Chapter 2

The regulation of pesticides and veterinary chemicals –roles and responsibilities of Commonwealth and state departments and agencies

2.1        As part of its inquiry, the committee was required to identify the roles and responsibilities of relevant departments and agencies of Commonwealth, state and territory governments in relation to the regulation of pesticides and veterinary chemicals.

2.2        This chapter provides an outline of the various Commonwealth and state government departments and agencies that play a part in the regulation of pesticides and veterinary chemicals in Australia. The chapter also examines stakeholders' views in relation to the regulatory system.

Intergovernmental agreement – National Registration Scheme for Agricultural and Veterinary Chemicals

2.3        The constitutional responsibility for the regulation of agricultural and veterinary (agvet) chemicals resides with Australia's state and territory governments. However, in 1995, the Commonwealth and the state and territory governments signed an intergovernmental agreement (IGA) to establish a National Registration Scheme for Agricultural and Veterinary Chemicals (NRS).[1] Under the 1995 IGA, the states and the Northern Territory handed powers to the Commonwealth under their legislation for regulating agvet chemicals up to the point of sale. The states and territories retained responsibility for controlling the use of relevant chemicals.

2.4        An updated IGA was signed by the Commonwealth, states and territories in 2013. The 2013 IGA extended the agreement to include the Australian Capital Territory and incorporated further policy principles for the harmonisation of agvet chemical regulations.[2]

2.5        Across the Commonwealth, states and territories, there are a number of government departments and agencies that share responsibility, or have a specific role to play in the regulation of agvet chemicals.

Commonwealth departments and agencies

Australian Pesticides and Veterinary Medicines Authority

2.6        Under the IGA, the Australian Pesticides and Veterinary Medicines Authority (APVMA) is recognised as the independent Commonwealth statutory authority responsible for the registration of agvet chemicals – 'allowing use in Australia'.[3]

2.7        The APVMA was established under the Agricultural and Veterinary Chemicals (Administration) Act 1992 (Administration Act). The Administration Act sets out the role of the APVMA (for undertaking the responsibilities conferred on it by the states and territories) under the NRS. The APVMA's functions and powers are conferred by:

• the Administration Act;
• the Agricultural and Veterinary Chemicals Code Act 1994 (Agvet Code Act); and
• the Agricultural and Veterinary Chemicals Code (Agvet Code).[4]

2.8        The APVMA submitted that its three main functions – and those which are of direct relevance to the decisions made in relation to fenthion – are: registrations of existing products, consideration of applications for permits; and chemical review. [5]

Registration

2.9        It is a requirement that all new agvet chemicals be registered by the APVMA before they can be supplied, distributed or sold anywhere in Australia. Active constituents (the substance/s in an agvet chemical product primarily responsible for its biological or other effects) must also be approved by the APVMA, either before, or at the same time as the primary product is registered.

2.10      In applying for registration, the manufacturer or applicant must demonstrate that, if used according to proposed label instructions, the product will:

• be safe for humans and non-target species;
• not pose unacceptable risks to the environment or to trade with other nations; and
• be effective for the uses described on the label.

2.11      Once  all relevant assessments[6] are completed under s14 of the Agvet Code, the APVMA must only grant an application if it is satisfied that use of the product (in accordance with the label instructions):

• would not be an undue hazard to the safety of people exposed to it during its handling or people using anything containing its residues;
• would not be likely to have an effect that is harmful to human beings;
• would not be likely to have an unintended effect that is harmful to plants, animals or things, or to the environment; and
• would not unduly prejudice trade or commerce between Australia and places outside Australia.

Permits

2.12      Chemicals must be used in accordance with instructions on the label, except where 'off-label' use is allowed under state and territory legislation, or there is a permit in place from the APVMA.

2.13      In most states and territories, registered products must only be used for the purposes specified on the label.[7] The APVMA has the power to consider applications for permits that allow for the legal use of chemicals in ways different to the uses set out on the product label. In certain circumstances, the limited use of an unregistered chemical may also be allowed by permit.

2.14      The types of permits that may be considered by the APVMA are for one of the following five purposes:

• Minor use – applies to situations usually involving low acreage crops, small portions of high acreage crops, or animal species which are not covered by the product label.
• Emergency use – for situations such as outbreaks of exotic pests or diseases.
• Research – allows for chemical products to be used in research trials of varying size for scientific purposes.
• Export – allows for the holder to possess and supply an unregistered chemical product or an unapproved active constituent for export purposes only.
• Miscellaneous – generally issued to allow the supply of a particular batch or batches of registered product where the product does not comply with the product specifications, but may be issued for any purpose that would nullify certain offences under sections of the Agvet Code.

