Commonwealth Numbered Regulations - Explanatory Statements

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FOOD STANDARDS AUSTRALIA NEW ZEALAND AMENDMENT REGULATIONS 2004 (NO. 1) 2004 NO. 265

Food Standards Australia New Zealand (the Authority) is a body corporate continued in existence by section 6 of the Food Standards Australia New Zealand Act 1991 (the Act). Section 70 of the Act provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters required or permitted by the Act to be prescribed or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The primary business of the Authority is to develop, vary and review food standards and codes of practice. Food standards are developed or varied by the Authority, either by application from any agency, body, or person, or by a proposal of its own initiative.

The purpose of the Regulations is to amend the Food Standards Australia New Zealand Regulations 1994 (the Principal Regulations) to make changes to the cost recovery procedures, including charges, simplify those parts of the Principal Regulations that govern the procedures the Authority may adopt to abridge its statutory obligations for public notification of the development and variation of standards, and update the list of Government, Industry and Consumer bodies to whom the Authority may refer certain information and from which it may obtain nominations for the Board of the Authority.

The impetus for the Regulations was a review of the cost recovery procedures of the Authority. The review reported that the Authority had not taken into account a number of activities when fees and charges were introduced by the National Food Authority Amendment Regulations 2000 (No. 1). It was also found that the number of cost recovery categories of assessment was insufficient to address the range of applications for the development or variation of standards received by the Authority, and that the definitions within those categories of assessment were similarly insufficient to describe the potentially large range of applications the Authority receives.

During the review of the cost recovery aspects of the Principal Regulations, the Authority found that it was necessary to simplify the procedures that the Authority may adopt to abridge its statutory obligations for public notification of the development and variation of standards and also update the list of Government, Industry and Consumer bodies to whom the Authority may refer certain information and from which it may obtain nominations for the Board of the Authority.

The Regulations:

•       prescribe the charges to be paid to the Authority for the services and facilities it provides and the circumstances giving rise to those charges;

•       prescribe the categories of assessment that may be required for the assessment of an application to develop or vary a food standard, and provide for the number of categories in the Principal Regulations to be increased from 5 to 6;

•       prescribe greater detail for those matters to be taken into account in assessing the appropriate category of assessment for an application, and set a threshold of the hours likely to be required to assess an application;

•       provide simplicity and greater clarity in the modifications to the Act should the Authority decide under section 36 of the Act to omit a round of public notification of the development and variation of standards; and

•       update the list of agencies to which the Authority may either disclose confidential commercial information or from which nominations may be called for the Board of the Authority.

Details of the Regulations are set out in the Attachment.

The Act specifies no conditions that need to be met before the power to make the Regulations may be exercised.

The Regulations commence on the date of their notification in the Gazette.

ATTACHMENT

DETAILS OF THE FOOD STANDARDS AUSTRALIA NEWZEALAND AMENDMENT REGULATIONS 2004 (No. 1).

Regulation 1

Regulation 1 provides that the name of the regulations is the Food Standards Australia New Zealand Amendment Regulations 2004 (No. 1).

Regulation 2

Regulation 2 provides that the Regulations commence on the day of their notification in the Gazette.

Regulation 3

Regulation 3 provides that Schedule 1 amends the Food Standards Australia New Zealand Regulations 1994 (the Principal Regulations).

Regulation 4

Regulation 4 provides for transitional provisions in relation to any applications made, for which a charge or fee was paid, before the commencement of the Regulations. Those applications will continue to be dealt with under the Principal Regulations immediately in force prior to the commencement of the Regulations.

Schedule 1-Amendments

Item 1

Item 1 amends existing regulation 2 (Interpretation) to insert subregulation (1). This is a technical amendment to accommodate the insertion of a new subregulation 2(2) by item 3 (see below).

Item 2

Item 2 amends existing subregulation 2(1) (Interpretation) to insert a definition of 'category' in relation to an application, being the category of assessment into which the application is classified according to new regulation 12 (see item 7, below).

Item 3

Item 3 amends existing regulation 2 (Interpretation) to insert subregulation (2). This subregulation states that a reference to the time required to fully assess an application includes the time required for steps to be taken by the Authority under section 13, section 15, section 15A, section 16 and any associated activities under Division 2 of Part 3 of the Food Standards Australia New Zealand Act 1991 (the Act).

Item 4

Item 4 omits existing subregulation 6A(3), including the note. This subregulation deals with circumstances arising from the amendments to the Act in 2001 and was no longer required.

Item 5

Item 5 substitutes existing regulation 8 (Charges), with a new regulation 8, providing for the payment of charges by applicants for the development or variation of a food standard, the circumstances in which those charges are payable, and certain deeming provisions concerning when the payment of an application fee is taken to have occurred. Regulation 8 provides:

•       New subregulation 8(1) - that the charges to be paid to the Authority by a body or person for services and facilities provided by the Authority are set out in Schedule 3 to the Principal Regulations.

