BILLS DIGEST NO. 25, 2018–19              17 September 2018

Tobacco Plain Packaging Amendment Bill 2018

Kaushik Ramesh
Law and Bills Digest Section

Dr Matthew Thomas
Social Policy Section

Date introduced:  15 August 2018

House:  House of Representatives

Portfolio:  Health

Commencement: The day after Royal Assent.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at September 2018.

Purpose of the Bill

The purpose of the Tobacco Plain Packaging Amendment Bill 2018 (the Bill) is to amend the Tobacco Plain Packaging Act 2011 to expand the categories of persons that can be appointed as authorised officers empowered to undertake compliance activities under that Act. Specifically, the Bill will allow the following persons to be appointed as authorised persons:

•       people who work for the Commonwealth or a Commonwealth entity, but who are not engaged under the Public Service Act 1999 (PS Act)

•       people who work for states, territories or local governing bodies established under state or territory law, who have relevant responsibilities and

•       members of state or territory police forces.

The Bill stipulates that the last two categories of person require agreement from the relevant state or territory concerned before appointment.

Background

Tobacco plain packaging

After gaining office in 2007, the Rudd Government established a National Preventative Health Taskforce. This Taskforce was charged with developing a strategy and making recommendations for tackling the three biggest preventative health issues facing the Australian community, namely obesity, tobacco consumption and alcohol consumption.[1]

On 30 June 2009, the Taskforce released the National Preventative Health Strategy.[2] The strategy outlined a strategic vision for Australia to be the healthiest country by 2020, with one of the targets set being a reduction in the prevalence of daily smoking amongst adult Australians from 17.4 per cent (in 2007) to ten per cent over this period (in line with national preventative health targets contained in the Council of Australian Governments (COAG) National Partnership Agreement on Preventive Health).[3]

One of the means recommended to help achieve this target was the elimination of the promotion of tobacco products through the design of packaging.[4] By regulating the packaging of tobacco products it was envisaged that it would be possible to reduce the appeal of tobacco products to consumers, increase the effectiveness of health warnings on the packages, and reduce the ability of the packaging to mislead consumers about the harmful effects of smoking or using tobacco products.

On 29 April 2010, then Prime Minister, Kevin Rudd announced the introduction of a series of measures calculated to reduce smoking and its harmful effects, the most significant of which was the plain packaging of tobacco products by 1 July 2012.[5]

On 6 July 2011 the Tobacco Plain Packaging Bill 2011 was introduced to the House of Representatives.[6] This Bill sought to prohibit the use of all tobacco logos, brand imagery, colours and promotional text on the retail packaging of tobacco products. Under the proposed legislation the retail packaging of tobacco products was to be a drab olive colour, with the exception of the graphic health warnings which were to be updated and expanded.

The plain packaging legislation also established:

•       general offences and civil penalty provisions for non-compliant retail packaging and tobacco products[7]

•       powers to investigate contraventions of the legislation (including the appointment of authorised officers)[8] and

•       provisions for enforcing compliance.[9]

On 1 December 2011 the Bills received Royal Assent, and, in a world-first reform, from 1 December 2012, all tobacco products sold, offered for sale or otherwise supplied in Australia have been required to meet the above prerequisites.[10]

Plain packaging impacts

The objects of the Tobacco Plain Packaging Act are to, among other things, improve public health by discouraging people from taking up smoking, or using tobacco products; encourage people to give up smoking, and to stop using tobacco products; discourage people who have given up smoking, or who have stopped using tobacco products from relapsing; and reduce people’s exposure to smoke from tobacco products.[11]

While the Department of Health notes that ‘the full effect of plain packaging is expected to be realised over time’, it goes on to state that ‘early available evidence indicates that the measure is beginning to achieve its public health objectives and is expected to continue to do so in the future’.[12]