Chemical review

2.15      The APVMA advised that the Chemical Review Program was established in the 1990's as a 'post-market mechanism to re-evaluate "older" pesticide products that had been authorised under the previous state-based registration arrangements'.[8]

2.16      Under the Agvet Code, the APVMA has the power to conduct reviews of registered chemicals. These powers include the authority to reconsider the registration of products and approvals of active ingredients and labels, and to require registrants to provide information.

2.17      The APVMA noted that a review may be initiated when new research or evidence has raised concerns about the use or safety of a particular chemical or product (when used according to label instructions). Reviews may focus on one or more areas of concern, including environmental safety, worker safety, public health, residues and trade, or (less commonly), product efficacy.

2.18      The risk assessment process conducted in reviewing a chemical product follows the same principles and legislative criteria as that for registration of all chemical products.[9] Part of the scientific process involves the setting of human health and/or environmental standards for safe levels of exposure to the chemical. Use of the chemical can only proceed if the level of exposure is below these standards, to ensure – with a high degree of certainty – the safety of all members of the public, workers and the environment.

2.19      The APVMA indicated that the length of time taken to conduct a review varies on a case-by-case basis. The time taken can range from a few months for a basic label review, through to many years for a more technically-complex review. Some of the more complex reviews may involve the reconsideration of several agvet chemical products with a number of use patterns and involve multiple assessments.

2.20      The committee was told that, if the APVMA has sufficient reason to be concerned about the risks of a particular product, 'it may (and often does) place restrictions on or suspend the use of product labels in question while the review is conducted'.[10]

2.21      The APVMA noted that the review process 'generally involves extensive consultation with the public and industry'[11] and that submissions from growers, householders, local government authorities, pest controllers and other chemical users help construct a picture of how the chemical is currently used. The APVMA also uses the consultation period to obtain supplementary information to assist with refining its risk assessment.

2.22      The public comment period, immediately prior to the APVMA making its final decision (about the future use of chemical products), provides an additional opportunity for individuals and organisations to provide feedback.

2.23      Under Section 34 of the Agvet Code Act, on completion of the review process, the APVMA can only allow continued use of a registered product (or an active constituent approval) if satisfied that it:

• would not be an undue hazard to the safety of people exposed to it during its handling or people using anything containing its residues;
• would not be likely to have an effect that is harmful to human beings;
• would not be likely to have an unintended effect that is harmful to plants, animals or things or to the environment;
• would not unduly prejudice trade or commerce between Australia and places outside Australia; and
• would be effective according to criteria determined by the APVMA.

2.24      Depending on a review's findings, chemicals (and the products containing them) might be:

• confirmed as safe and appropriate for registered use;
• restricted in access and use;
• reformulated;
• required to carry amended labels with new directions for use and/or safety directions; or
• suspended, cancelled or withdrawn from the market.

2.25      In addition to establishing Maximum Residue Levels (in conjunction with Food Standards Australia and New Zealand (FSANZ)), the APVMA also has the power to approve withholding periods (WHP)[12] and provide users with the information they require to ensure that residues in their treated produce will not exceed the Maximum Residue Limit (MRL).[13]

2.26      Importantly, the APVMA's submission stressed that, as the regulator, it does not get involved with 'activities relating to the identification and meeting of market opportunities, research or data generation, and industry adjustment activities'.[14]

Commonwealth Department of Agriculture

2.27      The Department of Agriculture (DA) described its principal role in relation to agvet chemicals as the general oversight of the Government's agvet chemical policy. DA provides advice to the Minister for Agriculture on the regulation of agvet chemicals and on strategic aspects of chemical management in Australia. DA also implements government policy by developing amendments to the agvet chemical legislation and working with the states and territories as part of the NRS.[15]

2.28      DA noted that it will continue to be involved in the oversight of recent changes to the APVMA's legislation – which was amended in response to concerns about the process and the timeframes for reviews. The committee was told that from 1 July 2014, the department will oversee the following changes to the way in which reviews are conducted, including:

• streamlined reviews which clearly set out the matters to be addressed;
• the publication of a workplan for proposed reviews;
• improved transparency and stakeholder involvement (by providing opportunities for stakeholder submissions at defined points in the process);
• the release of draft review decisions for stakeholder input;
• the completion of reviews within statutory timeframes; and
• the provision of longer data protection periods to encourage stakeholders to supply data (to assist reviews).[16]

2.29      Under the Australian Constitution and the Quarantine Act 1908, the Commonwealth is responsible for matters relating to the Australian border, including development and enforcement of quarantine measures for imported goods and for activities undertaken on Commonwealth lands.

