ACT News


Cosmetic changes: lobbyists switch tactics in chemical regulation push

After pushing for a decade to make it easier to use chemicals – and getting what it wanted – why is the cosmetics industry changing its tune?

It was a "potential circuit-breaker": a policy to appease industry and end years of inertia on chemical regulation reforms.

Part of the Coalition's 2013 push to cut red tape, it would see Australia's chemical regulator, among others, recognise overseas scientific assessments on the substances, to help stop duplication.

It was "readily applauded" by the cosmetics industry at the time, coming as it did as part of a broader changes to Australia's industrial chemical assessor, which The Canberra Times reported yesterday has prompted concerns for public health and the environment.

But more than two years on, one of the most vocal agitators for reform has completed an about-face, and instead demands the "status quo" be retained.

As Parliament prepares to debate the changes later this year, several industry and community groups are pushing hard behind the scenes to secure the best outcome, although one group is likely to push harder than any other.

That group, Accord Australasia, had been lobbying the federal government Canberra for 10 years for just such an outcome, as part of its calls for wider reforms to the National Industrial Chemicals Notification and Assessment Scheme.


But, in June last year, the quiet Sydney outfit urged the government to abandon the very reforms it had pushed for all that time.

It maintains that its members – about 100 firms, including global brands such as L'Oreal, PZ Cussons, Revlon, Unilever and Kimberly-Clark – should be subject to "minimum effective regulation".

Public affairs manager Craig Brock says the change of heart is partly due to concerns the scheme's director would be given too much power, and the changes might not deliver in full the Coalition's promises.

But close observers say Accord's pivot is just the latest turn in a decade-long deregulation campaign that has ranged across the courts, government departments and political spheres.

That effort, National Toxics Network campaigner Jo Immig believes, has shifted the political priorities from protecting the public and environment to reducing the burden on industry, despite regulators' genuine efforts to find the balance.

"This is changing the frame [of debate] and the regulator just has to sit there and defend itself and justify its actions to the industry, who's got the whip hand because they've got the government policy onside," she says.

"[They're] saying anything that smacks of unnecessary regulation, we'll be jumping all over you."

The genesis of the changes is found in a 2006 COAG decision to label plastics and chemical laws a "regulatory hotspot" ripe for change: a complex regulatory system through which industry needed a surer path to get products to market.

It led to a 2008 Productivity Commission report, urging simplification and a greater focus on "risk-based regulation" to smooth industry's way and target government efforts at the riskiest chemicals.

Yet despite the report, little in the way of outcomes for industry eventuated for years – the then Labor government had more pressing political issues to attend.

As backbench leadership murmurings took hold; the lobbyists' concerns about a "slippage" in the reform agenda gave way to a sense it was "languishing" with bureaucrats, Accord's executive director Bronwyn Capanna wrote in her annual reports.

By 2011-12, she wrote reform had "either stalled or become stuck in a cycle of review-and-report", "free of the most critical step – effective implementation".

As the 2013 election bore down, Accord's attention turned to the Coalition and its deregulation taskforce – change was in the wind.

While it worked the political channels, the cosmetic industry also awaited the outcome of a key case Accord brought against the scheme's director, challenging part of the scheme's basic purpose; the ability to impose conditions on chemicals to protect public health and the environment.

The case stemmed from the 2007 shifting of cosmetic regulation from the Therapeutic Goods Administration to the scheme.

Due to the changes, 11 refined natural products used in cosmetics were facing fresh conditions on their use, after the scheme's scientists found some may pose risks to the environment and others could be potential endocrine disruptors.

In July 2014, the Administrative Appeals Tribunal delivered a mixed result for both parties. It found the new conditions should be removed from four chemicals, but also affirmed new conditions on the other seven, and recommended further analysis of all chemicals.

But the case also, to industry's detriment, upheld the scheme's basic purpose, finding that "a cautious approach [by the scheme] is prudent and, in our view, correct".

By that time, Accord's political lobbying had intensified, meeting with MPs on both sides of politics with responsibilities that could help the sector.

