18 minute read
AMTIL FORUMS
from AMT AUG/SEPT 2020
by AMTIL
Australia’s new industrial chemical regulations
There have been changes to Australia’s industrial chemical regulations. These changes include more monitoring and evaluation of products. Laura Whiteman and Lily Hou explain.
On 1 July 2020, Australia’s Industrial chemical regulations were changed. The National Industrial Chemicals Notification and Assessment Scheme (NICNAS) will be replaced by the Australian Industrial Chemicals Introduction Scheme (AICIS). Industrial chemicals in Australia are regulated by exclusion, meaning that a chemical is an industrial chemical if it is not for therapeutic use, agricultural or veterinary use, or a food. Anyone who imports or manufactures industrial chemicals in Australia must: 1. Register their business with AICIS and pay a fee. 2. Categorise the import or manufacture of each chemical. 3. Submit declarations and reports. 4. Keep records for a minimum of five years. 5. Provide information to AICIS if requested. The new scheme will focus primarily on higher risk introductions and will have a greater use of international assessments. The use of animal test data for cosmetic ingredients will be restricted, and more monitoring and evaluation of products will be undertaken. The new Industrial Chemical Act (ICA) requires introducers of industrial chemicals to categorise their introduction into one of five main categories: listed, exempted, reported, assessed, and commercial evaluation. It’s important to note that it will be an offence to not know what you’re introducing, or not having access to the required information from a supplier. If you are not aware of all of the required information, you will need to contact your supplier to help you categorise your introduction. Australia maintains a list of industrial chemicals that can be introduced or manufactured in Australia. This list is changing from the Australian Inventory of Chemical Substances (AICS) to the Australian Inventory of Industrial Chemicals (AICIS Inventory). This new inventory is solely for industrial chemicals, and approximately 1600 chemicals in the AICS will be removed from the inventory as they were not industrial chemicals. This new inventory will assist in protecting confidential business information (CBI) by using substitute terms, AICIS Approved Chemical Names (AACN) and Generalised End Use (GEU), where relevant. Where applicable, the new inventory will also include a defined scope of assessment, any conditions of introduction or use, and specific information requirements. For a “Listed” introduction, it will be important for manufacturers to ensure that they meet all the conditions associated with it on the AICIS inventory. This can include the volume permitted to be introduced or used, and where or how the chemical is allowed to be used. For a chemical not listed on the Australia Inventory, unless you introduce it for commercial testing in Australia, you will need further evaluation. It might have protected CBI which AICIS can determine by searching through the listings which might have AACNs or confidential terms. Genuine enquirers of these chemicals then gain rights to be notified and make applications under CBI protection. If the chemical is not on the inventory at all, then the importer or manufacturer will need to determine its risk level to humans or the environment for categorisation. There are three main categories for this:
1. Exempt introduction
a. Chemicals which are a very low risk. b. A one-off declaration is required after you introduce the product. c. Recordkeeping is required.
2.
a. b.
c.
Reported introduction
Chemicals with a low risk. A one-off declaration is required before you introduce the product. Recordkeeping is required.
3. Assessed introduction
a. Chemicals with a medium to high risk. b. An assessment certificate is required before you introduce the product. c. Recordkeeping is required. d. Leads to the chemical being added to the AICIS Inventory. Other information that you might need to know about your chemical includes the introduction volume and concentration, the end use and end use concentration, hazard information on the chemical, and if your chemical is in any specified class of introduction. If your chemical is a polymer, then a molecular weight is necessary. If your chemical has undergone international assessments that would also be useful to reference in your submission. All of this information can then be used to help determine the introduction category for the chemical. As part of the change, in March 2020, NICNAS published a list of chemicals with high hazards to human health and the environment for categorisation purposes under the Industrial Chemical Act. To provide introducers a tool for checking whether their chemicals are highly hazardous, NICNAS published the consolidated list of chemicals with high hazards that were based on one or more national or international information sources, such as the European Chemicals Agency (ECHA) Harmonised Classification and Labelling of Hazardous Substances (Annex VI to the CLP Regulation) and the Chemical Substances Control Law of Japan (CSCL) Class I and II Specified Chemical Substances. The list contains about 4,500 chemicals with their Australia inventory status, as well as the hazard classification data from the trusted sources. Recommended action For more information on how to categorise your chemical introduction, please refer to the AICIS Guide to categorising your chemical importation or manufacture on the AICIS website.