2.30      DA indicated that, as part of its role – and on behalf of the Commonwealth – the department negotiates biosecurity conditions and operational protocols (for international market access) for agricultural commodities. It was noted that negotiations are conducted with a view to maximising trade, while at the same time meeting the requirements of importing countries. DA monitors changes in production systems and any potential quarantine concerns which could potentially threaten market access and works to minimise or prevent these impacts. In addition, the department is responsible for the monitoring of Australia's pest and disease status, and ensuring it meets our international obligations.

2.31      DA noted that, under the Imported Food Inspection Scheme, it undertakes testing for fenthion in imported commodities. As part of this testing, the department indicated that there have been no detections of fenthion (above the national standards prescribed in the Australia New Zealand Food Standards Code) in the last five years.

Minister for Agriculture

2.32      As noted previously, the APVMA is an independent statutory authority. The Minister for Agriculture's powers to direct the APVMA are set out in Sections 9A and 10 of the Agricultural and Veterinary Chemicals (Administration Act) 1992. Under this legislation, the Minister can only give a direction to ensure that the APVMA is acting in accordance with policies determined under agreements between the Commonwealth and the state and territory governments.

2.33      Importantly, the APVMA's legislation does not provide for the Minister for Agriculture to play a role in the decision making process of the APVMA with respect to the registration or review of chemicals. The committee was told that:

The Minister cannot give a direction that would have the effect of requiring the APVMA to act in a manner inconsistent with its obligation to manage the risks of chemical use to human, animal and environmental safety.[17]

2.34      Specifically, DA indicated that:

... there is currently no policy under the IGA about agvet chemicals regulation that could allow the Minister to give a direction about the APVMA's specific decisions on fenthion.[18]

Food Standards Australia New Zealand

2.35      Food Standards Australia New Zealand (FSANZ) is an independent statutory authority established under the Food Standards Australia New Zealand Act 1991. In setting food standards, FSANZ adheres to the policy guidelines developed by the Coalition of Australian Governments (COAG) Legislative and Governance Forum on Food Regulation (the Forum).[19]

2.36      The committee was told that the primary function of FSANZ is to develop food standards for consideration by the Forum. In addition to its responsibility for developing food standards, FSANZ's legislative functions require it to:

• coordinate and report on food recall activities on behalf of state and territory jurisdictions;
• provide risk assessment advice to the Department of Agriculture where food imports present a medium or high food safety risk; and
• coordinate jurisdictional activities and facilitate common approaches in responding to food incidents that span state borders.[20]

2.37      Significantly, FSANZ is responsible for the development of an Australia-only standard – Standard 1.4.2: Maximum Residue Limits – that lists MRLs for residues of agricultural and veterinary chemicals permitted in food sold. Standard 1.4.2 provides that food must not have 'any detectable residue of a chemical that is not mentioned in the Standard or a chemical for which there is no permission for that food'.[21]

2.38      The committee was told that the APVMA and FSANZ both play a role in establishing MRLs to ensure that human health standards are not exceeded.

2.39      It was stressed that the setting of MRLs is an essential part of the scientific process and that they are of particular importance in relation to the legal supply of domestic produce and international trade. It was noted that, in setting an MRL for a chemical, it is very important that consumers' exposure to that chemical (and its defined breakdown products) through residues in the diet, is below the public health standard.[22]

2.40      FSANZ indicated that the organisation does not play a role in animal health risk assessment or standards, nor does it have powers in relation to the enforcement of standards in the Australia New Zealand Food Standards Code (the Code).[23] It does, however, have the power to vary the limits in the Code.[24]

2.41      It was noted that when FSANZ proposes to vary the Code, it is required to conduct at least one round of public consultation, and its decisions are subject to consideration by the Forum. Variations to the Code made under this procedure are published after consideration by the Forum.[25]

2.42      It was noted that certain MRLs in the Code may also be varied by the APVMA.[26] In fact, FSANZ indicated that the majority of variations to Standard 1.4.2 now occur as a result of an action taken by the APVMA. FSANZ varies the Standard occasionally in response to applications made for specific changes or as a proposal prepared by FSANZ in response to representations made to FSANZ, primarily by importers of goods or foreign governments or organisations.[27]

Department of Health

2.43      An essential part of the risk assessment process undertaken by the APVMA is the setting of human health and/or environmental standards for safe levels of exposure to the chemical being reviewed.

