On 23rd December 2016, National Industrial Chemicals Notification and Assessment Scheme (NICNAS) announced that it would be continuing its consultation period in 2017 regarding the implementation of reforms, and is currently gathering information on the timing of activities.
NICNAS has published its fourth consultation paper and has asked for public feedback on its proposed updates.
Australia announced the proposed NICNAS - the country’s regulation for chemicals including cosmetics- as it intended to simplify the process. The intention is that the updates will benefit both manufacturers and importers while reducing the regulatory burden on the country’s cosmetics industry.
While the majority of changes will not be fully implemented until 1st September 2018, when the consultation papers have gathered and analysed feedback, some have already been in operation since 1st September 2016.
Making marketplace waves
The changes will take place as Australia aims to increase it competitiveness in the global marketplace.
In June 2016, Euromonitor International released its report on the beauty and cosmetics segment in Australia, which showed that it had experienced moderate growth in 2015.
With the presence of notable, global brands such as L’Oréal Australia, Procter & Gamble Australia, Unilever Australia, Colgate-Palmolive and Sephora, it is hoping that this simplification will increase its place in the global marketplace.
Simplicity or complexity?
However, as we reported last year, industry experts are predicting just the opposite with the reforms creating greater complexity . The European trade association held that “the current proposal increases complexity for the industry, is out of step with other global economies, and is unlikely to deliver meaningful reduction in the over-regulation of low-risk everyday products such as cosmetics”.
The reforms will focus on a risk-based proportionate regulatory system, that will include a rebalance of pre- and post-market regulatory requirements for new chemicals; a simplified existing risk assessment process for new and existing chemicals; increased usage of international assessment criteria and more appropriate compliance tools.
This risk-based analysis strategy will be applied to individual chemical profiles. These chemicals will be placed into three categories: exempted, reported (low risk) and assessed (medium to high risk).
‘Exempted’ chemicals will receive automatic entry and will not need a pre-entry assessment or post-market annual compliance declaration. Companies with chemicals that fall in this category will only be required to keep records and undergo audits to ensure safety and compliance.
Chemicals that fall into the 'reported' low-risk category will undertake a self-assessment and pre-market notification. They must also submit a yearly compliance declaration to NICNAS and receive an annual audit from the registration organisation.
The 'assessed' category is the most comprehensive as it stipulates that an assessment certificate is necessary before introduction and a risk assessment be carried out. It also states that a certificate may include particulars and may be refused if the risk cannot be managed. NICNAS will also carry out post-marketing auditing and post-market assessments if new risks arise.
While many argue that this criterion will result in added difficulties in promoting Australia’s cosmetics marketplace and will instead, discourage new businesses from entering due to “the complexity of the system and height level of information required”, Australian officials believe the changes will reduce the regulatory burden by $23 mn per year thanks to lower market entry costs and other associated chemical costs.
In 2015, Minister Nash said that the government planned to make an upfront investment of $7 mn (€6.6 mn) to enable the full costs of the reform to be recovered over a longer period of time.
“These changes mean low-risk industrial chemicals will get to market faster, allowing companies to create new products as well as safer versions of existing products,” reported Senator Fiona Nash, Minister for Regional Development in a government release.