key safety precautions. This information needs to be in a form that is readily recognised and understood by both employers and workers. The GHS provides a streamlined approach through a consolidated system of classification, labelling and information provision using safety data sheets (SDS). If adopted across all aspects of chemical legislation and control it will greatly reduce the confusion and duplication of the current multiple approaches to this task.
Risk-based labelling
The term risk-based is also more narrowly applied to labelling, such as that for Agvet chemicals, where the label includes instructions and precautions for use that have been developed through a risk assessment process based on the approved use or application of the product. The risk-based components of such labels should not be seen as an alternative to hazard information, such as hazard pictograms and hazard statements, but rather as an adjunct to it. The two components of information are compatible. 
It is not only end users (undertaking an approved application of the product) who require information about a chemical product. It is particularly important to have hazard information on labels for emergency services, transporters, retailers and others to enable them to take appropriate action in case of spillage or leakage during transport or storage. It should also be recognised that there are cases of non-approved use for which the risk information on a label may not be sufficient.
Strong regulation is commensurate with the problem?
Strong regulation is required to establish and enforce minimum standards that will prevent the very substantial potential cost of harmful exposure to chemicals of workers, the general public and the environment 
If a consolidated and streamlined legislative framework is developed it does not have to be burdensome. However the current maze of complex legislation and administering agencies is both burdensome and counterproductive – the complexity acts as a barrier to achieving effective prevention of exposure.
OHS regulation already provides ‘flexibility’ to adapt to changing circumstances
Current OH&S legislation is based on broad prevention duties, provision of information and a risk-based approach to eliminating or controlling the risk of chemicals. In general OH&S legislation sets performance outcomes (e.g. not exceeding exposure standards). It is based on addressing the chemical product being used and the circumstances in which it is used. This approach allows industry to develop new controls (‘flexibility’) to adapt to new products or new applications. No changes are required to OHS&S legislation in order to provide this ‘flexibility’.
Even where a particular chemical entity is cited by legislation (e.g. lead, silica dust) there is generally some flexibility in the way in which an employer controls the risk. In a few cases (e.g. asbestos, SSAN) there are bans or severe restrictions placed on use because of community recognition of the very high risk associated with them.
In some aspects of OH&S legislation for chemicals there are prescriptive requirements for matters such as the minimum information content of labels and SDS. However, OH&S legislation does not require approval of labels or SDS. Other regulatory frameworks for chemicals could also adopt this approach.
Clarity of objectives versus achieving those outcomes
In general the objectives of chemical legislation are clearly stated. However, the volume and complexity of the legislation, and multiple government agencies administering it, act as barriers to achieving these objectives.
Difficulties with current regulation of chemicals and plastics
The complexity of the legislation for the control of chemicals used in the workplace leads to difficulties in understanding the full nature of the hazards, uncertainty about which legislation applies and difficulty in implementing appropriate controls. This is best illustrated by the fact that there are separate regulatory frameworks for dangerous goods and hazardous substances, noting that a large proportion of workplace chemicals are both dangerous goods and hazardous substances. SMEs in particular have difficulty in understanding the two sets (at least) of legislation and applying necessary controls in their workplaces.
Achieving a balance between regulation for different aspects of chemical hazard
The ACTU is principally concerned with protection of workers from harmful exposure to chemicals, but this needs to be achieved in parallel with protection of the general public and the environment.
In the workplace context it is important that both the long term and immediate harm of chemicals is addressed. The immediate risks of chemicals – explosions, fire and acute poisoning – is generally well recognised. However, the longer-term impact of chemicals on worker health is less visible and not well understood. There is little awareness that the scale of occupational disease and death resulting from chemical exposure to chemicals is orders of magnitude greater than that arising from immediate chemical hazards. OH&S legislation for chemicals and plastics must cover both the long-term and immediate potential harm from chemicals.
The need for greater monitoring of the effectiveness of legislation
Until relatively recently, regulators within Australia have undertaken very limited monitoring of the effectiveness of chemical legislation, particularly that dealing with prevention of exposure of workers. This is in part reflected by the very low number of prosecutions for failures to control risk, despite a significant incidence of non-compliance found in reviews and studies by parties other than regulators.
The picture obtained from limited studies is variable:
•	WorkSafe Victoria has found that the SDS provided by manufactures and suppliers were frequently too generic to be readily applied to specific workplaces.
