Therapeutic Goods Amendment (2016 Measures No 1) Bill 2016 [2017] AUSStaCSBSD 20 (8 February 2017)

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Purpose	This bill seeks to amend the Therapeutic Goods Act 1989 to: • enable the making of regulations to establish new priority pathways for faster approval of medicines, medical devices, biologicals and conformity assessment certificates in Australia; • enable the making of regulations to designate Australian notified bodies that would be able to appraise the suitability of the manufacturing process for medical devices manufactured in Australia and to consider whether such medical devices meet relevant minimum standards for safety and performance, as an alternative to the TGA undertaking such assessments; • allow certain unapproved therapeutic goods that are currently accessed by healthcare practitioners through applying to the Secretary for approval to be more easily obtained by practitioners; and • provide review and appeal rights for persons who apply to add new ingredients for use in listed complementary medicines
Portfolio/Sponsor	Health and Aged Care
Introduced	House of Representatives on 1 December 2016

Broad delegation of legislative power^[35]

1.54 Schedule 1 to the bill seeks to amend the Therapeutic Goods Act 1989 (the TG Act) to enable sponsors of therapeutic goods to, 'in appropriate circumstances', make changes to information about their goods included in the Australian Register of Therapeutic Goods (the Register) by way of a notification to the Secretary, rather than by applying to seek the Secretary's approval for the variation. The main effect of including goods in the Register is that sponsors of those goods may lawfully import, export, manufacture and supply those goods.^[36]

1.55 Items 1, 3 and 5 of Schedule 1 will have the effect that where a sponsor requests a variation to its entry on the Register, and the variation is of a kind specified in the regulations and meets the conditions prescribed in the regulations, then the Secretary must vary the entry on the Register.^[37] No further detail is provided as to what kind of variation, or type of conditions, may be prescribed.

1.56 As there is no detail on the face of the bill or in the explanatory memorandum, in order to assess whether these provisions appropriately delegate legislative power the committee requests the Minister's advice as to the kinds of variation and conditions that it is envisaged may be prescribed in regulations made under these proposed provisions.

Pending the Minister's reply, the committee draws Senators' attention to the provisions, as they may be considered to delegate legislative powers inappropriately, in breach of principle 1(a)(iv) of the committee's terms of reference.

Significant matters in delegated legislation^[38]

1.57 Schedule 2 to the bill seeks to insert a new Part 4-4A into the TG Act relating to 'Australian conformity assessment bodies'. Conformity assessment is the examination of manufacturing practices and procedures to ensure that medical devices comply with applicable essential principles relating to the safety and performance of medical devices. The measures contained in this Part will allow the Therapeutic Goods Administration (TGA) to designate Australian companies to undertake conformity assessments of medical devices. These conformity assessments will be able to be used when the Secretary decides whether medical devices assessed by such companies can be included in the Register.

1.58 Proposed subsection 41EWA(1) provides that 'the regulations may make provision for and in relation to empowering the Secretary to make conformity assessment body determinations'. As such, this provides a broad regulation-making power which leaves most of the elements of how Australian companies will be able to be designated as 'conformity assessment bodies' to delegated legislation (which is not subject to the same level of parliamentary scrutiny as primary legislation). Proposed subsection 41EWA(3) notes that the regulations may make provision for, among other things, the following matters:

1.59 Furthermore, proposed subsection 41EWA(5) enables the regulations to prescribe conditions that may apply to a conformity assessment body determination. Examples of the conditions that may be prescribed in future regulations are provided in proposed subsection 41EWA(6) and include the power to enter, inspect and take recordings of premises and to require the production of information or documents.

1.60 Proposed subsection 41EWA(8) is intended to make it clear that despite the specific powers and activities permitted to be prescribed in new subsections 41EWA(3)–(7), none of these provisions are intended to limit the broad regulation making power in proposed subsection 41EWA(1).^[39]

1.61 These provisions raise a number of scrutiny issues. There is no explanation as to why it is considered necessary to leave most of the elements of how Australian companies will be able to be designated as 'conformity assessment bodies' to delegated legislation (which is not subject to the same level of parliamentary scrutiny as primary legislation).