Based on National Drug Strategy Household Survey data and Australian National Account figures (among others) rates of tobacco consumption have been generally declining in Australia for some time.[13] Daily smoking has been falling (especially amongst younger age groups), fewer people have been taking up smoking, and, while consumer expenditure on tobacco products has increased over the last few quarters, it is nevertheless on a long-term downward trend. While the decline in daily smoking slowed between the 2013 and 2016 National Drug Strategy Household Surveys, the number of people choosing never to take up smoking has increased substantially, to the highest levels since the commencement of the National Drug Strategy Household Survey in 1991.[14]

Since the introduction of the tobacco plain packaging measure in Australia studies have confirmed the expected impacts of the measure based on surveys of responses to simulated plain packs.[15]

While these studies suggest that plain packaging may be contributing to a reduction in the prevalence and incidence of smoking (with a number of existing smokers being more likely to give up the habit and fewer people likely to take up smoking) none of them attempts to quantify the impact of the measure. As noted above, a range of other tobacco control measures were introduced at around the same time as plain packaging and this makes such an assessment very complex.

In 2016 as part of a post-implementation review of the measure the Department of Health engaged independent researcher, Dr Tasneem Chipty to conduct an econometric analysis of smoking prevalence data to determine whether or not plain packaging had had a discernible impact on the prevalence of smoking.

After controlling for a range of variables including excise tax increases since 2010 and socio-demographic factors, Dr Chipty found that the combination of plain packaging and enlarged graphic health warnings had resulted in a reduction in smoking prevalence.[16] Dr Chipty estimated ‘a statistically significant decline in smoking prevalence of 0.55 percentage points over the post-implementation period, relative to what the prevalence would have been without the packaging changes’.[17] This equates to 108,228 fewer smokers over the 34 month post-implementation period from December 2012 to September 2015.[18]

Further, Dr Chipty observed that ‘because plain packaging is intended to deter smoking initiation, promote cessation, and deter relapse, the benefits of the packaging changes will likely grow over time’.[19]

Enforcement

The Department of Health is responsible for tobacco plain packaging legislation in Australia.[20] The Department takes a risk based approach towards assessing a breach of the plain packaging framework in terms of how it affects public health as well as the reputation of the broader regime.[21] Currently, the Department of Health undertakes this enforcement role along with the National Measurement Institute (NMI), which is a division within the Department of Industry, Innovation and Science.[22] The roles of the Department of Health and the NMI with regards to the enforcement of tobacco plain packaging legislation are set out in the May 2018 Tobacco Plain Packaging Enforcement Policy (the Enforcement Policy):

The Tobacco Plain Packaging Enforcement Committee (Enforcement Committee) has been established, comprising representatives from the Department and the National Measurement Institute (NMI).

The NMI, through its authorised officers, undertake compliance and enforcement activities across Australia on the Department’s behalf and report potential contraventions to the Enforcement Committee.

The Enforcement Committee considers NMI’s field visit reports, and decide what actions, if any, should be taken in relation to potential contraventions of the TPP [tobacco plain packaging] legislation. The Enforcement Committee may recommend compliance action through use of administrative mechanisms … or recommend to the Department that consideration be given to the commencement of civil or criminal proceedings … Where the Enforcement Committee considers that more serious action should be taken, the Committee will recommend that action to the appropriate decision maker.

Alternatively, the Enforcement Committee may consider that education already provided by NMI’s authorised officers is sufficient, and recommend closure of the matter. Where further education and communication is necessary to achieve compliance a written warning may be issued to the entity.[23]

The Enforcement Policy’s underlying principles are stated to be proportionality, transparency, consistency, confidentiality and timeliness.[24] A range of enforcement options are set out in the Enforcement Policy depending on the entity’s attitude to compliance:

Table 1: Compliance and Enforcement Matrix

Entity’s Attitude to Compliance

Department’s Compliance Approach

Tier 1

Perceived decision to not comply

·    Ambivalence to tobacco plain packaging legislation

·    Aware of requirements, but insufficient change to non-compliant behaviour

Enforcement Options

·    Civil Prosecution

·    Criminal Prosecution

·    Infringement Notice

Tier 2

Reluctant but willing to comply

·    Approach to compliance flouts the legislation

·    Long term interests in industry - necessary to achieve compliance

Return to Compliance & Deter

·    Warning letter

·    Infringement Notice

·    Negotiated Compliance

Tier 3

Willing to be compliant

·    Unaware of tobacco plain packaging legislation

·    Belief that compliant, but non-compliance detected

Compliance Options

·    Education

·    Warning Letter

·    Negotiated Compliance

Department of Health, ‘Tobacco plain packaging enforcement policy’, [DoH, Canberra], May 2018, p. 6.

