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Australian Senate Standing Committee for the Scrutiny of Bills - Scrutiny Digests |
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Purpose
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The bill amends the Therapeutic Goods Act 1989 (the TG Act) to
prohibit the importation, domestic manufacture, supply, commercial possession
and advertisement of non-therapeutic
and disposable vaping goods. Therapeutic
vaping goods will continue to be available and subject to regulation under the
TG Act in
line with other medicines and therapeutic goods.
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Portfolio
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Health and Aged Care
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Introduced
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House of Representatives on 21 March 2024
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Bill status
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Before the House of Representatives
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2.223 Schedule 1 to the bill inserts many new offence provisions into the Therapeutic Goods Act 1989 (the TG Act).
2.224 Item 6 of Schedule 1 to the bill amends the definitions in subsection 3(1) of the TG Act to provide that the quantity of a kind of vaping goods that will be a ‘commercial quantity’ will be the amount set out in regulations. The definition of the commercial quantity is a central component to the offence provisions, with different penalties applying depending on the amount of the units above the commercial quantity in contravention. In addition, item 10 of Schedule 1 to the bill amends the definitions in subsection 3(1) of the TG Act to provide that the meaning of a ‘unit’ of vaping goods will have the meaning to be prescribed by the regulations.
2.225 For example, item 11 would insert proposed section 41Q into the TG Act which would create a new criminal offence, an additional offence of strict liability, and a new civil offence, in relation to the importation of vaping goods into Australia. Proposed subsection 41Q(4) would provide that a person who contravenes the civil offence provision in proposed subsection 41Q(3) would commit a separate contravention in respect of each unit of vaping goods imported by the person into Australia.
2.226 In addition, proposed section 41QC provides for a range of offences of possession where the person possesses differing amounts exceeding the commercial quantity of vaping products, with higher penalties for the larger amounts. As noted above, the prescription of the quantity of a kind of vaping goods that would amount to a ‘commercial quantity’ will be left to regulations, meaning that a significant component of the offences will be left to delegated legislation.
2.227 Further, most if not all the new offences are being introduced alongside offence-specific defences which reverse the evidential burden of proof. The other new offence clauses in the bill, which deal with matters such as manufacturing and possession of vaping goods, broadly follow the same framework as outlined for proposed section 41Q.
2.228 In Scrutiny Digest 5 of 2024 the committee requested the minister’s advice as to why it is necessary and appropriate for the definition of a ‘unit’ of vaping goods (in item 10 of Schedule 1) or the quantity of a kind of vaping goods that would amount to a commercial quantity (item 6 of Schedule 1) to be left to delegated legislation, noting the importance of these definitions to the offence provisions proposed to be inserted by the bill.[206]
2.229 The Minister for Health and Aged Care (the minister) provided an extensive response to the committee’s concerns.
2.230 The minister advised that the definition of a ‘unit’ of vaping goods only has application in relation to the civil penalty provisions of the bill, and that the definition needs to be ‘flexible and adaptable’ to meet the changing public health, scientific, technological and market circumstances.
2.231 The minister further advised that it is a complex process to determine what a ‘unit’ is in relation to each variation of vaping goods and such a determination necessarily requires scientific and medical knowledge of vaping goods as they develop and change.
2.232 The minister advised that it is necessary for the definition of commercial quantity of a kind of vaping good to be determined by delegated legislation to:
• ensure flexibility to change the quantity in light of the prescription practices of health professionals;
• allow the definition to adapt to new product designs and specifications which may affect the type, delivery, volume and concentration of vaping substances;
• target illicit vape trades by allowing efficient amendments; and
• ensure that the commercial quantity flexibly adapts to acceptable or legitimate quantities.
2.233 Further, the minister advised that the medical advice in relation to appropriate quantities of vaping goods for personal use will vary depending on patient circumstances and is evolving. The reasoning behind the amount determined in any instruments made will be set out in the accompanying explanatory statement.