1.62 The committee's view is that significant matters, such as provisions requiring a body to allow entry and inspection of their premises and the production of documents, should be included in primary legislation unless a sound justification for the use of delegated legislation is provided. In this regard, the committee requests the Minister's advice as to:

Broad delegation of administrative powers^[41]

1.63 Proposed subsection 41EWA(9) is intended to make it clear that while the Secretary is nominated as the person exercising powers or performing functions in connection with the designation of conformity assessment bodies, this does not preclude the regulations from allowing any or all of the Secretary's powers or functions to be delegated.^[42]

1.65 The committee has consistently drawn attention to legislation that allows for the delegation of administrative powers to a relatively large class of persons, with little or no specificity as to their qualifications or attributes. Generally, the committee prefers to see a limit set either on the scope of the powers that might be delegated, or on the categories of people to whom those powers might be delegated. The committee's preference is that delegates be confined to the holders of nominated officers or to members of the Senior Executive Service. Where broad delegations are provided for the committee considers that an explanation of why these are considered necessary should be included in the explanatory memorandum.

1.66 The committee requests the Minister's advice as to why it is considered necessary to allow for the delegation of any or all of the Secretary's functions or powers in these provisions and whether the bill can be amended to provide some legislative guidance as to the scope of powers that might be delegated, or the categories of people to whom those powers might be delegated.

Pending the Minister's reply, the committee draws Senators' attention to the provision, as it may be considered to make rights, liberties or obligations unduly dependent upon insufficiently defined administrative powers, in breach of principle 1(a)(ii) of the committee's terms of reference.

Strict liability offences^[44]

1.67 Items 4, 12 and 24 of Schedule 3 introduce three new provisions which make it an offence for a person with certain notification obligations to omit to do an act and that omission breaches those requirements. Each offence is stated to be one of strict liability and subject to 10 penalty units. The explanatory memorandum provides no justification as to why the offences are subject to strict liability.

1.68 In a criminal law offence the proof of fault is usually a basic requirement. However, offences of strict liability remove the fault (mental) element that would otherwise apply. The committee expects the explanatory memorandum to provide a clear justification for any imposition of strict liability, including outlining whether the approach is consistent with the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers.

1.69 The committee requests a detailed justification from the Minister for each proposed strict liability offence with reference to the principles set out in the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers.^[45]

Pending the Minister's reply, the committee draws Senators' attention to the provisions, as they may be considered to trespass unduly on personal rights and liberties, in breach of principle 1(a)(i) of the committee's terms of reference.

Consultation prior to making delegated legislation^[46]

1.71 The repeal of subsection 10(4) would remove the requirement for the Minister to consult with a committee prior to making standards for medicines and other therapeutic goods. In explaining the repeal of this provision, the explanatory memorandum states that a committee known as the Therapeutic Goods Committee 'will cease to exist on 1 January 2017' and that it will be replaced by other statutory committees with functions that include providing advice on a range of matters including standards for relevant types of therapeutic goods. The explanatory memorandum also notes that 'the Minister will have the option of consulting any one or more of the new replacement committees about matters that include standards'.^[47]

1.72 Current subsection 10(4) does not refer to a specific committee, but rather states that the Minister must not make a standard for medicines or therapeutic goods 'unless the Minister has consulted with respect to the proposed action with a committee established by the regulations to advise the Minister on standards'. It is therefore not clear why the ceasing of the Therapeutic Goods Committee, given it will be replaced by other committees established by the regulations, necessitates the removal of the consultation requirement in subsection 10(4).

1.73 Additionally, the repeal of subsection 36(3) will remove the reference to the Minister's discretion to obtain advice from a statutory committee before determining principles to be observed in the manufacture of therapeutic goods for use in humans.

1.74 Where the Parliament delegates its legislative power in relation to important matters, such as the making of standards for medicines and therapeutic goods, the committee generally considers that it is appropriate that specific consultation obligations (beyond those in section 17 of the Legislation Act 2003) are included in the legislation and that compliance with these obligations is a condition of the validity of the legislative instrument.

1.75 The committee requests the Minister's advice as to why it is necessary to remove:

Fees in delegated legislation^[48]

1.76 Schedule 5 to the bill seeks to implement a recommendation of the Expert Panel Review of Medicines and Medical Devices Regulation in relation to providing review and appeal rights for persons who apply to have new ingredients permitted for use in listed complementary medicines. Currently, a person may apply to the Minister for a variation to the permissible ingredients legislative instrument made by the Minister under section 26BB of the TG Act. Items 1 and 2 seek to incorporate a new step for the Secretary to make a recommendation to the Minister about such variations in order to accommodate the provision of review and appeal rights for applicants for new ingredients.

