Commonwealth Numbered Regulations - Explanatory Statements

[Index] [Search] [Download] [Related Items] [Help]

TRADE PRACTICES (CONSUMER PRODUCT SAFETY STANDARD) (DISPOSABLE CIGARETTE LIGHTERS) AMENDMENT REGULATIONS 2002 (NO. 1) 2002 NO. 343

STATUTORY RULES 2002 No. 343

Issued by the Authority of the Parliamentary Secretary to the Treasurer

Trade Practices Act 1974

Trade Practices (Consumer Product Safety Standard) (Disposable Cigarette Lighters) Amendment Regulations 2002 (No. 1)

Section 172 of the Trade Practices Act 1974 (the Act) provides that the Governor-General may make regulations for the purposes of the Act.

Subsection 65C(1) of the Act provides that a corporation shall not, in trade or commerce, supply goods that are intended to be used, or are of a kind likely to be used, by a consumer, if the goods do not comply with a prescribed product safety standard or are subject to an unsafe goods or permanent banning order.

Subsection 65C(2) of the Act provides that a regulation may, in respect of goods of a particular kind, prescribe a consumer product safety standard which requires goods to comply with particular performance, composition, contents, methods of manufacture or processing, design, construction, finish or packaging and labelling rules as are reasonably necessary to prevent or reduce the risk of injury to any person.

The purpose of the proposed amendment to the Regulations is to update the Regulations in line with current market prices and to remove reference to compliance dates now that the compliance regime is established..

Details of the proposed amendment to the Regulations are as follows:

Regulation 1 gives the name of the Regulations as the Trade Practices (Consumer Product Safety Standard) (Disposable Cigarette Lighters) Amendment Regulations 2002 (No. 1).

Regulation 2 states that the Regulations commence on 1 March 2003.

Regulation 3 states that Schedule 1 amends the Trade Practices (Consumer Product Safety Standards) (Disposable Cigarette Lighter) Regulations 1997.

Schedule 1 details the amendments:

Amendment 1 states the name of the regulations is Trade Practices (Consumer Product Safety Standards) (Disposable Cigarette Lighter) Regulations 1997

Amendment 2 states that regulation 3 omits "Before 1 October 1997 these Regulations only apply to lighters that are imported into Australia on or after 1 March 1997" and "On and after 1 October 1997 these Regulations apply to any lighter".

Amendment 3 deletes references to dates of import and substitutes "its value is not more than the relevant amount".

Amendment 4. changes the relevant amount for subregulation 4A(7) to mean a customs value or price under an ex works agreement of up to $5 before 1 August 2003 or the indexed amount on or after 1 August 2003.

Amendment 5 changes Regulation 15 to update the reference to Regulation 4S of the Customs (Prohibited Imports) Regulations 1956.

Amendment 6.substitutes for Regulations 16 & 17:

The following new definitions for Part 4 of Regulation 16:

"CPI number means the All Groups Consumer Price Index number (that is the weighted average of the eight capital cities) published by the Statistician.

latest CPI number means the CPI number for the most recent quarter.

March 2003 CPI number means the CPI number for the quarter beginning on 1 January 2003.

quarter means 3 months beginning on 1 January, 1 April, 1 July or 1 October in a year

Statistician has the meaning given by section 3 of the Australian Bureau of Statistics Act 1975."

For Regulation 17 a requirement for the indexed amount to be worked out in accordance with the formula mentioned in subregulation (2) and if the amount worked out is an amount of dollars and cents, rounded in accordance with subregulation (3). The indexed amount must be rounded to the nearest 25 cents and, if the amount to be rounded is 12.5 cents, rounded up.

Introduction

The Trade Practices (Consumer Product Safety Standard) (Disposable Cigarette Lighter) Regulations commenced on 1 October 1997. The Regulations were introduced to reduce or eliminate the risk of injury or death to children under five by increasing the safety standards applicable to disposable, novelty and cheap refillable cigarette lighters. The Regulations require all disposable, novelty and cheap refillable lighters to have child resistant features and to comply with safety and performance specifications designed to make them safe to operate.

The Regulations were gazetted on 26 February 1997 to take effect from 1 March 1997 for imports and 1 October 1997 for retail sales.

The scope of the Regulations initially did not include cheap refillable lighters. However the scope was broadened to include these when it was discovered that some importers were using these products as a means of circumventing the lighter Regulations. These lighters are similar to disposable lighters but have been modified to include a refill valve in the casing of the lighter. Their retail price is competitive with child resistant disposable lighters which currently have a retail price of approximately $1.50-$2.00.

Members of the Australian Lighter Industry Association consider that the comparatively high cost of the refill cartridge (approximately $5.00) means that in practice these refillable lighters will be used as disposable lighters

The Regulations were mirrored by State and Territory Regulations. In addition the Customs (Prohibited Imports) Regulations were amended to include a prohibition on non child resistant disposable, novelty and cheap refillable lighters.

Problem

What is the problem being addressed?