Laura Whiteman and Dr. Lily Hou are both senior regulatory specialists at UL, which provides innovative material and regulatory data solutions to facilitate a transparent and sustainable product supply chain. With fully automated chemical compliance software platforms, industry-leading data resources, and an unprecedented global network of regulatory expertise, UL removes barriers and solves critical challenges to help companies stay one step ahead of global regulations. For all of the latest regulatory news and the most important industry updates, you can sign up to UL’s monthly regulatory newsletter. Email: customerservice.anz@ul.com Ph: 03 9846 2751 https://msc.ul.com/en
What are the new laws around asbestos? New laws regulating asbestos in the workplace have been issued by Safe Work Australia. Brendan Torazzi explains.
Asbestos was banned in Australia in 2003 but remains a potential health risk in various workplaces. When asbestos is discovered by a WHS regulator, the regulator may issue a notice requiring the removal or containment of the asbestos. Unfortunately, the laws related to asbestos were not entirely clear. To address the uncertainty about possible gaps in the existing powers to regulate asbestos under the model WHS laws, Safe Work Australia introduced new laws. What are the new asbestos laws? The new asbestos laws are defined in the Model Work Health and Safety Legislation Amendment (Asbestos) 2019. The amendment includes 11 changes to the WHS Act and two changes to the WHS Regulations concerning asbestos in the workplace. The changes were made to add new compliance power for WHS regulators to issue prohibited asbestos notices at a workplace. Before the amendment, there was some confusion surrounding the circumstances where a regulator may issue a notice. WHS regulators are individuals that monitor and enforce compliance with the WHS laws in each jurisdiction. The new laws allow them to issue a notice when they reasonably believe that prohibited asbestos is present. The notice must be issued to the “relevant person in relation to a workplace,” which is typically the owner of the property. When issuing a prohibited asbestos notice, WHS regulators must include the following information: • The basis for the belief that asbestos is present in the workplace • Details of the asbestos, such as the potential location, condition, and type of asbestos • Specific measures for dealing with the asbestos • A set date by which compliance is necessary The amendment also includes various clarifications to the definitions included in the existing laws. For example, the amendment added “asbestos-containing material (ACM)” in the definitions for asbestos. The laws also define the power of the regulator to take remedial action if the improvement notice was not complied with. The regulator now has greater flexibility for determining what measures need to be taken to deal with the asbestos. While the immediate removal of asbestos is the ideal solution, removal is not always appropriate. For example, there are situations where the asbestos does not pose a health risk in its current state but may create a health risk during removal. When did the laws come into place? The new laws were introduced in 2019 as an amendment to the model WHS Act and model WHS Regulations. The original WHS laws were developed by Safe Work Australia in 2011. The laws are known as “model” laws. For model WHS laws to become legally binding, each state and territory must separately implement them. Who does it affect? The new laws affect WHS regulators and the “relevant person in relation to a workplace.” In some cases, multiple people may be responsible for dealing with asbestos in the workplace due to different workplace arrangements. The relevant person may include the property owner, manager, or employer.
If you are a company that carries out work in a setting where asbestos may be present, you should ensure that your employees have the necessary training. The new laws do not change the requirements for identifying or removing asbestos. There are several types of asbestos removal training courses intended for different roles. Any employees whose work may reasonably involve exposure to asbestos should complete the 10675NAT Course in Asbestos Awareness. It is a nationally recognised training course, but it does not meet compliance for the removal of asbestos. Employees whose work may require the removal of asbestos or asbestos-containing material (ACM) must complete the Remove Non-Friable Asbestos (Class B) course or the Remove Friable Asbestos (Class A) course.Non-friable (Class B) asbestos contains less of a health risk compared to Friable (Class A) asbestos. With non-friable materials, the asbestos is bonded to other products, such as cement or plastic mixed with asbestos. Friable asbestos includes materials that are powdery or can easily become dust when crushed, increasing the risk of inhalation and exposure. As the asbestos is easily released into the air, it poses a greater threat. What measures should companies take? Companies should continue to follow the model Codes of Practice for dealing with asbestos and asbestos-containing material (ACM). As mentioned, there are asbestos removal training courses available that directly address the identification and removal of asbestos. Why do you need to comply? Failure to comply with a notice may result in steep penalties.The amendment makes it an offence to not comply with a prohibited asbestos notice. The law allows a maximum penalty of $500,000 for corporations and $100,000 for individuals. WHS regulators also have the power to take other remedial action on top of the penalty. For example, a regulator may choose to carry out the measures specified in the notice and any other measures that the regulator believes may increase the safety of the workplace. In these situations, you are required to cover the costs of the measures. The amendment was designed to increase the safety of workplaces concerning asbestos, which was banned in Australia in 2003. To maintain compliance with WHS laws, always follow the outlined recommendations when presented with a prohibited asbestos notice.