2.234 The minister also provided examples of analogous approaches in comparable legislation.
2.235 Noting that the committee drew scrutiny concerns in relation to strict liability offences and reversals of the evidential burdens of proof to the attention of the Senate in Scrutiny Digest 5 of 2024, the minister provided detailed further context for these offences which is available in the relevant correspondence on the committee’s website.
2.236 The committee thanks the minister for the detailed information as to why it is considered necessary and appropriate for the definitions of a ‘unit’ of vaping goods and a ‘commercial quantity’ of vaping goods to be left to delegated legislation. The committee notes that these definitions relate to areas in which the health and technology advice and requirements are liable to change.
2.237 The committee has generally not accepted a desire for administrative flexibility, or consistency with previous arrangements to be a sufficient justification, of itself, for leaving significant matters to delegated legislation. However, the committee may accept a need for flexibility in circumstances where it is expected that there may be significant technological or other unforeseen developments that require immediate or prompt changes to legislation. This information should be comprehensively included in the explanatory memorandum.
2.238 The committee therefore requests that an addendum to the explanatory memorandum to the bill containing the key information provided by the minister in relation to the prescription of the definition of a ‘unit’ or ‘commercial quantity’ of vaping goods in delegated legislation be tabled in the Parliament as soon as is practicable.
2.239 The committee draws these matters to the attention of the Senate Standing Committee for the Scrutiny of Delegated Legislation.
2.240 In relation to the committee’s scrutiny concerns relating to strict liability offences and provisions that reverse the evidential burden of proof the committee draws the attention of senators to the additional information provided by the minister and, noting that the committee previously left these matters to the Senate as a whole, makes no further comment on this occasion.
2.241 Item 11 of Schedule 1 to the bill would insert proposed section 41RC into the TG Act. Proposed subsection 41RC(1) would empower the secretary to give consent to applications to manufacture, supply or possess vaping goods. Proposed subsection 41RC(2) empowers the secretary to grant an application subject to conditions.
2.242 However, there is no guidance on the face of the bill, nor in the explanatory memorandum, as to what criteria may be considered by the secretary when deciding whether to grant or refuse such an application, or in deciding which conditions to impose, if any. These concerns are heightened noting the relevance of consent granted under proposed subsection 41RC(1) to the offence provisions of the bill.
2.243 In Scrutiny Digest 5 of 2024 the committee requested the minister’s advice as to:
• why it is necessary and appropriate to provide the secretary with a broad power to consent to the manufacture, supply or possession of vaping goods, or to refuse such an application, or grant it subject to conditions; and
• what criteria may be considered by the secretary in making a decision under proposed subsection 41RC(1).[209]
2.244 The minister advised that the broad discretionary power provided to the minister in the consent scheme is necessary and appropriate to ensure all legitimate participants in the scheme along the supply chain have clear lawful authority including in cases where relevant actors do not have ‘a pre-existing license, approval, authority or permit under the Customs Act 1901, TG Act or a state or territory law’.
2.245 The minister further advised that the bill identifies multiple situations where persons involved in the importation, manufacture, supply and commercial possession of vaping goods will have clear lawful authority to do so. The consent scheme is designed to cover other situations, and the broad discretionary power is necessary to deal with such gaps. The minister stated that without a broad discretionary power, a cohort of potential legitimate actors may be inadvertently left without a mechanism to legitimise their relationship with the vaping scheme, and would otherwise expose such persons to regulatory action.
2.246 The minister explained that where a decision not to grant a person consent is made, or a person disagrees with conditions imposed, internal and external merits review and judicial review will be available.
2.247 In relation to the criteria for granting approval the minister advised that these will be set out in a policy document and would be consistent with the objects of the TG Act. The minister provided further detail in relation to the criteria including:
• for manufacture, storage and transport applications, applicants may need to show technical skills, appropriate facilities and resources and that they can meet minimum safety and quality requirements under the TG Act and other laws; and
• applicants may be expected to show their good character to indicate that vaping goods would not be diverted to criminal elements.