Prior to the introduction of the cigarette lighter regulations in 1997, there had been at least nine deaths of children under five linked by coronial authorities and fire investigators to the use of disposable lighters.

Studies conducted by both the Victorian Injury Surveillance System (VISS) and the National Injury Surveillance System (NISU) demonstrate a high incidence of injury to children under five resulting from the misuse of disposable cigarette lighters. The NISU data were based on only 50 hospitals and do not provide a measure of the national scale of injuries, but do demonstrate the high incidence of injury to young children. During the period 1986-94 from a sample of 128 cases of people obtaining hospital treatment as a result of injuries caused by a cigarette lighter, 33% were children under five years of age.

Cheap refillable lighters are defined in the regulations as lighters with a customs valuation or ex-works price of less than $2.00. However, State and Territory consumer affairs/fair trading authorities have advised that some importers are ensuring that cheap refillable cigarette lighters are being imported at a customs valuation of just over $2.00, putting them outside the scope of the Regulations. Accordingly they propose that an amendment to the Regulations to increase the customs valuation or ex-works price to $5.00 would ensure that the majority of cheap refillable lighters are included.

In September 2000, the United States Consumer Product Safety Commission (CPSC) published an evaluation of the CPSC Safety Standard for Cigarette Lighters which was introduced on 12 July 1994. The evaluation concluded that the Standard has been very effective in reducing fire losses caused by children younger than age five playing with cigarette lighters. The CPSC estimated that the Standard has prevented 4,800 fires, 130 deaths, 950 injuries and $76.4 million property losses in 1998 in the US, with total societal savings estimated at $773.9 million. The Treasury does not have the resources to undertake a similar evaluation; however there have been no reported lighter related deaths of children under five since the Regulations were introduced, which would seem to suggest that they have been effective.

Commonwealth, State and Territory consumer affairs/fair trading authorities would like to urgently raise the customs valuation to up to $5.00 to provide more adequate coverage of the marketplace.

Why is government action needed to correct the problem?

The Ministerial Council on Consumer Affairs (MCCA) agreed in September 1996 to introduce a national standard for disposable, novelty and cheap refillable lighters incorporating safety and performance requirements and the child resistant requirements of the United States standard. MCCA rejected the view that accidents with cigarette lighters could be prevented by parental supervision without the need for regulatory action. The number of coronial inquiries and press reports linking deaths of children under five to their playing with cigarette lighters, and recommendations by coroners and injury data collection agencies for the introduction of child resistant lighters convinced MCCA of the urgent need for regulatory action.

OBJECTIVES

What are the objectives of government action?

The Government's consumer protection policy includes the objective of ensuring that consumer products are safe. The Trade Practices Act 1974 includes provisions to support this objective through the establishment of mandatory consumer product safety standards, product bans, recalls of unsafe products and the issuing of product safety notices.

In the case of cheap refillable cigarette lighters, the Government's aim is to extend the scope of the standard to ensure a wider coverage of the market and thus to help reduce or eliminate the number of serious injuries and deaths caused by children under five playing with cigarette lighters. The $2.00 price cap on cheap refillables no longer covers all but the luxury end of the market, and industry sources advise that cheap refillables with a customs valuation or ex-works price just over $2.00 are readily available.

Is there a regulation/policy currently in place? Who administers it?

The Trade Practices (Consumer Product Safety Standard) (Disposable Cigarette Lighter) Regulations commenced on 1 October 1997. The Regulations require all disposable, novelty and cheap refillable lighters to have child resistant features and to comply with safety and performance specifications designed to make them safe to operate.

Currently cheap refillable lighters are defined as having a customs value or ex-works price of less than $2.00. The proposal is to extend this valuation to up to $5 and thus increase the scope of the Regulations.

The Regulations are enforced by the Australian Competition and Consumer Commission (ACCC) who have advised that they support the proposed amendment.

OPTIONS

No amendment to the regulations

The regulations could be left as they are. However as State and Territory consumer affairs/fair trading authorities have identified a serious problem with the current scope of the Regulations, taking this option would allow unsafe lighters to remain on the market.

Amendment to the regulations

An amendment to the Regulation to increase the customs value for cheap refillable lighters to up to $5.00 would increase the scope of the Regulation and ensure that dangerous cheap refillable lighters are kept off the Australian market. An amendment is the preferred option and is supported by all State and Territory Ministers for Consumer Affairs/Fair Trading, who intend to introduce the same amendment to their mirror regulations.

IMPACT ANALYSIS

Who is affected by the problem and who is likely to be affected by its proposed solution?

An amendment to the Regulations would affect Australian consumers, businesses involved in the supply of lighters (importers, distributors and retailers) and government. State and Territory consumer affairs/fair trading agencies and the ACCC would be likely to find enforcement easier, since at the moment there are a number of dangerous cheap refillable cigarette lighters on the market which fall just outside the scope of the Regulations.

The impact of the options is assessed as follows.

No amendment to the regulations

Costs

Consumers

Consumers would be exposed to dangerous cheap refillable lighters without child resistant mechanisms, and a concurrent increased risk of house and bush fires.