•       New subregulation 8(2) - the circumstances for when a charge is payable in relation to an application. Those circumstances mirror those contained in paragraphs 66(6)(a) and (b) of the Act, which apply to the existing regulation 8. Those circumstances provide that charges apply for the development or variation of a food standard in two circumstances only. Those are:

1.       where the development or variation of a food standard would confer an exclusive capturable commercial benefit on the applicant. Subsection 66 (9) of the Act provides and exclusive capturable commercial benefit applies where

(a)       the applicant can be identified as a person or body that may derive a financial gain from the coming into effect of the draft standard or draft variation of the standard that would be prepared in relation to the application; and

(b)       any other unrelated persons or bodies, including unrelated commercial entities, would require the agreement of the applicant in order to benefit financially from the approval of the application.

2.       where the applicant elects to have its application for the development or variation of a standard dealt with by the Authority in the first year of the Authority's work plan, rather than in the second or third year of that plan. This means that if an applicant wishes to have the consideration by the Authority of its application for the development or variation of a food standard expedited, it must pay a charge to the Authority.

•       New subregulation 8(3) - the same, in effect, as existing subregulation 8(2) in an amended form. The amendment is necessary to clarify that the deeming of when a fee for an application is taken to accompany the application is only for the purposes of paragraph 12(2)(c) of the Act, and only in the circumstances where the application is for the development or variation of a standard and that would confer an exclusive capturable commercial benefit on the applicant.

•       New subregulation 8(4) - in the same terms as existing subregulation 8(3).

Item 6

Item 6 amends subregulation 10(3) to clarify the circumstances in which a refund may be paid to an applicant. That is, if an application is withdrawn after draft assessment has commenced but before half the work required for the draft assessment is completed, half of the amounts paid by the applicant under section 15 of the Act must be repaid to the applicant.

Item 7

Item 7 substitutes regulation 12 (Initial Assessment - relevant matters) with a new regulation 12 setting out the obligations of the Authority when undertaking an initial assessment in relation to which charges are payable. Those obligations are to classify the application in accordance with the categories of assessment set out in a new Schedule 4 (see item 24, below) and where the application is classified as a category 6 application, which is the highest category of assessment available to the Authority and is intended for applications for the development or variation of food standards of the greatest complexity. If an application is assessed at category 6, the Authority will also be required to determine whether the number of hours required to complete the application will exceed 1850 hours, and if so, how many hours in excess of 1850 are likely to be required, as in those circumstances, a surcharge on the charge for a category 6 application will also apply.

Item 8

Item 8 substitutes existing regulation 13 (Outcome of Initial Assessment) with a new regulation 13 that provides for the advice that must be given to an applicant with a notification issued under subsection 13A(2) of the Act. The new regulation 13 is in practically the same terms as the existing regulation 13, except that applicants must now also be advised of any further charges payable under section 16 of the Act (charges for final assessment). Further, existing subregulation 13(2) is omitted. That subregulation was unnecessary as it provides for a right of review already provided for in subparagraph 63(1)(a)(i) of the Act.

Item 8 also amends existing regulation 14 (Review of decisions), making only minor technical changes in terminology, but preserving an applicant's right of internal review and application for review to the Commonwealth Administrative Appeals Tribunal.

Item 9

Item 9 omits existing regulations 15 to 18 (Charges - draft assessment, Charges - final assessment, Charges - preparing drafts, and Charges - election). The subject matter of those regulations is dealt with in new Schedule 4 and paragraph 8(2)(b) of the Regulations.

Items 10 and 11

Items 10 and 11 amends existing Schedule 1, Part 1 item 1 and Schedule 1, Part 2 (Departments of the Commonwealth and State and Territory authorities) to update the names of Departments and authorities mentioned in those parts which reflects changes of name, and division of responsibilities within those bodies. Existing regulation 3 states that for paragraph (a) of the definition of appropriate government agency in subsection 3(1) of the Act, each Department of the Commonwealth mentioned in Part 1 of Schedule 1, and each State and Territory Authority mentioned in Part 2 of Schedule 1 is prescribed. This is for the purposes of those Departments and authorities receiving official notification from the Authority in relation to the progress of applications and proposals under consideration by the Authority.

Item 12

Item 12 amends Schedule IA to the Principal Regulations (Modifications or adaptations of Part 3 of the Act under subsection 36(2) of the Act).

Section 36 of the Act provides that if the Authority is satisfied that an application or proposal raises issues of minor significance or complexity only, and that to omit to do one or more of the matters that the Authority is required to do under Part 3 of the Act in relation to that application or proposal will not adversely affect the interests of any person or body, the Authority may omit to do that matter or those matters.

