27 August 2014
Mark Whitechurch
Chemical Security RIS
Attorney-General’s Department
3-5 National Circuit
BARTON ACT 2600
Chemical.security.RIS@ag.gov.au
Dear Mark,
The Plastics and Chemicals Industries Association (PACIA) is the peak national body representing
the Australian Chemistry Industry. PACIA members include chemical manufacturers, importers and
distributors, logistics and supply chain partners, raw material suppliers, plastic fabricators and
compounders, recyclers and service providers to the sector.
The Australian chemicals and plastics industry plays a critical enabling role, supplying inputs to 109
of Australia’s 111 industries. This means that innovation and growth within the Australian chemistry
industry has a multiplier effect in creating jobs and investment in supply chains across Australia.
The legislative controls for our products and processes are extensive. PACIA is keen to work with
the Government to develop proposals and recommendations for reforming chemical regulation to
an appropriate balance between competing priorities support for innovation and investment and
managing potential risk.
PACIA welcomes the opportunity to provide comment on the Consultation Regulation Impact
Statement (RIS) on Chemical Security: Toxic Chemicals of Security Concern. PACIA members have
been active participants in the development of the risk assessments for these chemicals and the
proposed mitigation measures.
PACIA has long been a leading voice in the development of the effective systems and programs for
security chemicals. The chemistry industry has work proactively with governments and security
agencies over many years and to develop a voluntary Site and Supply Chain Security Guidance and
programs for chemical security. This guidance clearly sets out the roles and responsibilities of
industry, their customers, suppliers and Government in a context relevant to our industry. It assists
PLASTICS AND CHEMICALS INDUSTRIES ASSOCIATION ABN: 77 063 335 615
Level 10, 10 Queen Street, Melbourne, Victoria, 3000 Phone: 03 9611 5400 Fax: 03 9611 5499
PO Box 422 Flinders Lane, VIC 8009 Email: info@pacia.org.au Web: www.pacia.org.au
the industry in improving its security performance and addresses broader business resilience issues
such as critical infrastructure protection and cyber security. The chemistry industry has proactively
addressed the issue of site security and chemical diversion.
PACIA has reviewed this Consultation Regulatory Impact Statement (RIS) and after consultation
with its members supports the proposal to expand the National Code of Practice that currently
applies to the 11 precursors to homemade explosives. The inclusion of awareness raising to
support implementation of this option is also supported.
Please find attached PACIA’s submission on the consultation RIS.
Please do not hesitate to contact me on 03 9611 5412 if you wish to discuss any aspect of this
submission.
Sincerely,
Kathryn Walton
Regulatory Policy Manager
2|Page
PACIA Submission:
Chemical Security – Toxic Chemicals of Security Concern
__________________________________________________
August 2014
PLASTICS AND CHEMICALS INDUSTRIES ASSOCIATION ABN: 77 063 335 615
Level 10, 10 Queen Street, Melbourne, Victoria, 3000 Phone: 03 9611 5400 Fax: 03 9611 5499
PO Box 422 Flinders Lane, VIC 8009 Email: info@pacia.org.au Web: www.pacia.org.au
General Comments
As recognised in the Consultation RIS the 84 toxic chemicals of security concern are chemicals
widely used in Australia by both individuals and businesses. The chemistry industry is aware that
while they can be obtained legitimately for legitimate purposes they can also be misused. The
chemicals and plastics industry has worked closely with governments to develop effective controls
over chemicals that have been identified as being of potential security concern. It must be ensured
that any control measures proposed enhance the security of these chemicals without imposing
undue burden or restriction on their availability for their legitimate uses.
The diverse nature of industry and the wide range of uses of these toxic chemicals of security
concern make the generic application of any risk mitigation measures difficult. Appropriate
guidelines, awareness activities and industry support will be essential to ensure the success of any
risk treatment arrangements.
PACIA members have participated in the extensive risk assessment process undertaken by the
Attorney Generals Department. The results from these risk assessments are intended to underpin
the development of the risk treatment measures by highlighting areas of greatest vulnerabilities.
These clearly showed that vulnerabilities varied across industry sectors and the different supply
chain nodes. It must be ensured that this information is used to target awareness raising and
support to enable consistent and reliable controls to be implemented.
Option Preference
PACIA supports the option of extending the National Code of Practice to toxic chemicals of security
concern.
PACIA believes that the implementation of this option is likely to achieve the best outcome in
managing chemical security risks and be the most cost effective. The code outlines a risk based
approach which acknowledges the different risks, operating procedures and needs of the multitude
of different companies that will have access to and use these substances.
The implementation of the code should ensure that consistent, workable and effective measures
are proposed for all industry sectors and will support a level playing field for all Australian industry
dealing with chemicals of security concern.
The extension of the code will allow greater consistency in controls in the various industry sectors
and supply chain nodes and ensure incompatible requirements are not inadvertently proposed in
the different nodes or for the various chemicals. Due the integrated nature of industry, many
activities across nodes may be undertaken by the one company, and hence the extension of the
code will also allow easier application.