2.44      The APVMA use the Department of Health's advice on human health standards when assessing the dietary risk of pesticides applied to food crops, like fenthion, to enable it to meet the legislative requirements of the Agvet Code.[28]

2.45      The Office of Chemical Safety (OCS), within the Department of Health, is responsible for setting health standards for determining dietary exposure through pesticide residues in food. The OCS undertakes a scientific assessment of all studies conducted on a chemical (and its adverse health effects). The studies consider a range of adverse effects, including the potential of the chemical to cause effects following a single exposure or repeated exposures (over long periods of time), the potential of the chemical to affect the brain, damage genetic material, cause cancer, disrupt reproduction, cause birth defects, damage the nervous system or damage the immune system.[29]

2.46      Based on this assessment, the OCS identifies the most sensitive, relevant adverse effect, which then forms the basis of the public health standard. A pivotal study is chosen that demonstrates a clear threshold of dietary exposure for the adverse effect, below which the effect does not occur.[30] The committee was told that the health standards are 'based on a standard international approach to risk assessment, using methodology consistent with international best practice'.[31]

2.47      The APVMA uses the public health standards set by the OCS to complete its dietary risk assessment for a particular chemical. This dietary risk assessment includes a consideration of the concentration of the chemical in food (either analysed concentration or the MRL), how much of certain foods Australian consumers eat, and consumption patterns by different age groups (including children).[32]

Department of the Environment

2.48      The Department of the Environment provides advice and environmental risk assessments,[33] to Australian chemical regulators (including the APVMA). The Department of Environment's advice and environmental risk assessments are considered by the APVMA when making regulatory decisions about agvet chemicals.[34]

State and territory departments and agencies

2.49      As indicated previously, the states and territories are directly responsible for regulating the use of chemicals after sale – referred to as control-of-use. The states and territories control-of-use regimes rely on permits granted by the APVMA and the directions for use approved by the APVMA.

2.50      The states and territories are also responsible for:

• ensuring that agvet chemicals are used legally (and according to the specifications set by the APVMA);
• training requirements for licensing and use of higher risk products;
• licensing of professional operators;
• monitoring and auditing of licence compliance and chemical residues in produce and the environment;
• investigations and resulting enforcement/compliance activities; and
• education and extension programs.[35]

Issues raised by stakeholders

Complexity of regulatory system

2.51      The committee received substantial evidence from individual growers, industry organisations and peak bodies which raised specific concerns about the complexity of Australia's regulation system in relation to agvet chemicals. Stakeholders also raised concerns about what they described as a lack of clarity and clear direction in the regulation of agvet chemicals – particularly given the large number of organisations and agencies involved in the process.[36]

2.52      Mr Rod Thomson, a stone fruit grower from the north coast of NSW, told the committee that he has found the whole fenthion issue has been 'one of complete confusion'. Mr Thomson's comments echoed those made by a number of growers, when he argued that, when faced with the prospect of the removal of fenthion 'from the arsenal of control measures available to growers':[37]

No clear direction or assistance was available to growers from any source. It has been left to individual food industries to try to develop their own alternative control measures as best they can. If ever there was a case for a co-ordinated national approach to a wide ranging problem, surely this is one.[38]

2.53      Mr Thomson also told the committee that:

... from a grower's position, all I can see is a complete lack of coordination between all of the relevant authorities and stakeholders on this issue which potentially could have a devastating effect on the fresh fruit and vegetables supplied to Australian households and exporters. At times the inability to get direction from any of the participating stakeholders was staggering.[39]

2.54      Summerfruit Australia suggested that in relation to agvet chemicals 'there are a whole raft of instrumentalities that for much of the time are not in unison with each other'.[40] The industry group also argued that:

The Australian Horticultural Industry is continually criticised by Government for being disjointed and lacking a singular approach to issues. Yet all parties fail to see how disjointed the processes are that are required to support a strong, viable and profitable primary production sector. The regulation of pesticides and veterinary chemicals would be one of the more disjointed and overregulated sector[s] within primary production.[41]

