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Merger law reform in Australia: What next after the Exposure Draft?
As expected, the Australian Commonwealth Treasury released an exposure draft for the proposed new Australian merger regime on 24 July 2024.
Australia | Publication | May 2024
Legislation was recently made in New South Wales that has fundamentally changed the way in which chemicals are managed in the State. The EPA will now regulate industrial chemicals through various mechanisms including requiring Environment Protection Licences for activities involving high-risk industrial chemicals like certain PFAS and polychlorinated naphthalenes; issuing of Chemical Control Orders and related EPLs; and the imposition of general duties and associated enforcement powers relating to pollution incidents concerning listed industrial chemicals. In this article, we unpack the mystery behind IChEMS and its recent adoption in NSW.
If listed industrial chemicals are a component of your value chain, read on….
The Industrial Chemicals Environmental Management Standard (IChEMS) is a national framework developed by the Commonwealth government, in cooperation with the States and Territories, to manage and address risks posed by industrial chemicals across Australia.
Under federal legislation, the Commonwealth Minister of the Environment has the authority to make scheduling decisions under which industrial chemicals are listed on a publicly accessible register known as the IChEMS Register (Commonwealth Register). Industrial chemicals can be listed on one of seven schedules, dependent on the degree of regulation required given the potential environmental impacts associated with that chemical. The system of classification required by the federal IChEMS legislation is illustrated in Figure 1 below.
Figure 1 (Source: DCCEEW1)
The Commonwealth Register facilitates the identification of listed industrial chemicals and provides comprehensive guidance on managing the environmental risks posed by the manufacture, use and disposal of those chemicals by establishing necessary risk management measures for each listed industrial chemical.
As the risk management measures are aimed at addressing environmental risks, the more serious and irreversible those environmental risks are, the higher the degree of risk management intervention required. For example,
Figure 2 below illustrates the increasing risk management measures required as environmental risk increases.
Figure 2 (Source: DCCEEW2)
Several industrial chemicals have already been the subject of scheduling decisions and are listed, along with risk management measures, on the Commonwealth Register. Among the most well-known chemicals currently listed are three PFAS, being PFHxS, PFOS and PFOA. These PFAS are listed on Schedule 7. The PFAS listing instruments are to come into force on 1 July 2025, with the effect of immediately prohibiting the import, export, manufacture, and use of these PFAS, subject to limited exceptions like, for example, research or laboratory use, or where a hazardous waste permit authorises the import or export of the chemical.
table setting out the currently listed industrial chemicals is provided at the end of this article. The Commonwealth Department has not yet released its updated workplan, which will describe the next categories of industrial chemicals to be considered for listing, but has indicated that this is in development and will be released soon.
Importantly, whist federal legislation establishes IChEMS and the Commonwealth Register, and scheduling decisions are made at a federal level, no restrictions or obligations are immediately imposed on any person within the jurisdictions of the States and Territories. Similarly, no State or Territory regulator is empowered to enforce or implement IChEMS. It is therefore necessary for each State and Territory to adopt its own enabling IChEMS legislation. The various Environmental Ministers of the States and Territories agreed to do so, and slowly we are seeing progress being made in rolling out IChEMS. Queensland was the first mover and has already implemented the IChEMS regime by incorporating compliance with the Commonwealth Register as a component of the general environmental duty under the Environmental Protection Act 1994 (Qld).
Following closely behind Queensland, NSW is the second jurisdiction to implement and adopt IChEMS. NSW has done so through the passing of the Environmental Legislation Amendment (Hazardous Chemicals) Act 2024 (Act), which was assented to on 25 March 2024.
The Act implements the national IChEMS framework by incorporating it within the existing Protection of the Environment Operations Act 1997 (POEO Act). The amendments to the POEO Act are predominately found within the new Part 9.3E, which was inserted by operation of the Act. In addition, the Act establishes at Schedule 1 of the POEO Act, new premises based and non-premises based scheduled activities for an “environmentally hazardous activity”. An environmentally hazardous activity includes:
The Act therefore requires that any person engaged in an activity involving an industrial chemical listed on Schedule 6 or 7 of the NSW IChEMS Register must obtain an environment protection licence (EPL).
In addition, the new Part 9.3E of the POEO Act:
Failure to comply with a chemical use notice is an offence, with corporations facing penalties of up to $2,000,000 and $120,000 for each day the offence continues. The offence also attracts special executive liability for a director or other person involved in the management of the corporation,
The Act also repeals the Environmentally Hazardous Chemicals Acts 1985 (NSW) (EHC Act) and the Environmentally Hazardous Chemicals Regulation 2017 by transferring key provisions to the POEO Act – as is evident through the continued operation of CCO’s now under the POEO Act.
Schedule | Industrial Chemical |
Schedule 7 |
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Schedule 6 |
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Schedule 5 |
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Schedule 4 |
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Schedule 3 |
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Schedule 2 |
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Schedule 1 |
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As expected, the Australian Commonwealth Treasury released an exposure draft for the proposed new Australian merger regime on 24 July 2024.
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