But it would take a meeting with a young Sydney backbencher before any MP would take up industry's cudgel on the floor of parliament. In March 2014, Liberal backbencher Craig Laundy stood in the House of Representatives to tell a story about "the day rolled oats became a dangerous chemical".

He spoke of a cosmetics company trying to import a new product which included "rolled oats", which were deemed an "industrial chemical" by the scheme's director and would need to be assessed. The anecdote, Laundy said, highlighted how silly red tape and regulation was.

Engaging as the story was, Laundy's anecdote was not his own: it dated back to 2008 and was oft-used by industry as an example of "over-regulation". Laundy had learned of it during a February 2014 meeting with industry figures and Accord, which Capanna later wrote resulted in his "parliamentary speech on 'regulation gone mad' focussing on [sic] cosmetic over-regulation example' ".

Fairfax Media makes no suggestion of impropriety by Laundy or Accord and its representatives.

But the use of the anecdote in the speech illustrates the close proximity of relationships between some legislators in Canberra and those seeking their ear. Laundy's spokesman sent a written statement in response to Fairfax Media's questions for this report.

A spokesman for Laundy, who is now the Assistant Minister for Industry, says that, as an engaged local member, he consults widely with stakeholders, including constituents, business owners, advocacy groups and industry associations.

In another speech in October that year, Laundy reiterated the anecdote, telling the House he was trying to promote a complete change in culture in the bureaucracy.

"Ministers must continue to challenge their departments to streamline existing regulation and introduce future regulation in a way which makes the cost of complying as minimal as possible, so that profit can be as large as possible and so can our share," he said.

Two weeks earlier, in a different part of the same building, then prime minister Tony Abbott announced the "accepting trusted international standards" policy – under Malcolm Turnbull, it is rebadged part of the "innovation agenda" – Accord hailed the move.

It was, Capanna wrote, "a gem of a policy, a potential circuit-breaker to the policy gridlock of the previous years". But, she warned, the looming challenge would be putting the policy into practice.

"There are some who may consider this not a great time in politics for the pursuit of essential reform," she wrote. "Well, not so Accord."

But as the details took shape – a greater focus on post-market audits among other efforts to balance the fall in up-front oversight – Accord switched tack.

Brock said the group was greatly concerned cosmetics would continue to be regulated in a similar way to heavier industrial chemicals, despite much lower concentrations in final product formulae.

For the scheme's part, director Brian Richards maintains that while the outright hazards of chemicals used cosmetics can be lower, the human exposure is much greater the those used only in industrial settings, the risk of a chemical is a function of 'hazard versus exposure'.

In May last year, Accord called for the abolition of the cosmetics standard, which would leave the Australian Competition and Consumer Commission as the only oversight agency of newly imported cosmetics.

By June, it voiced its desire for the reforms it had pushed for for several years to be outright abandoned in favour of the "status quo". "We believe that cosmetics are [already] quite heavily regulated by the ACCC under the product safety regime that it operates and we think that cosmetic ingredients could be exempted and put through NICNAS without them being looked at in a major way," Brock said.

The pivot did not go unnoticed, prompting Richards to order an extensive review of the lobby group's submissions dating back to 2008. He says the review found that what the scheme was delivering was pretty much what Accord were originally asking for.

"[But] now we're delivering that, they're upping the ante," he says. "So they want a deregulatory outcome, rather than a lower regulatory outcome."

While the details will likely emerge in regulations at least a year after the legislation is debated, Brock is keen to dispel public health concerns about the changes.

"I think that people who have those concerns are probably looking at past practices. The industry is very responsible nowadays. These are consumer goods and if there are problems ... it immediately becomes something everyone is alerted to through social media," he says.

But he says that if there were chemicals approved overseas, it would be good to have them on the Australian market. "There's always this view we see sometimes – and they use the word 'flooding in' and whatever else – [but] I mean, the amount of these chemicals is not all that large."

The real political fight is yet to begin, and regulars on Capital Hill can expect to see more of the industry's lobbyists. "We will be pushing for a sensible, bipartisan approach to this matter," Brock says.