The Enforcement Policy also notes that some breaches of plain packaging laws may require referral to another agency:

The Department notes that some complaints are multi-jurisdictional and that at times, related offences are more appropriately dealt with by another Commonwealth or state /territory agency. Policy, resourcing, and complaints related to other cases may make it appropriate for another agency to take the lead where the situation involves a breach of more than one regulatory scheme (e.g. as with the import of illicit tobacco products, and appropriate involvement of law enforcement agencies).

Cases may be referred to other agencies without notice to a person or entity. Cases investigated by the Department may continue to be investigated in conjunction with another agency, or matters may be referred in their entirety.[25]

The Bill does not change any policy elements with regards to plain packaging, but does make amendments to the enforcement framework. This is discussed in detail in the ‘Key issues and provisions’ section below.

Committee consideration

Senate Standing Committee for Selection of Bills

The Senate Standing Committee for Selection of Bills recommended that the Bill not be referred to a committee.[26]

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills had no comment on the Bill.[27]

Position of major interest groups

State and territory agencies were consulted on the Bill; the Explanatory Memorandum notes that no agencies opposed the amendments.[28] The Explanatory Memorandum notes that there were some concerns regarding resourcing from these agencies, however these concerns seem to be addressed by item 3 of Schedule 1 of the Bill (see ‘Key issues and provisions’ section below). The Explanatory Memorandum noted the following with regards to the consultation process:

A five-month consultation process on the proposed amendment was undertaken. Information was provided on the proposed amendment and comments were sought from each relevant state and territory health department, state and territory police and jurisdictional local government associations. At the conclusion of consultation, no agencies opposed the amendment. Some agencies expressed initial concern in relation to the potential for their officers to be appointed as authorised officers and how this may affect their resourcing or their strategic priorities. All agencies were assured that the Bill imposes no obligation. Any appointment would only be proposed if there was a need for such an arrangement and would be subject to there being a formal agreement in place.[29]

Financial implications

The Explanatory Memorandum notes that it is expected that the Bill will not result in any financial impact beyond current costs associated with the tobacco plain packaging framework.[30]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[31]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights found that the Bill did not raise human rights concerns.[32]

Key issues and provisions

Expansion of authorised persons

Section 81 of the Tobacco Plain Packaging Act allows the Secretary of the Department of Health to appoint an authorised officer for the purposes of that Act if the Secretary is satisfied that that person has suitable qualifications, training or experience (subsection 81(2)). Under subsection 81(1), a person that may be appointed as an authorised officer by the Secretary is restricted to:

•       a person appointed or engaged under the PS Act or

•       a member or special member of the Australian Federal Police.

Chapter 4 of the Tobacco Plain Packaging Act confers a range of powers on authorised officers to investigate contraventions of that Act. These powers include the following:

•       an authorised officer may enter premises if there are reasonable grounds for suspecting that there may be material on the premises related to the commission of an offence or the contravention of a civil penalty provision under the Tobacco Plain Packaging Act (entry is with the consent of the occupier of the premises or under a warrant)[33]

•       an authorised officer who enters premises may exercise search powers; the authorised officer may be assisted by other persons if that assistance is necessary and reasonable[34] and

•       an authorised officer can require information or documents to be produced.[35]

For example, section 31 of the Tobacco Plain Packaging Act provides for a fault-based offence, a strict liability offence and a civil penalty provision if a person sells a tobacco product, offers a tobacco product for sale or otherwise supplies a tobacco product that is packaged for retail sale, and the retail packaging does not comply with plain packaging requirements. Therefore if an authorised person has reasonable grounds for suspecting that there is material on premises related to the commission of such an offence, then that authorised person can enter those premises by consent or with a warrant.

