1. Introduction

1.1 Purpose of the CRIS

This Cost Recovery Implementation Statement (CRIS) provides information on how the Australian Industrial Chemicals Introduction Scheme (AICIS) implements cost recovery charging for its regulatory activities. The purpose of this document is to demonstrate how the regulatory charges for AICIS have been developed in compliance with the Australian Government Charging Framework (AGCF) and Australian Government Cost Recovery Policy (AGCRP) and to clearly outline the regulatory charges to be applied from 1 September 2024. It reports actual financial and non-financial performance information for regulatory charging and contains financial and demand forecasts for Financial Years (FY) 2024-25 through to 2027-28. The November Update reports the actual financial and non-financial results for 2023-24 with variance commentary.

1.2 AICIS’s role and functions

The Industrial Chemicals Act 2019 establishes AICIS as the regulatory Scheme for the importation and manufacture (introduction) of industrial chemicals in Australia.  The Scheme is administered by the Executive Director supported by staff within the Australian Government Department of Health and Aged Care. The Department of Climate Change, Energy, Environment and Water (DCCEEW) undertakes the environmental component of AICIS assessments and evaluations under a service level agreement with AICIS. 

The information from AICIS assessments and evaluations is made available to state and territory and other Commonwealth agencies to assist in regulating the use, release and disposal of industrial chemicals and to support the wide range of chemicals management legislation for the protection of human health and the environment.

Key AICIS regulatory activities are summarised below and described in more detail in Section 3: 

• Scientific assessment and evaluation of industrial chemicals;
• Maintain the Australian Inventory of Industrial Chemicals
• Provide information and recommendations about the risks and uses of industrial chemicals 
• Fit for purpose regulation; 
• Meet obligations under international agreements for import and export of restricted Industrial chemicals;
• Enhance scientific expertise and harmonise international best practice;
• Monitor compliance and investigate breaches of the IC Act; and
• Corporate and regulatory support activities

1.3 AICIS’s purpose

The main purpose of AICIS is to aid in the protection of human health and the environment by assessing the introduction and use of industrial chemicals and providing information and recommendations about managing any identified risks. AICIS is designed to make regulatory effort proportionate to the risks posed by industrial chemical introductions and to promote innovation and encourage the introduction of lower-risk chemicals. 

1.4 How fees and charges recover costs

The full cost of administering the Scheme is recovered from the regulated industry through fees for services and registration charges (levies).  Fees for services apply to a service provided to a specific introducer. The registration charge relates to the regulation of the market as a whole and funds regulatory activities that are not attributable to a service provided to a specific introducer. 

AICIS fees for services apply to activities such as pre-market assessments and authorisations of unlisted chemicals, listing chemicals on the Inventory or amending Inventory listings, applications to protect confidential business information and authorisations to import/export industrial chemicals subject to international agreements. All registrants pay an annual application fee to be listed (or re-listed) on the Register of Industrial Chemical Introducers.

Consistent with being a post-market scheme, the majority of AICIS’s operational costs are funded through the annual registration charge levied on importers and manufacturers (introducers) of relevant industrial chemicals above a certain threshold. Where an introducer imports and/or manufactures relevant industrial chemicals above this threshold ($49,999), an annual registration charge is payable. The applicable levy rate depends on the introduction value of relevant industrial chemicals introduced in the previous financial year and is calculated based on a statutory formula. 

Activities supported by the annual registration charge include: Post-market evaluation of industrial chemicals; post-market compliance monitoring and enforcement; provision of information and recommendations about managing risks from the introduction and use of industrial chemicals; maintaining best practice and fit for purpose regulation; promoting the international harmonisation of regulatory controls or standards for industrial chemicals; maintaining the Inventory; enhancing scientific expertise; collection and publication of information and statistics; and corporate activities to support the efficient and effective operation of the Scheme.

1.5 AICIS’s regulated entities and appropriateness of cost recovery

AICIS’s regulated entities include manufacturers and importers of industrial chemicals ranging from large national and international businesses, research companies and universities, medium to small businesses, to individuals and small-scale soap makers. AICIS's regulated entities seeking to import, export or manufacture chemicals that are utilised for an industrial use, pay AICIS a fee to register their business on the Register of Industrial Chemical Introducers, plus a levy (for introductions above a certain threshold) that varies according to the value of industrial chemicals introduced. 

Chemical introductions where the beneficiary is clearly identifiable attract fees. These include:

• assessed introductions, 
• commercial evaluation authorisations, 
• early listing of chemicals on the inventory and
• protection of CBI. 

Regulated entities introducing under ‘Listed introductions’ utilise the Australian Inventory of Industrial Chemicals, and regulatory costs cannot be attributed to a specific introducer. Introductions under Exempted and Reported categories, although directly attributable to specific introducers, do not currently attract a fee, specifically to promote innovation and encourage the introduction of lower-risk chemicals. They are subjected to pre-screening to flag further analysis by AICIS staff, as needed for compliance monitoring and case management. All compliance monitoring, case management and functions that support the Scheme are covered by levies.

It is Government policy that the full cost of AICIS regulatory activities be recovered from regulated entities (introducers of industrial chemicals). Refer to Section 2 for details on the policy authority that supports AICIS charging arrangements and Section 3 on the design of those charges.

Consistent with the Government’s policy position, full cost recovery is considered appropriate because:

• Introducers create the demand for AICIS’s regulatory activities, driven by the introduction of chemicals into Australia creating a risk ‘to the ongoing protection of human and environmental health;
• In response, AICIS undertakes a number of specific and technical regulatory activities in accordance with the Industry Chemicals Act 2019; and
• Equity is maintained through industry charges, with specific industry groups incurring varying fees and charges based on their impost on AICIS resources.