Brendan Torazzi is the CEO of AlertForce - a registered training organisation specialising in short Health and Safety courses to meet compliance. Brendan also runs the Australian Health and Safety Business Podcast and is the owner of OHS.com.au, an online marketplace for safety courses. Ph: 1800 900 222 www.alertorce.com.au www.OHS.com.au
Protect your business against foreign exchange fluctuations
Colin White offers advice on how to protect your business from the impact of foreign exchange rate fluctuations during these challenging times.
If there's one thing that the current series of events has reminded us of is the fact that unforeseeable events can happen at any time, and with potentially devastating repercussions for any business that relies on transacting in foreign currency or purchases equipment from overseas suppliers. According to recent findings by specialist banking market research and analysis firm, East and Partners, Australian businesses suffered currency losses of up to AU$3.4bn in the last six months - highlighting just how damaging changing business cycles and volatile financial markets can be. Despite the current economic uncertainty, the good news is that there are ways you can protect your business from the impact of foreign exchange (FX) rate fluctuations during these turbulent times. The key is to build a risk management strategy around your business, and not just the market, by suitably hedging your FX currency risk. Why do businesses hedge their FX risk? FX rate fluctuations can negatively impact any business that: • imports or exports goods and services from overseas; • sends or receives funds in foreign currencies; or • requires greater certainty for cash flow planning and budgeting purposes. The process of FX hedging includes: 1. Identifying your FX risk
FX risk arises when a company engages in financial transactions in a different currency other than that of where the company is based. Any change in the value of the relevant currencies against the other will affect the resulting cash flows of the transaction. 2. Setting your objectives
Your FX hedging policy should take into account whether you need to protect or improve margins, your market competitiveness and cash flow requirements. Once these factors are established, it is possible to better determine your hedging requirements. 3. Creating a plan
FX hedging can be complex, so it is recommended to speak with an FX specialist about the best FX products available.
Some of the most common products and services available include:
Forward Exchange Contract (FECs) – an agreement to buy (or sell) a fixed amount of foreign currency at a fixed exchange rate on an agreed future date (usually chosen to align with a scheduled payment you expect to make or receive).
Establishing an FEC gives you certainty over the amount of
Australian dollars that you will pay or receive in return for a fixed amount of foreign currency on that future date.
Foreign Currency Options – provides your business with the flexibility to protect against adverse exchange rate fluctuations and also take advantage of any favourable currency movements.
Foreign Currency Accounts and Deposits – whether your business is receiving or sending funds, a foreign currency account can help you manage your cash flows and currency requirements and reduce costs associated with unnecessary conversions. If you have the flexibility, foreign currency deposits can provide a better rate over a fixed term, with a fixed rate of interest.
Unsecured Foreign Exchange – allows small-to-medium businesses to transact FECs without the need to pledge for assets as security; and
Trade Finance – working capital solutions provide your business with end-to-end funding options including shortterm trade loans, documentary letters of credit as well as escrow equipment finance. In situations where cross-currency transactions require cash-flow certainty, your business may also have the opportunity to overlay their working capital solutions with FX hedging. Documentary Letter of Credit (LCs) One of the most popular financial products to manage risk when importing equipment from overseas suppliers is the documentary letter of credit. This financial instrument protects the buyer as they pay a minimal deposit, coupling this with currency hedging minimises most of the risks in this type of transaction. Typically, a supplier will require a deposit of 30-50% to be paid prior to shipping, with a further amount payable on shipping usually 90% of the invoice value. Shipping is evidenced by production of original bills of lading. Most suppliers will reduce the deposit requirements when using an LC as the Documentary Letter of Credit is a guarantee of payment if they meet certain milestones. Most financial institutions will require you to provide security of up to the full amount of the item cost until the asset arrives in the country and has cleared customs. These facilities can be expensive and tie up additional cash or assets that are then difficult to release. There are products that allow for deposits of up to 20% to be paid overseas using just the asset as security and do not use any cash or business assets as additional collateral. Progress payments are made in line with agreed trading terms and converts to a simple finance agreement once the goods have arrived. This allows for the business to preserve cash in the business and not have to go through the lengthy process of providing additional security. The supplier is guaranteed their monies so long as they meet the milestones outlined in the purchase agreement. In summary there are multiple ways to minimise risk with international trade. • Investigate foreign exchange hedging products to suit your needs. • Minimise deposits paid to overseas suppliers. • Minimise security given your bank for financial transactions. This is not an offer of finance or financial advice.