As per section 100 of the Tobacco Plain Packaging Act, authorised officers can also give a person an infringement notice if they have reasonable grounds to believe that the person has contravened an offence of strict liability under Chapter 3 of that Act. For example, subsection 31(4) provides a strict liability offence that covers the circumstances set out above, in relation to which an authorised officer may issue an infringement notice.

The Enforcement Policy, discussed in the ‘Background’ section above, has further information around the role of an authorised officer under the plain packaging framework. The Enforcement Policy notes in particular that authorised officers from the NMI undertake field visits and conduct compliance activities.[36] As noted above, these NMI officers must be employed under the PS Act. The Bill effectively expands the classes of persons that can be appointed as authorised officers under the Tobacco Plain Packaging Act.

Persons engaged by the Commonwealth

Item 1 of Schedule 1 of the Bill inserts proposed paragraph 81(1)(aa) into the Tobacco Plain Packaging Act, which expands the categories of authorised persons that can be appointed by the Secretary to include persons appointed or engaged by the Commonwealth or by a Commonwealth entity (within the meaning of the Public Governance, Performance and Accountability Act 2013) other than those employed under the PS Act. The amendment effectively means that people working for the Commonwealth, or Commonwealth bodies, can be authorised officers without having to necessarily be Australian Public Service (APS) employees. For example, the amendment means that (non-public servant) contractors working for the NMI (or other Commonwealth agencies) could be appointed as authorised officers under the Tobacco Plain Packaging Act.

The Explanatory Memorandum notes that the reason for this amendment is to allow for changes to the NMI’s structure and to provide greater flexibility:

This clause is primarily to respond to potential organisational and administrative changes which may occur in the future, by ensuring the current agency [the NMI] which undertakes compliance and enforcement activities on behalf of the Department of Health will be able to continue to provide these services if it undergoes organisational and administrative changes. This clause will also provide more flexible arrangements to respond to potential non-compliance with the Act in the future.[37]

State and territory officers

Item 2 of Schedule 1 inserts proposed paragraphs 81(1)(c) and 81(1)(d) into the Tobacco Plain Packaging Act. These paragraphs allow the Secretary to appoint the following persons as authorised officers:

•       an appointee or employee of a state or territory, or a local government body established by a state or territory, who has responsibilities in relation to health matters or in relation to compliance and enforcement in tobacco control matters and

•       a member of the police force or service of a state or territory.

Such an amendment may better reflect the multi-jurisdiction approach envisaged in the Enforcement Policy, discussed in the ‘Background’ section above. In addition, the Explanatory Memorandum notes the specific policy rationale for this amendment, which centres on greater flexibility:

The inclusion of relevant state and territory health or police officers and local government officers would provide flexibility and cooperation to respond to non-compliance with the Act should it be needed and agreed. For example, relevant state and/or territory health officers, if consent is given by their jurisdiction, may be appointed to respond to localised areas of non-compliance to assist with inspections and enforcement activity as appropriate. Potential breaches of the Act in remote areas could be actioned in a more efficient way as it may be possible to use someone already in or close to the local area.[38]

As discussed above, the Tobacco Plain Packaging Act requires that the Secretary must still be satisfied that any appointee has suitable qualifications, training or experience. This is noted in the Explanatory Memorandum as a ‘safeguard’ of the framework, despite this broadening of persons that can be appointed.[39]

In addition, item 3 of Schedule 1 inserts proposed subsection 81(2A), which allows the categories of persons outlined in item 2 to only be appointed with the agreement of the state and territory concerned. This amendment has likely been included in the Bill to respond to concerns from the states and territories (see discussion in the ‘Position of major interest groups’ section above).

Concluding comments

The Bill is related to enforcement of the tobacco plain packaging regime and widens the range of persons that can be appointed as authorised persons for the purposes of compliance and enforcement activities under the regime. The Bill does not make any substantive policy changes to the tobacco plain packaging framework.