2.248 The committee acknowledges the minister’s advice that the consent scheme is intended to deal with gaps in the overall regulatory scheme proposed by the bill and that this is designed to ensure that legitimate actors are not inadvertently exposed to regulatory action. However, it remains unclear to the committee why the power to grant consent could not be subject to appropriate legislative guidance.
2.249 In this light, the committee welcomes the further detail provided in the minister’s response in relation to the criteria that it is envisaged will be imposed for applications made under proposed subsection 41RC(1). The committee notes that as per the minister’s response there appears to exist a well‑developed understanding as to how these applications will be determined. Noting this, it remains unclear to the committee why this important detail is being left to policy guidance as opposed to being set out on the face of the bill. At a minimum, the committee’s view is that basic criteria in relation to resourcing, technical skills, ability to meet safety requirements, and good character tests could be set out on the face of the bill while preserving the ability for further criteria to be set out in delegated legislation.
2.250 The committee therefore requests the minister’s advice as to whether consideration could be given to moving amendments to the bill to provide for appropriate legislative guidance in relation to the granting of consent under proposed subsection 41RC(1), including criteria on resourcing, technical skills, ability to meet safety requirements, and character requirements.
2.251 Alternatively, the committee seeks the minister’s advice as to whether consideration could be given to any other mechanisms by which additional parliamentary scrutiny could be provided in relation to the consent scheme, for instance by providing for relevant factors to be considered in the exercise of the discretion to be set out in delegated legislation.
2.252 Item 51 of Schedule 1 to the bill would insert proposed section 42YT into the TG Act, which would enable the secretary to issue enforceable directions under the TG Act or an instrument made under the TG Act. Proposed subsection 42YT(1) provides that the section applies if the secretary believes, on reasonable grounds, that a person is not complying with the TG Act or TG Act instrument in relation to particular goods, and it is necessary to exercise powers under this section to protect the health and safety of humans. Proposed subsection 42YT(2) provides that the secretary can issue directions to the person requiring the person to take a specified measure, within a specified period and at the person’s own cost, including, for example, to relabel, or label, the goods in compliance with the TG Act or TG Act instrument (paragraph (a)), or repackage the goods in compliance with the TG Act or TG Act instrument (paragraph (b)).
2.253 Proposed subsection 42YT(4) would provide that it is an offence to fail to comply with a notice given under proposed subsection 42YT(2), with a penalty of up to 12 months imprisonment or 1000 penalty units, or both.
2.254 In Scrutiny Digest 5 of 2024 the committee requested the minister’s advice as to:
• the criteria that will be considered by the secretary when determining whether they believe on reasonable grounds that a person is not complying with the Therapeutic Goods Act 1989 or its instruments; and
• whether proposed independent merits review is available for directions issued under proposed subsection 42YT(2) of the bill, and if not, why not.[212]
2.255 In response, the minister pointed to the common law definition of ‘reasonable grounds’ to advise that ‘a decision maker will need to point to facts (such as information or documents) which are sufficient to induce in the mind of a reasonable person that the person is in contravention of the elements of the relevant provision’. Next, the decision-maker will turn their mind to whether the exercise of powers under proposed subsection 42YT(2) is necessary to protect human health and safety, which the minister advises requires a proportionality assessment of the alternative measures available. The minister also referred to the existing powers to issue infringement notices under section 42YT of the TG Act which have no legislated criteria for consideration.
2.256 In relation to merits review, the minister advised that independent merits review is not available of the decision to issue an enforceable notice to ensure that timely enforcement action can be taken to deal with alleged unlawful goods. The minister notes that this approach is appropriate to ensure there is a balance between the protection of health and safety and a right to review of administrative decisions.
2.257 The minister further advised that procedural fairness requirements will apply and provide for a check on the use of this power including an opportunity for the directed person to make submissions, comment on any adverse information provided for, and propose alternative methods to ameliorate the concerns.