Industry

At present, refillable lighters without child resistant mechanisms are highly price competitive, and some industry sectors feel that they represent unfair competition for disposable lighters. Despite the fact that cheap refillable lighters with a customs valuation of less than $2.00 are a prohibited import, industry advise that these lighters are freely available at a much cheaper price than disposable lighters with child resistant mechanisms, and have called on agencies responsible for enforcement to vigorously enforce the standard.

Government

Despite the existence of the Regulations, cheap hazardous refillable lighters are still entering the Australian market, and competing with disposable lighters with child resistant mechanisms. As parents are more likely to leave these cheap lighters lying around the house, (which they would not do with a top of the range lighter) this leads to increased risk of both house fires and bush fires, and subsequent costs to Government.

Benefits

Consumers

The continued availability of cheap refillable lighters without child resistant mechanisms could result in a greater choice of products and in prices remaining slightly cheaper for consumers.

Industry

Industry would have a greater choice of products to import. However, some importers and distributors consider that the continued availability of cheap refillable lighters without child resistant mechanisms represents unfair competition for those suppliers who only supply lighters with child resistant mechanisms.

Government

The current Regulations have resulted in savings in health costs. There are no identifiable further savings for the government, since enforcement costs would remain at about $20,000 per annum.

Amendment to the regulations

Costs

Consumers

Theoretically, cheap refillable lighters with child resistant mechanisms should be slightly more expensive. However, the market is highly competitive and consumers would still have a wide choice of disposable, novelty and refillable lighters.

Industry

Some industry sectors have indicated that raising the customs value for cheap refillable lighters would eliminate unfair price competition and would encourage consumers to buy disposable lighters with child resistant mechanisms. Industry has been advised in writing of the proposed amendment and has indicated strong support. In the light of this strong support, it was not considered necessary to hold a formal meeting with industry.

Government

A US September 2000 estimation of the effects of the CPSC lighter standard found as follows:

•       In 1998, the most recent year for which national fire loss data are available, an estimated 2,400 structure fires were caused by children younger than 5 playing with cigarette lighters. In the absence of the standard, there would have been an estimated 7,100 fires. The difference of 4,700 represents fires prevented during 1998 that are attributable to the standard.

•       An estimated 70 deaths occurred in residential structure fires caused by children under 5 playing with cigarette lighters in 1998. In the absence of the standard there would have been an estimated 200 deaths. The difference of 130 deaths represents deaths prevented during 1998 that are attributable to the standard.

•       An estimated 480 injuries occurred in residential structure fires caused by children under 5 playing with cigarette lighters in 1998. In the absence of the standard there would have been an estimated 1,430 injuries. The difference of 950 represents injuries prevented during 1998 that are attributable to the standard.

•       An estimated $38.2 million in property loss occurred in residential structure fires cause by children under 5 playing with cigarette lighters in 1998. In the absence of the standard there would have been an estimated $114.6 million in property loss. The difference of $76.4 million represents property loss prevented during 1998 that is attributable to the standard.

•       Total societal costs associated with 1998 fire losses were estimated at $412.2 million. In the absence of the standard, estimated costs would have been about $1.2 billion. The difference of $773.9 million represents the total societal benefits attributable to the standard.

The CPSC concluded that the standard has been very effective in reducing fire losses caused by children under 5 playing with cigarette lighters. The CPSC estimate that the Standard has prevented 4,800 fires, 130 deaths, 950 injuries and $76.4 million property loss in 1998, with total societal savings estimated at $773.9 million.

Although the figures mentioned above apply to the US, they provide an indication of the benefits to society that would flow from an increased scope for the Australian cigarette lighter Regulations.

CONSULTATION

Discussions were held with State and Territory authorities through the Consumer Products Advisory Committee (CPAC), the Standing Committee of Officials on Consumer Affairs (SCOCA) and the Ministerial Council on Consumer Affairs (MCCA).

Known industry representatives (importers and distributors) were also contacted for their opinion.

All parties gave a high level of support to the proposal to increase the scope of the Regulations to require cheap refillable cigarette lighters with a customs value or ex-works price of up to $5.00 to have a child resistant mechanism.

CONCLUSION AND RECOMMENDED OPTION

An amendment to the Regulations to include a requirement that cheap refillable lighters with a customs value of up to $5.00 have a child resistant mechanism is the most efficient means of ensuring that lighters on the Australian market are safe, and that unsafe lighters can be eliminated from the marketplace.

The cigarette lighter regulations have been working effectively since 1997 and this proposal will ensure an even higher standard of safety for the Australian community.

IMPLEMENTATION AND REVIEW

The proposal would be implemented through an amendment to the Trade Practices (Consumer Product Safety Standard) (Disposable Cigarette Lighter) Regulations. A draft amendment is attached.

It is planned to conduct a major review of the cigarette lighter standard in 2003, in the light of the newly published Australian Standard for Cigarette Lighters. An effective review will take approximately twelve months to complete. These minor amendments are merely to correct some anomalies in the existing standard and make enforcement easier and more effective for the ACCC and the States and Territories.