2.55      Industry peak body Growcom also described Australia's regulatory system as too complicated and added that the system is also too expensive; and, as a result:

... chemical companies have no incentive to invest in new chemistry for Australian conditions. It costs as much to register a product in Australia as it does in the US and our market is one tenth of the size. There is clear market failure that is not being addressed by the current regulation process and the minor use system. For example, there has not been a single new chemical registered for use in pineapples in 20 years despite significant numbers of chemicals being reviewed and removed from use.[42]

2.56      Growcom went on to argue that increased investment in a broken system will not provide a solution, nor will it deliver the best return on that investment. The peak body was also critical of a recent review of the APVMA fee structure which recommended a 100 per cent cost recovery for permits – a move it suggested was likely to further entrench market failure.[43]

Lack of coordination between government and industry

2.57      Peak industry body AUSVEG argued that, in relation to the regulation of agvet chemicals, there has been a significant disconnect both between – and within – the various levels of government. It was argued that this situation creates problems at both  policy and operational levels:

From a policy perspective, this disconnect has been highlighted through the relatively poor track record of the States and Territories in reaching agreement on various Agvet chemical-related COAG reforms.[44]

2.58      In providing evidence to the committee in Perth, representatives of Fruit West were also critical of the lack of coordination and cooperation between Commonwealth, state and industry organisations:

It has been a matter of some frustration to know that there has been a review in process for 15-odd years and trying to get any traction from government, anyone in industry or anyone in between up until the last two years. Until two years ago growers would tell me that the government could not withdraw a chemical without replacing it with another one, and state agriculture ministers would tell me that it was not their problem.[45]

Committee comment

2.59      The committee acknowledges the concerns raised by stakeholders in relation to the complexity of the regulation process for agvet chemicals.

2.60      Throughout its inquiry, it has become clear to the committee that it can be both difficult and frustrating for stakeholders to navigate the various layers of Commonwealth and state bureaucracy and the various levels of industry representation.

2.61      The committee suggests that this confusion is likely exacerbated through the widely-held perception that, as the agency with primary agency responsibility for the regulation of agvet chemicals, the APVMA should also be the agency with primary responsibility for communicating with growers. As is demonstrated by the regulatory summary earlier in this chapter, not all responsibilities in this area lay with the APVMA.

2.62      The committee acknowledges that the APVMA is in the difficult position of attempting to perform its primary function of 'regulator', whilst attempting to communicate to industry that it does not have the legislative power to become involved in activities such as identifying market opportunities, conducting specific research projects, generating data or identifying alternatives to restricted chemicals.

2.63      The committee cannot offer an immediate or guaranteed solution to the regulatory complexity or the confusion over the role of the APVMA. However, it does recommend that renewed effort be made to communicate to stakeholders the respective roles and responsibilities of each department and agency, in a format and using language that is accessible to them. All relevant departments and agencies, including those at state and territory level, should be encouraged to cooperate in achieving this objective.

2.64      The committee notes the regulatory complexity and confusion over the role of the APVMA. The committee considers that a collaborative effort between relevant Commonwealth, state and territory agencies to clearly and simply communicate their respective roles in relation to regulating agricultural chemicals and veterinary medicines would do much to alleviate confusion, and recommends that a concerted effort be made to address this issue. The committee also recommends that Commonwealth, state and territory governments review the complex arrangements and relevant legislation and regulations, with the aim of simplifying and streamlining, but not weakening, the regulation of agricultural chemicals, and providing greater certainty and transparency to stakeholders. In the committee's view, the appropriate body to take the lead in this process is the Commonwealth Department of Agriculture. 

Recommendation 1

2.65      The committee recommends that all relevant Commonwealth, state and territory agencies be encouraged to cooperate to better convey their respective roles and responsibilities in relation to the regulation of agvet chemicals to stakeholders.

Recommendation 2

2.66      The committee recommends that all relevant Commonwealth, state and territory agencies be encouraged to undertake a collaborative communications program which clearly and simply communicates their respective roles and responsibilities in relation to the regulation of agvet chemicals to stakeholders.

Recommendation 3

2.67      The committee recommends that the Commonwealth, state and territory governments review arrangements, legislation and regulations relating to agvet chemicals, with the aim of simplifying and streamlining, but not weakening, the regulation of agvet chemicals, and providing greater certainty and transparency to stakeholders.

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