2.258 The minister also noted that judicial review is available to a person affected by a decision.
2.259 The committee’s view is that the application of the criteria for making a decision in relation to proposed subsection 42YT(2) is necessarily discretionary. The committee’s preferred position is that independent merits review is provided for any rights-affecting decision of a discretionary nature.
2.260 The committee acknowledges the minister’s explanation of the counterbalancing need for the protections of health and safety and the procedural fairness requirements that will be afforded to affected persons. The committee further acknowledges the constraints upon the secretary in the making of an enforceable direction.
2.261 However, the committee notes that, unlike the decision to impose other administrative penalties, such as an infringement notice, the decision to make an enforceable direction involves a final or operative determination of substantive rights. As such, the committee is of the view that a decision of this nature would ordinarily be subject to independent merits review.
2.262 The committee further notes that, as stated in the Administrative Review Council’s guidelines, What decisions should be subject to merit review?, the availability of judicial review is not ordinarily a reason to exclude merits review, noting that judicial review is complementary to, but distinct from, merits review’.
2.263 The committee therefore requests the minister’s further advice as to the justification for exclusion from merits review of decisions made under proposed subsection 42YT(2) of the Therapeutic Goods Act 1989 with reference to the principles set out in the Administrative Review Council’s guidelines, What decisions should be subject to merit review?
2.264 Item 54 of Schedule 1 to the bill would insert proposed section 52AAA into the TG Act, to empower the forfeiture of things seized by an authorised person under a search warrant. Proposed paragraph 52AAA(1)(b) provides that if the secretary believes, on reasonable grounds, that any of the following criteria have been met, then the thing is forfeited to the Commonwealth:
• the thing has been imported, manufactured or supplied in contravention of the TG Act or its instruments; or
• the thing has been in the possession, custody or control of a person in contravention of the TG Act or its instruments; or
• a requirement under the TG Act or its instruments has not been complied with in relation to the thing.
2.265 In Scrutiny Digest 5 of 2024 the committee requested the minister’s advice as to whether it is intended that use and derivative use immunities apply to materials incidentally seized and retained under proposed section 52AAA of the bill.[215]
2.266 The minister advised that only evidential material may be seized under a section 50 warrant due to section 47 of the TG Act, and the TG Act does not authorise sharing of seized materials between other state and Commonwealth agencies other than for the warrant purpose. As a result, the minister advised that use and derivative use is not applicable to proposed section 52AAA.
2.267 The committee thanks the minister for this response.
2.268 In light of the above the committee makes no further comment in relation to this matter.
2.269 Item 86 of Schedule 1 to the bill seeks to insert proposed subsection 57(1A) into the TG Act. Proposed subsection 57(1A) would empower the secretary to delegate all or any of their powers and functions under Chapter 5A (enforcement), section 52AAA (forfeiture of things seized under search warrant) or section 52AAB (return of retention of thing declared not to be forfeited). The delegation may be to an officer of a Department of State of a State (paragraph (a)), a Department or administrative unit of the Public Service of a Territory (paragraph (b)), or an authority of a State or of a Territory (paragraph (c)).
2.270 However, in relation to proposed subsection 57(1A), the explanatory memorandum states that the delegation is intended to be to the head of the relevant departments and administrative units, as opposed to any officer of these bodies as set out in the subclause itself.
2.271 In Scrutiny Digest 5 of 2024, the committee requested the minister’s advice as to the intended formulation of the delegation in proposed 57(1A) of the Therapeutic Goods Act 1989, with the committee noting its preference for the delegation to be limited to the head of the relevant departments and administrative units.[218]
2.272 The minister advised that the correct formulation of the provision is as per the bill, being that the delegation is to any officer a Department of State of a State, a department or administrative unit of the Public Service of a Territory, or an authority of a State or of a Territory. The minister advised that the explanatory memorandum will be updated accordingly.