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[1].              National Preventative Health Taskforce, Australia: the healthiest country by 2020—national preventative health strategy – the roadmap for action, [National Preventative Health Taskforce, Canberra], 30 June 2009, p. 287.

[2].              Ibid.

[3].              Ibid., p. 36.

[4].              Ibid., pp. 181–2.

[5].              K Rudd (Prime Minister), Anti-smoking action, media release, 29 April 2010.

[6].              For more information on the Bill, see: M Thomas, Tobacco Plain Packaging Bill 2011, Bills digest, 35, 2011–12, Parliamentary Library, Canberra, 24 August 2011. The Trade Marks Amendment (Tobacco Plain Packaging) Bill 2011 was introduced on the same day. For details on this Bill see M Neilsen, Trade Marks Amendment (Tobacco Plain Packaging) Bill 2011, Bills digest, 36, 2011–12, Parliamentary Library, Canberra, 24 August 2011.

[7].              Chapter 3 of the Tobacco Plain Packaging Act 2011.

[8].              Ibid., Chapter 4.

[9].              Ibid., Chapter 5.

[10].              Tobacco Plain Packaging Act 2011; for an overview of Australia’s tobacco plain packaging measure, see M Scollo, B Freeman and E Greenhalgh, ‘Packaging as promotion: evidence for and effects of plain packaging’ in M Scollo and M Winstanley (eds), Tobacco in Australia: facts and issues, third edn, Cancer Council Victoria, 2017.

[11].              Section 3 of the Tobacco Plain Packaging Act 2011.

[12].              Department of Health (DoH), ‘Evaluation of tobacco plain packaging in Australia’, DoH website.

[13].              Australian Institute of Health and Welfare (AIHW), National drug strategy household survey 2016: detailed findings, cat. no. PHE 214, AIHW, Canberra, 2017; Australian Bureau of Statistics (ABS), Australian national accounts: national income, expenditure and product, cat. no. 5206.0, ABS, Canberra, March 2018.

[14].              Australian Institute of Health and Welfare, op. cit., p. 21.

[15].              ‘Tobacco control: implementation and evaluation of the Australian tobacco plain packaging policy’, British Medical Journal, 24 (suppl. 2), April 2015.

[16].              T Chipty, Study of the impact of the tobacco plain packaging measure on smoking prevalence in Australia, [study commissioned by the Australian Government, Department of Health], 24 January 2016.

[17].              Ibid., p. 3.

[18].              Ibid., p. 39.

[19].              Ibid., p. 3.

[20].              Department of Health (DoH), Tobacco plain packaging enforcement policy, [DoH, Canberra], May 2018.

[21].              Ibid., p. 8.

[22].              Department of Industry, Innovation and Science, National Measurement Institute website.

[23].              DoH, ‘Tobacco plain packaging enforcement policy’, op. cit., p. 8.

[24].              Ibid., pp. 5–6.

[25].              Ibid., p. 13.

[26].              Senate Standing Committee for Selection of Bills, Report, 9, 2018, The Senate, 23 August 2018, pp. 3–4.

[27].              Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 9, 2018, The Senate, 22 August 2018, p. 3.

[28].              Explanatory Memorandum, Tobacco Plain Packaging Amendment Bill 2018, p. 2.

[29].              Ibid.

[30].              Ibid.

[31].              The Statement of Compatibility with Human Rights can be found at page 3 of the Explanatory Memorandum to the Bill.

[32].              Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, 8, 2018, 21 August 2018, p. 36.

[33].              Section 52 of the Tobacco Plain Packaging Act 2011.

[34].              Section 51 of the Tobacco Plain Packaging Act 2011.

[35].              Section 80 of the Tobacco Plain Packaging Act 2011.

[36].              Department of Health, ‘Tobacco plain packaging enforcement policy’, op. cit., p. 8.

[37].              Explanatory Memorandum, Tobacco Plain Packaging Amendment Bill 2018, p. 5.

[38].              Ibid., pp. 1–2.

[39].              Ibid., pp. 5–6.