Making sense of industrial chemical regulation

IChEMS

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,

• Schedule 1 chemicals are subject to the lowest form of management intervention, with only compliance to a general set of minimum standards for environmental management (MES) being required. A link to the MES is provided at the end of this article.
• Schedule 2-4 chemicals will be subject to the MES and to progressively stricter risk management measures that are appropriate to the risk posed by those chemicals. These risk management measures will not include prohibitions or restrictions on use, manufacture, import, and export.
• Schedule 5 chemicals may, in addition to tailored risk management measures and the MES, be subject to certain prohibitions or restrictions on use.
• Schedule 6 chemicals are subject to prohibitions on the import, export, manufacture, and use except for specified essential uses.
• Schedule 7 chemicals are subject to general prohibitions on the import, export, manufacture, and use.

Figure 2 below illustrates the increasing risk management measures required as environmental risk increases.

Figure 2 (Source: DCCEEW²)

Current listed industrial chemicals

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.

State and Territory adoption

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).

New South Wales

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:

• an activity in Schedule 1 of the POEO Act, which involves the use of a chemical listed in Schedule 6 or Schedule 7 of the NSW IChEMS Register; and
• an activity regulated by a chemical control order (CCO) in relation to a chemical.

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:

• establishes the NSW IChEMS Register, which mirrors the Commonwealth Register. The effect of this is that all federal scheduling decisions listing industrial chemicals on the IChEMS Register will automatically be listed on the NSW IChEMS Register and will apply within NSW. NSW reserves the ability to modify the Commonwealth Register, including by adding, varying, or omitting any matter. Therefore, it is possible for NSW to list industrial chemicals not listed federally, or to not list chemicals that are listed federally. Also, NSW may modify the risk management measures described on the Commonwealth Register so that additional or fewer measures will apply in NSW than in other states or territories.
• creates an obligation on all users and manufacturers of chemicals listed on the NSW IChEMS Register to adhere to the specified risk management measures (i.e., those measures specified in the Commonwealth register, as modified by NSW). Failure to comply with a risk management measure is taken to be a ‘pollution incident’ under the POEO Act. As a result, the EPA will be able to enforce compliance with risk management measures through the existing enforcement mechanisms such as clean-up notices and prevention notices. In addition, users and manufactures will have an obligation to notify relevant authorities about any non-compliance with risk management measures that causes or threaten to cause material harm to the environment.
• creates an obligation on persons not to do anything that is prohibited in the NSW IChEMS Register, unless authorised by an EPL. Contravention of this obligation 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.
• empowers the EPA to publish a chemical use notice. The purpose of a chemical use notice is to enable to the EPA to obtain information regarding the prevalence and use of industrial chemicals in NSW. A chemical use notice may only be made in relation to:
  • a chemical which is listed in the NSW IChEMS register,
  • a chemical for which a chemical control order is in force, or
  • a chemical which, in the EPA’s opinion, has the potential to present a risk of harm to human health or the environment.

  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,

• empowers the EPA to issue chemical control orders prohibiting or regulating various activities in relation to a chemical, including manufacturing, processing, keeping, storing, distributing, transporting, using, selling, disposing, or related activities. A CCO may only be issued where necessary to prevent or minimise an adverse effect on the environment that may result from carrying on the activity in relation to the chemical. Failure to comply with a CCO is an offence, with corporations facing penalties of up to $1,000,000 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.

Industrial Chemicals listed on the Commonwealth Register

Useful links:

The IChEMS Minimum Standards - DCCEEW

IChEMS Online Register - DCCEEW