A decision of the Authority under section 36 must be in writing and is subject to notification requirements. Also, subject to the Administrative Appeals Tribunal Act 1975, an appeal may be made to the Administrative Appeals Tribunal against a decision of the Authority under section 36.

The intent of section 36 is that the full extensive and resource-intensive public consultation mechanism set down in Part 3 of the Act might not be necessary where an application or proposal raises only minor issues. By way of example, section 36 could be used to efficiently progress minor amendments to the Australia New Zealand Food Standards Code to correct drafting errors and other such matters of no great import.

However, the statutory procedure set down in Part 3 is very detailed, and is written in terms that assume that no steps have been omitted. This creates a potential difficulty where the Authority may have decided to omit a step. Recognising this, Parliament provided in subsection 36(2) that, for the purpose of facilitating a decision made by the Authority under section 36 in relation to an application or proposal, the regulations may provide for the application of the provisions, or of specified provisions, of Part 3, subject to such modifications and adaptations as are prescribed, in relation to that application or proposal.

Existing regulation 4 specifies how the statutory procedure in Part 3 is to apply in cases where the Authority decides, under section 36, to omit to do certain steps. The modifications and adaptations to the provisions of Part 3 are set out in Schedule 1A to the Principal Regulations with respect to decisions of the Authority to omit:

•       to invite submissions after it accepts an application (as would otherwise be required by section 14 of the Act); and

•       to invite submissions after it prepares a proposal (as would otherwise be required by section 14A).

Items 13 and 14

Items 13 and 14 amend Schedule 2, Parts 1 and 2 (Prescribed authorities to which confidential commercial information may be disclosed). Existing regulation 6 provides that for the purposes of paragraph 39(4)(b) of the Act, the authorities mentioned in Schedule 2 are prescribed.

Section 39 of the Act imposes upon members of the Board, the Authority, its staff and committee members and its consultants a duty not to disclose and confidential commercial information in respect of food that has been acquired by a person because of his or her work with the Authority. Subsection 39(4) of the Act provides that despite this duty of confidentiality, the Chief Executive Officer of the Authority may disclose such confidential commercial information to a prescribed authority or person.

The amendment is necessary to update the names prescribed authorities to which confidential commercial information may be disclosed and reflects changes of name, and division of responsibilities within those authorities.

Items 15 to 23

Items 15 to 23 (Schedule 2A Board - prescribed organisations and public bodies from whom nominations may be sought) amend existing Schedule 2A to update the names and corporate identities of the organisations and public bodies from whom nominations to the Board of the Authority may be sought.

Section 40 of the Act establishes the constitution of the Board of the Authority.

Paragraphs 40(3)(a) and 40(4)(a) of the Act provide that the Minister may appoint persons to the Board subject to their having expertise in particular fields. For the purposes of such appointment, paragraphs 40(3)(b) and 40(4)(b) of the Act provide that the Minister may seek nominations from such public bodies and organisations as may be prescribed in the regulations for the nomination of a person to the Board of the Authority.

Existing regulation 6A provides, for paragraphs 40(3)(b) or 40(4)(b) of the Act, which organisations or public bodies are prescribed in Schedule 2A for the purposes of either an appointment under paragraph 40(3)(a) or 40(4)(a), and the conditions of expertise relating to such an appointment.

The amendments are necessary to reflect changes in name and corporate identity of various public bodies and organisations in both Australia and New Zealand.

Item 24

Item 24 amends existing Schedule 3 (Charges) to update the charges payable to the Authority and inserts a new Schedule 4 (Categories of assessment), increases the number of assessment categories from 5 to 6 and provides greater detail of the inputs and outcomes necessary for each category of assessment

Existing Part 2 Schedule 3 sets out the charges payable to the Authority for each stage of the assessment process undertaken by the Authority for which charges may be levied. When originally conceived, those charges were based on the average cost to the Authority of processing each type of category. Since the Authority began charging for certain applications, the costs to the Authority have increased, and the amendments to the quantum of charges are necessary to reflect those increases. Existing Part 2 is omitted, with the charges being incorporated in the new Schedule 3, which are applied depending on which Category of Assessment the Authority decides is appropriate.

Existing Part 1 of Schedule 3 was inserted by the National Food Authority Amendment Regulations 2000 (No. 1) to provide for 5 categories of assessment, with definitions, for the purposes of the Authority exercising its powers to impose charges upon an applicant. Those 5 categories and descriptions are insufficient to cover the potential range and complexity of applications received that the Authority has received and is likely to continue to receive.

Existing Part 1 of Schedule 3 is omitted and a new Schedule 4 substituted. The new Schedule 4 provides for 6 Categories of Assessment, with greatly expanded examples of what matter would typically satisfy a category and the factors that may be taken into account by the Authority. In order to facilitate flexibility and certainty for applicants, the examples and factors overlap from category to category. However, New Schedule 4 also provides that which category an application will be assigned is contingent upon the hours likely to be required to fully complete the assessment.