•	In general the level of understanding and use of exposure standards was poor.
•	A recent ASCC study found that many SMEs had significant difficulties in obtaining information and implementing necessary controls for chemicals. The study did however identify several factors that assisted SMEs to put necessary controls in place (e.g. industry specific advice).
•	The Queensland Workplace Health & Safety Division found that a significant proportion of enterprises did not undertake the required hazard identification and risk assessment for chemicals.
There is a clear need for jurisdictions to monitor the implementation of chemical legislation, in particular the use of appropriate control s to prevent chemical exposure. The results of this monitoring could then be used as the basis for planning information programs, support to industry, well-targeted enforcement and where necessary making improvements to the agreed national standard.
Failure to implement findings of reviews of particular chemicals
The findings of NICNAS reviews of particular chemicals have frequently not been taken up by jurisdictions, despite a memorandum of understanding that the findings will be acted on. Substantial changes to workplace controls have been recommended in NICNAS findings. It is imperative that all jurisdictions act on NICNAS recommendations for workplace improvements.
Proposals for alternatives to government regulation
We have already commented on ‘self-regulation’ as defined in the Issues Paper.
The stated limitations given in the Issues Paper for self-regulation - poor accountability and non-transparent procedures – are a significant part of the ACTU opposition to self-regulation as defined. Another vital shortcoming is that most SMEs lack ready access to, and an ability to apply, a self-regulatory approach.
The statement that self-regulation is ‘probably least effective where it matters most – in relation to rogue businesses’ is unhelpful as it puts too much emphasis on what is only a small part of the picture. True, rogue businesses will not respond to self-regulation. However, a more fundamental limitation is, as stated above, the limited capacity of SMEs to implement self-regulation. They do not have access to information or resources to implement this approach.
The ACTU supports the role of industry in developing and implementing codes and guidance for the control of chemicals. However, these industry codes need to be developed against performance outcomes and standards established by government. Where performance falls short of these standards, enforcement action by government is required. Without government enforcement there will not be an imperative for many companies to comply.
There are good examples of how co-regulation can work (e.g. Plascare) and the ACTU supports this approach provided it involves consultation with workers and their representatives.
Access to information on chemicals
In the workplace, the most important source of information is the SDS produced by the manufacturer of the chemical. The only limitation on the value of SDS has been that many SDS provide very generic information, which is difficult to apply to specific workplaces. It is important that the quality of SDS be improved.
In addition to the SDS, there is a need to be able to access specialist technical information from manufacturers or suppliers on specific controls for chemicals (e.g. materials of construction, specialised components). This level of detail is not generally given in an SDS. Provision of this type of information is a requirement of some but not all jurisdictions. It should be a requirement for all Australian workplaces.
Improved understanding by the general public
An important step in improving the understanding of the general public about the hazard and risk control for chemicals would be simplified single way of talking about chemical hazard. The GHS would provide a way of doing this.
Expertise of the regulators
Most agencies, which regulate chemicals and plastics, employ specialist staff to assist in the oversight and enforcement of their legislation. The qualifications and experience of these specialists varies widely. The number of specialist staff is generally too few for the scope of coverage of the regulation and number of workplaces to which it applies. The level of expertise is generally sound, but there is often insufficient expertise in specific high-risk premises or a lack of up-to date industrial knowledge. Sometimes contractor or consultants are used to fill these gaps.
The ‘head office’ expertise is not always readily available to officers of the regulator in the field.
A range of strategies needs to be employed to ensure that regulators have sufficient people with the necessary specialist expertise and people with knowledge of current industry best practice.
Although not a regulator, the ASCC is the lead agency for workplace chemicals. The level of resources for chemical safety within the ASCC is considerably less that that provided within its predecessor the NOH&SC. This adversely impacts on their ability to deal with, and consult on, the wide range of OH&S issues associated with chemicals in the workplace.
Dealing with confidential commercial information
Currently some information about chemical products is not made generally available on the basis of maintaining commercial confidentiality, in particular the names of ingredients or precise formulation details. In the OH&S context, some provision is made for this information is to be provided to a medical practitioner when required for emergency treatment and to workplace parties where required in order to implement necessary control measures. However, the stringent limits placed on how this information is provided and used, have significant potential to act as a barrier to readily gaining necessary information on these chemicals. Comprehensive information must be available on the hazards and necessary controls for all chemicals in the workplace.