Colin White is Director, Interlease Pty Ltd. Interlease can provide you with all these solutions and more. Feel free to discuss all your FX and Equipment import requirements with us. We are here to help. Ph: 03 9420 0000 www.interlease.com.au
The Wage Theft Act
The phrase ‘wage theft’ has been introduced into the Australian industrial landscape. Nicholas Kelly and David McLaughlin explain.
The Wage Theft Act 2020 (Vic) (Wage Theft Act) passed the Victorian Parliament on 16 June 2020 and commencess operation on 1 July 2021. The underpayment of wages and entitlements have has been a particularly fraught issue in Australia over the past few years with a number. A range of large employers have self-reporting ed underpayments to the Fair Work Ombudsman. These instances of underpayments have coincided with a push to criminalise some types of deliberate underpayment. As a result, Tthe phrase ‘wage theft’ has been introduced into the Australian industrial landscape. Underpayment of wages and record-keeping obligations are issues that have historically been governed by industrial relations laws that, if not abided by, may lead to civil penalties being imposed on employers. The Wage Theft Act is different. It is the first piece of legislation in any jurisdiction in Australia that creates statutory criminal offences related to non-payment of employee entitlements or the falsification of employee records. Offences Under the Wage Theft Act there are three main criminal offences. Offence 1 - Dishonestly withholding of employee entitlements It is an offence under the Wage Theft Act for an employer or an officer of an employer to dishonestly withhold (or permit or authorise another person to withhold) the whole or part of an ‘employee entitlement’ owed by an employer to an employee. Under the Wage Theft Act ‘employee entitlements’ include: • wages or salary; • allowance; • gratuities; and • the attribution or: • annual leave; • long service leave; • meal breaks; and • superannuation in accordance with relevant laws, contracts or agreements that apply to the employees. Offence 2 - Falsification of employee entitlement record to dishonestly obtain It is an offence under the Wage Theft Act for an employer or an officer of an employer to falsify (or permit or authorise another person to falsify) a record of an employee entitlement with the view to dishonestly: • obtaining a financial advantage for the employer or another person; or • preventing the exposure of a financial advantage for an employer or another person. Offence 3 - Failure to keep employee entitlement record It is an offence under the Wage Theft Act for an employer or an officer of an employer to fail to keep (or permit or authorise another person to fail to keep) a record of an employee entitlement with the view to dishonestly: • obtaining a financial advantage for the employer or another person; or • preventing the exposure of financial advantage for an employer or another person. Defences The “dishonest” component of the offences is assessed objectively by the standards of a reasonable person. However, in assessing whether a withholding of employee entitlements is “dishonest” an employee’s consent is an irrelevant factor if the withholding, falsification of a record or failure to keep a record by the employer reduces the entitlement to less than the minimum amount required under relevant laws. An employer will be able to defend a charge under the Wage Theft Act by proving that it took all reasonable steps to prevent the conduct occurring. Therefore, the need for a proper due diligence process to be in place to demonstrate reasonable steps is essential. Who is liable? An employer, officers of the employer (including key decision -makers) and individual partners in a partnership may be personally liable under the Wage Theft Act. Penalties? The penalties that are maybe imposed for committing an offence under the Wage Theft Act are steep and include: • fines of up to $990,000 for corporations; and • imprisonment for up to 10 years and/or fines of up to $198,000 for individuals. Enforcement The Wage Theft Act establishes the “Wage Inspectorate Victoria (Inspectorate)”. The Inspectorate has multiple functions under the Wage Theft Act to promote and inform people in relation to the Wage Theft Act. However, the Inspectorate’s functions include: • the investigation of possible criminal offences under the Wage
Theft Act; • bringing criminal proceedings in relation to alleged offences under the Wage Theft Act; and • to work with the Office of Public Prosecutions in relation to alleged offences under the Wage Theft Act. What Next? The commencement of the Wage Theft Act is about a year away. The Federal Government has already indicated it intends to introduce legislation that relates to the criminalisation of deliberate underpayment of wages and has criticised the Victorian Government for introducing its own legislation. There are potential arguments that the Wage Theft Act is unconstitutional and because it is inconsistent with the Fair Work Act and there may be further arguments that the Wage Theft Act is unconstitutional if the Federal Government introduces its own legislation that criminalises certain forms of underpayments. It is very much an uncertain state of affairs. However, it is more important than ever that businesses understand their obligations to employees under legislation, modern awards, enterprise agreements and employment contracts in order to prevent the prospect of the Wage Theft Act ever being potentially applicable to them.
