Australian Industrial Chemicals Introduction Scheme – Changes to the regulation of chemical ingredients in cosmetics from 1 July 2020

Wide-reaching legislative changes are about to impact the way industrial chemicals in Australia are regulated. A new regulatory scheme, the Australian Industrial Chemicals Introduction Scheme (AICIS), will be implemented on 1 July 2020.

AICIS will replace and simplify the current National Industrial Chemicals Notification and Assessment Scheme (NICNAS). On the same date, the use of new animal test data will be restricted for chemicals:

• which have a sole use as a cosmetic ingredient; or
• an end use in cosmetics.

Background

In May 2015, the Australian Government announced its intention to implement reforms to the way in which industrial chemicals are regulated. The reforms are intended to streamline the process of assessing industrial chemicals to reduce the regulatory burden and to make regulatory effort more proportionate to risk.

The new legislative regime is contained primarily in the Industrial Chemicals Act 2019 (Cth) (the Primary Act), the Industrial Chemicals General Rules (the General Rules) and the AICIS Industrial Chemicals Categorisation Guidelines (the Categorisation Guidelines).¹

AICIS

The Primary Act contains provisions which establish the new regulatory scheme, AICIS. The critical difference between AICIS and its predecessor, NICNAS, is that AICIS places greater emphasis on self-regulation for chemicals which are classified as “low-risk”. Key changes include:

• When a new chemical is being introduced into Australia (whether for use in the course of manufacturing or as an ingredient, for example, in a cosmetic), the manufacturer or importer of the chemical or the end product (eg the cosmetic) will need to notify AICIS; and
• The Australian Inventory of Chemical Substances, which contains details of existing chemicals, will be replaced by the Australian Inventory of Industrial Chemicals (AIIC or the Inventory).

Under AICIS, all industrial chemicals will fall within one of five categories, determined by the level of risk posed to the environment and human health. The categories are:

1. listed, meaning the chemical is already in the Inventory and can be used for industrial purposes in Australia (provided any conditions of listing are complied with);
2. exempted, being a chemical that, because it poses such a low risk to human health and the environment, can be introduced in Australia without notifying AICIS beforehand. However, some exempted introductions will require the submission of a one-off post-introduction declaration (known as an ‘exempted introduction declaration’)²;
3. reported, being a chemical considered to be of low risk to human health and the environment. A one-off report must be submitted to AICIS before the chemical can be introduced;
4. assessed, being a chemical posing a medium to high risk to human health and the environment. AICIS must assess the chemical and issue an assessment certificate before the chemical can be imported into Australia or manufactured; and
5. chemical evaluation, under which a Commercial Evaluation Authorisation can be applied for to enable the chemical’s commercial viability to be tested in Australia.

The only requirements for ‘exempted introductions’, which pose the lowest risk, will be record keeping and an annual declaration of compliance. No notification fee will be required to be paid to AICIS. As there is no assessment, chemicals in this category will be able to be introduced more quickly to market. NICNAS considers that this reform will be an incentive for safer, new chemicals to be introduced, in place of more hazardous chemicals currently in use. NICNAS is anticipating that the number of industrial chemicals requiring a pre-introduction assessment will decrease by more than 70%.

The General Rules and the Categorisation Guidelines provide further detail about how the scheme will operate:

• The General Rules contain details about how the importation and manufacture of industrial chemicals in Australia will be regulated. This includes:
  • the categorisation of industrial chemical notifications (eg what is exempted or reported);
  • the reporting and record keeping requirements;
  • Confidential Business Information notifications and applications; and
  • the circumstances in which an application for a Commercial Evaluation Authorisation cannot be made.
• The Categorisation Guidelines set out the technical details and requirements to which importers and manufacturers must have regard when categorising their chemicals. Where a chemical is imported or manufactured under a permit, exemption or assessment certificate, the chemical will need to be categorised using the processes and criteria contained in the General Rules and Categorisation Guidelines.

There are also Transitional Rules, which set out the basis upon which the transition from NICNAS to AICIS will be managed. Among other things, the Transitional Rules address how various certificates and permits granted by NICNAS under the current law will operate once the new laws take effect.

New AICIS Website

The AICIS website will go live at https://industrialchemicals.gov.au on 1 July 2020. Guidance material will be available on the site.

Ban on Animal Test Data

Another key change introduced by the Primary Act is the introduction of restrictions on the use of new animal test data for industrial chemicals with a sole use as a cosmetic ingredient or that will have an end use in cosmetics. New animal test data will not be able to be used to categorise an introduction or for an assessment certification application unless one of a small number of exceptions applies. Instead, the development and use of alternative test methods will be encouraged via government funding. Like AICIS, this ban will commence on 1 July 2020.

Impact on Your Business

If a business is registered currently with NICNAS, the registration will be transferred automatically to AICIS on 1 July 2020. The registration year remains the same (1 September to 31 August).

Each of the above changes in respect of the categorisation of new industrial chemicals is material and must be adhered to by business owners in the cosmetic and personal care industry immediately. AICIS imposes classification requirements for industrial chemicals which differ significantly from those that exist under NICNAS, so care must be taken to ensure full compliance.

Businesses should be reviewing their processes now to ensure compliance.

If you would like more information about AICIS and/or how it affects your business, please do not hesitate to contact us.

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1. https://www.nicnas.gov.au/New-scheme-1-July-2020/Key-information-about-the-new-scheme#guidelines
2. Exempted introduction declarations are required for: polymers of low concern; low-concern biopolymers; and chemicals that the introducer has categorised as very low risk for human health and the environment

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