The ACTU is opposed to provisions that limit access to information on commercial grounds, particularly because of the potential for these provisions to be misused. If such commercial confidentiality is to be maintained in regulation, it must be limited to as few circumstances as possible and sufficient oversight must be in place to ensure such provisions are not misused.
Improving consultation
Consultation in relation to chemical risk occurs at 2 levels – when developing legislation and standards at a national or jurisdictional level, and when applying the legislation and standards at individual workplaces.
At either level consultation will only be effective if:
•	there is complete and detailed relevant information available
•	there are sufficient resources (time, expertise) to enable an informed response to the information provided
•	there are truly representative participants involved in the consultation.

At an enterprise level the current OH&S Acts and Regulations set out a process and standard for consultation that has the potential to be effective provided that the requirements are followed and resourced.
At the level at which legislation and standards are developed, the process of consultation is not necessarily clearly defined and most of the consultation is with peak representative bodies. Consultation about chemical regulation has mainly involved manufacturers, formulators and suppliers of chemical products. Workplaces where chemicals are utilised (as distinct from made) have generally not been significantly involved in consultation; resulting in proposed regulation that has not been well informed about its practicality in general workplaces. 
A range of strategies and resources is required to obtain greater input from general workplaces that have to apply the legislation and related codes.
The Chemical Standards Sub-committee (CSSC) of the previous NOHSC provided an effective consultative framework for the development of chemical regulation for workplaces and was conscious of the need for input from workplaces that had to apply the regulation. ASCC, the successor to NOHSC, does not have such on-going and effective forum.
The case for change is not just financial
The cost for implementing change is discussed on page 18 of the Issues Paper mainly in financial cost terms.
The ACTU strongly emphasises the need to understand the very high cost of not reducing exposure of workers to chemicals in the workplace – occupational disease and deaths. These human costs have a huge impact on families and the community. This does lead to a large associated financial cost, but this is not easy to quantify
The thrust of chemical legislation should be about ensuring that controls are in place to eliminate or minimise exposure to chemicals. Minimising the administrative overheads of legislation will increase the focus on putting necessary controls in place, as well as reducing costs to enterprises.
Coordination across jurisdictions
As discussed earlier in our submission there is a significant barrier to effective chemical control arising from multiple agencies in nine jurisdictions legislating for multiple aspects of chemicals.
A number of approaches are required to make this manageable:
•	Within jurisdictions, the number of agencies should be rationalised (e.g. in Queensland bringing together all aspects of workplace chemical use under one administration)
•	COAG should put in place a much more rigorous approach to ensuring national uniformity. After consultation, an RIS and agreement on a standard at a national level, jurisdictions and their stakeholders must be held accountable for uniformly adopting this standard by an agreed time. There should be no variation in technical or process requirements between jurisdictions.

There is no case for there to be different technical and process requirements between jurisdictions or between different agencies within a jurisdiction. There are no advantages, just increased complexity and administrative overheads.
There are good examples of coordination between jurisdictions, the most striking being the uniform approach taken for dangerous goods transport since the 1980s - the Australian Dangerous Goods Code has been adopted by all states and territories as the basis for road and rail transport of dangerous goods. This has been achieved despite significant differences in parent legislation within the jurisdictions.
The attitude of regulators to development of legislation
The proposition that regulators may ‘regulate first and ask questions later’ in the development of chemicals and plastics regulation was raised through the Regulation Taskforce in 2006. The ACTU can see no basis for this proposition. Regulation has been developed where there is evidence or specific major incidents of people or the environment being significantly harmed. In each case consultation and an RIS have occurred – the scope and extent of input into these is a responsibility shared by both industry and government.
Improving enforcement
As previously discussed, the level of enforcement of the requirements of legislation for chemicals is low across all jurisdictions. Surveys undertaken of the control of chemicals in the workplace have shown significant non-compliance with both failure to effectively control exposure (e.g. no effective ventilation) and failure to undertake prescribed activities (e.g. not obtaining, SDS, not carrying out risk assessments).
Some of this non-compliance is deliberate. However, much is the result of ignorance, poor access to information, a perceived or actual lack of resources or other competing business issues. In each circumstance the regulator has a responsibility to improve the availability of practical information, support for industry and enforcing minimum standards. There must be enforcement action for significant non-compliance. There is little imperative to comply when competitors are not be prosecuted for non-compliance.