1.77 The committee welcomes the addition of these review and appeal rights.^[49] However, the committee notes that the bill provides that both an application and evaluation fee may be prescribed in the regulations. There is no guidance in the legislation as to how the fee amount might be determined, and no explanation has been provided as to why it is necessary to charge a fee for the application plus a fee for the evaluation itself. The committee understands it may be possible to explicitly state on the face of the bill that the amount of fee be limited to cost recovery,^[50] to set a maximum limit on the fee that may be imposed, to prescribe a formula by which the fee amount is calculated or, in the case of indexation, to include the method of calculating indexation on the face of the bill. In some legislation a provision is included which provides that 'a fee must not be such as to amount to taxation'. Office of Parliamentary Counsel Drafting Direction 3.6 states that:

1.78 While the committee notes that the setting of the level of fees is often left to delegated legislation, the committee requests the Minister's advice as to whether consideration has been given to providing greater legislative guidance as to how the fee amount (and the method of indexation, if any) is to be determined. The committee also requests the Minister's advice why it considered necessary to provide for an application and an evaluation fee, rather than providing for only a single fee.

Reversal of evidential burden of proof^[52]

1.79 Proposed subsections 41AD(2) and (3) and 41AE(2) and (3) provide exceptions (offence-specific defences) to offences relating to the provision of false or misleading information or documents. These offences carry relatively significant penalties—imprisonment for 12 months or 1,000 penalty units, or both.

1.80 Subsection 13.3(3) of the Criminal Code Act 1995 provides that a defendant who wishes to rely on any exception, exemption, excuse, qualification or justification bears an evidential burden in relation to that matter.

1.81 While the defendant bears an evidential burden (requiring the defendant to raise evidence about the matter), rather than a legal burden (requiring the defendant to positively prove the matter), the committee expects any such reversal of the evidential burden of proof to be justified.

1.82 As neither the statement of compatibility nor the explanatory memorandum address this issue, the committee requests the Minister's advice as to why it is proposed to use offence-specific defences (which reverse the evidential burden of proof) in this instance. The committee's consideration of the appropriateness of a provision which reverses the burden of proof is assisted if it explicitly addresses relevant principles as set out in the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers.^[53]

Privilege against self-incrimination^[54]

1.83 Proposed section 41AG provides that a person is not excused from giving information or producing a document under a section 41AB notice on the ground that the giving of the information or the production of the document would tend to incriminate the person or expose the person to a penalty. This provision therefore overrides the common law privilege against self-incrimination which provides that a person cannot be required to answer questions or produce material which may tend to incriminate himself or herself.^[55]

1.84 A use and derivative use immunity is included in proposed subsection 41AG(2) as it provides that the information or documents produced, or anything obtained as a direct or indirect consequence of the production of the information or documents, is not admissible in evidence in most proceedings. Although the committee welcomes the inclusion of the use and derivative use immunity, the committee expects that the explanatory memorandum should provide a justification for removing the privilege against self-incrimination.

1.85 The committee requests the Minister's advice as to why it is proposed in the bill to abrogate the privilege against self-incrimination, particularly by reference to the matters outlined in the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers.^[56]

Pending the Minister's reply, the committee draws Senators' attention to the provision, as it may be considered to trespass unduly on personal rights and liberties, in breach of principle 1(a)(i) of the committee's terms of reference.

[35] Schedule 1, items 1, 3 and 5, proposed subsections 9D(2C), 9D(3AC), and 9D(3CB).

[40] For further discussion in relation to prescribing fees in delegated legislation see paragraphs 1.76–1.78.

[41] Schedule 2, item 4, proposed subsection 41EWA(9); Schedule 6, item 1, proposed subsection 25AAA(8); Schedule 12, item 55, proposed subsections 57(8) and (9).

[43] These sections relate to 'Exemptions where unavailability of therapeutic goods', 'Approvals where substitutes for biologicals are unavailable' and 'Approvals if substitutes for medical devices are unavailable or in short supply'.

[45] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp 22–25.

[50] See, for example, subsection 32(4) of the Hazardous Waste (Regulation of Exports and Imports) Act 1989 which provides that: 'The amount or rate of a fee must be reasonably related to the expenses incurred or to be incurred by the Commonwealth in relation to the application or notice to which it relates, and must not be such as to amount to taxation'.

[51] Office of Parliamentary Counsel, Drafting Direction 3.6, October 2012, p. 38.

[53] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp 50–52.

[56] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp 94–99.

Australian Senate Standing Committee for the Scrutiny of Bills - Scrutiny Digests