2.273 The minister advised that it is necessary for the delegation to be to this level due to the significant volume of enforcement activities that are undertaken by the TGA in the vaping context, and the need for people with varying technical skills to execute enforcement activities. The minister elaborated that:
Such powers are appropriately delegated to experienced and skilled persons who undertake investigations and related regulatory functions. It is anticipated that there may be a number of persons with different technical skills, including forensic data analysts, health officials and police officers, who will have jurisdiction to exercise powers under the applied laws.
2.274 The minister also noted that this delegation framework is consistent with existing regulatory framework in the TG Act, and that delegates would be subject to binding directions as to the exercises of their powers and functions.
2.275 The committee thanks the minister for clarifying the operation of the provision and committing to updating the explanatory memorandum to remove the ambiguity.
2.276 The committee also considers that the explanatory memorandum would benefit from further key information in the minister’s response in relation to why it is necessary and appropriate for the broad delegation to be imposed.
2.277 The committee therefore requests that, in updating the explanatory memorandum to the bill to clarify the operation of the provision, the minister also include the key information contained in the minster’s response in relation to the delegation provided for in proposed subsection 57(1A) of the Therapeutic Goods Act 1989.
[204] This entry can be cited as: Senate Standing Committee for the Scrutiny of Bills, Therapeutic Goods and Other Legislation Amendment (Vaping Reforms) Bill 2024, Scrutiny Digest 6 of 2024; [2024] AUSStaCSBSD 103.
[205] A range of clauses in Schedule 1 to the bill. The committee draws senators’ attention to these provisions pursuant to Senate standing order 24(1)(a)(i) and (iv).
[206] Senate Scrutiny of Bills Committee, Scrutiny Digest 5 of 2024 (27 March 2024) pp.12–15.
[207] The minister responded to the committee’s comments in a letter dated 9 April 2024. A copy of the letter is available on the committee’s webpage (see correspondence relating to Scrutiny Digest 6 of 2024).
[208] Schedule 1, item 11, proposed section 41RC. The committee draws senators’ attention to this provision pursuant to Senate standing order 24(1)(a)(ii).
[209] Senate Scrutiny of Bills Committee, Scrutiny Digest 5 of 2024 (27 March 2024) pp. 16–17.
[210] The minister responded to the committee’s comments in a letter dated 9 April 2024. A copy of the letter is available on the committee’s webpage (see correspondence relating to Scrutiny Digest 6 of 2024).
[211] Schedule 1, item 51, proposed section 42YT. The committee draws senators’ attention to this provision pursuant to Senate standing orders 24(1)(a)(i) and (iii).
[212] Senate Scrutiny of Bills Committee, Scrutiny Digest 5 of 2024 (27 March 2024) pp. 16–17.
[213] The minister responded to the committee’s comments in a letter dated 9 April 2024. A copy of the letter is available on the committee’s webpage (see correspondence relating to ).
[214] Schedule 1, item 54, proposed section 52AAA. The committee draws senators’ attention to this provision pursuant to Senate standing order 24(1)(a)(i).
[215] Senate Scrutiny of Bill Committee, Scrutiny Digest 5 of 2024 (27 March 2024) p. 17–18.
[216] The minister responded to the committee’s comments in a letter dated 9 April 2024. A copy of the letter is available on the committee’s webpage (see correspondence relating to Scrutiny Digest 6 of 2024).
[217] Schedule 1, item 86, proposed subsection 57(1A). The committee draws senators’ attention to this provision pursuant to Senate standing order 24(1)(a)(ii).
[218] Senate Scrutiny of Bill Committee, Scrutiny Digest 5 of 2024 (27 March 2024) p. 18.
[219] The minister responded to the committee’s comments in a letter dated 9 April 2024. A copy of the letter is available on the committee’s webpage (see correspondence relating to Scrutiny Digest 6 of 2024).
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URL: http://www.austlii.edu.au/au/other/AUSStaCSBSD/2024/103.html