A new and effective framework for chemical and plastics regulation
A range of elements is required in a new and more effective regulatory framework for chemicals and plastics
•	A single classification and information provision system should be used across all aspects of chemical regulation – the GHS
•	Where possible current separate aspects of chemical legislation should be combined (e.g. dangerous goods and hazardous substances). The GHS provides the foundation for this.
•	Prescriptive and administrative elements for different aspects of chemical hazard should be harmonised to suit the needs of the currently separate streams of regulation. There should be a single overarching requirement for labelling, information provision, exposure standards and assessment of new chemicals.
•	International standards and the results of international assessments should be recognised unless they are clearly developed by a process significantly outside of Australian expectations (e.g. standards developed without consultation).
•	Prescriptive elements (e.g. labels) should be set as minimum components to be included on a label, rather than requiring an approvals process.
•	Duties within the regulatory framework should be mainly about meeting performance outcome standards, rather than prescribing the way of achieving the outcome.
•	A co-regulatory approach should be encouraged provided it involves the participation of the full range of relevant participants (e.g. for workplace chemicals employers and workers). However, self-regulation (as defined in the Issues Paper) is strongly opposed.
•	A wide range of practical information and guidance needs to be available to employers (especially SMEs), workers and the general public.

Adoption of the GHS across Australian chemical regulation
As discussed above, the GHS should be implemented across all sectors of chemical and plastics regulation. It is a classification and information system that is not in conflict with any of the sectors or their specific regulatory needs (including Agvet chemicals and scheduled drugs and poisons).
Where the hazard-based elements of the GHS labelling requirements are seen as insufficient (e.g. for Agvet chemicals and scheduled drugs and poisons) additional risk-based phrases could be added, based on the approved uses. The hazard-based and risk-based components of the label are compatible.
The timing of the introduction of the GHS is an important issue. It would be prudent to wait until some of our major trading partners have or are about to adopt the system. This would enable Australian manufacturers and importers to utilise overseas classification, labelling and SDS information – avoiding duplication and cost. However, we should not be waiting for all or most of our trading partners to adopt the GHS, as the wait may be quite lengthy.
Australia has been an active participant in the development of the GHS and it is appropriate that we are relatively early adopters of the system, while waiting enough time to take advantage of work done overseas by those leading the way on adoption. Following developments in the EU may give the best indication of appropriate timing.
An extended delay in moving Australia to the GHS will most likely continue the current regulatory maze for the same extended time. The GHS is the best foundation we are likely to have for bringing a about a consolidation and simplification of the regulatory framework for chemicals.
Priority issues
The ACTU considers that following matters discussed in the Issues Paper to be of the highest priority:
•	Occupational disease and death should be more clearly understood to be a consequence of failing to control the potential risk of chemicals. This cost is a major reason for strong regulation to be in place.
•	The current complex regulatory web and multiplicity of administering agencies are counterproductive to effective regulation.
•	COAG must assertively pursue the development and uniform adoption of national standards for chemical and plastics regulation.
•	In order to produce high quality standards, the agency developing national standards must be sufficiently resourced to write the standard, undertake representative consultation and prepare a credible RIS.
•	It will be essential to ensure that sufficient resources are available to all stakeholders expected to participate in consultation.
•	The GHS should be adopted across all chemical and plastics regulation as the basis for classification and information provision. Additional elements may be included for some streams of regulation provided that a substantial benefit can be shown for such additions.
•	Within each jurisdiction regulation for chemical and plastics should be based on adoption (without variation) of the agreed national standards. Consultation and RIS should not be repeated at jurisdictional level.
•	The number of agencies regulating chemical and plastics should be reduced/rationalised.
•	Legislation for chemicals and plastics should be outcome focussed, setting minimum performance standards. These minimum standards should be enforced.
•	Co-regulation is acknowledged as having a valuable contribution to play in the prevention of harmful exposure to chemicals. However, self-regulation, as defined in the Issues Paper, is strongly opposed.

The ACTU can play a significant role in the development of a coordinated and streamlined approach to regulating chemicals used at work as well as promoting and disseminating these vital improvements in the workplace.

Australian Council of Trade Unions
October 2007