The extension of the National code of practice will not be effective unless it is part of a broader
education program. A targeted awareness program, presented as option 1, to support and
encourage the take up of the proposed treatment measures, will be necessary. The raising of
awareness on the need for concerted effort by industry, government and the community is
essential to ensure the success of any program to prevent the diversion of chemicals of security
concern.
The implementation of these two options is likely to achieve the best outcome in managing security
risks.
Toxic Chemicals – quantities and forms
The National Code of Practice currently gives no guidance on the quantity or the forms of the
chemical that would trigger the need for the application of the code of practice. Many of the
substances covered in the 84 toxic chemicals of concern can be found in products and mixtures
where the substance of concern cannot easily be extracted or is in a form that is not of interest to
terrorist groups. It must be ensured that industry is aware that such a situation, as recognized
during the risk assessment process, would result in the application of the code not being required.
Specific comments
2.1.2 Security sensitive ammonium nitrate
The current inconsistent regulation for security sensitive ammonium nitrate (SSAN) is of great
concern to PACIA. PACIA has lobbied for some time now to have these state based regulatory
regimes reviewed and to ensure they are workable for industry. PACIA supported the COAG
recommendation that the Attorney Generals Department consider these reforms under the
Chemicals Security Management Framework.
PACIA opposes NGAG decision to defer the responsibilities given to the Attorney Generals
Department in relation to SSAN to Safe Work Australia. While PACIA supports and advocates for
nationally consistent legislation for SSAN, PACIA does not believe that the legislative regime being
developed by Safe Work Australia is the appropriate legislation to achieve this objective. SSAN is
not an explosive and capturing it, albeit within a separate section, is inappropriate and sets an
undesirable precedent.
3.5
Rationale for Government intervention
This section states that:
‘This unawareness may arise because:
• most businesses lack the technical knowledge and expertise (relating to the
operational/tactical capabilities and methods of terrorists) to interpret available information
• the cost of obtaining additional information may be prohibitive for some businesses
(particularly small-to-medium enterprises).’
It is unclear as to what costs are being referred to here. Awareness in this area is largely obtained
from government campaigns, the lack of awareness may be seen as a failing of government rather
than industry.
5.1
Proposed Security measures
This section of the consultation RIS states:
‘It is important to note that application of three of the measures (i.e. ‘Theft and Diversion
Procedures’, ‘Physical Access Controls’ and ‘Personnel Access Controls’) would be determined
following a risk assessment process undertaken by the business. ‘
This implies that the other measures need to be applied irrespective of the risk assessment process.
This is not in line with the National Code of Practice, which currently proposes that all the measures
are applied following the risk assessment process. This needs to be clarified.
6.2.2 Security measure benefits
This section of the consultation RIS states:
‘Some stakeholders questioned whether it would be necessary to apply the security
measures to all users of chemicals. For instance, it was noted that some users already had to
meet stringent character and competency requirements (e.g. persons who are permitted to
handle explosives). There may be thus little benefit in requiring these users to adopt the
proposed security measures.’
This statement shows a lack of understanding in relation to the application of the code. A risk
based regulatory code allows the implementation of those measures deemed necessary after a
thorough evaluation of the risks presented. This will vary from workplace to workplace dependent
upon the level of controls currently in place and the resultant risk. If stakeholders are of the view
that all measures must be applied, it could be concluded that the implementation of the code has
not been well defined, nor articulated to those that handle these substances.
Questions
Q1
In the context of the supply chain that uses / handles precursor chemicals, to what extent
are security risks likely to be managed in line with societal expectations in the absence of
government intervention?
PACIA members already have a significant focus on the security risks associated with the
chemicals it manufactures, distributes and uses. However, as with all industry groups, there
is likely to be some variability in the level of proactive responsibility applied and that some
level of government intervention is likely to be required. It is recommended that
Government continue to partner with industry in developing solutions. A key area for
government intervention is in development and implementation of communication
strategies, in support of changes to the availability of toxic chemicals.
Q2
Are there any other options that could achieve the government’s objective in light of the
identified problem?
The options proposed in the RIS are suitable to address the identified problem. Extending
the Chemicals of Security Concern Code of Practice option with supporting information flow
to the general public and businesses identified in the supply chain for the chemicals
provides the best approach without the encumbrance of legislation and regulation.
Q3
To what extent will the options reduce the risk of toxic chemicals of security concern
relative to status quo?
PACIA believes it is difficult to quantify the reduction of risk, particularly when there have
only been a small number of incidents recorded. However implementation of options 1 and
2 will lead to increased security, providing a greater hindrance to terror motivated
individuals and less organised criminal activity.
Q4
If the options are likely to have more than a marginal impact on the risk of criminal use of
toxic chemicals of security concern, will the benefits associated with this risk reduction
outweigh the costs to governments and industry?
PACIA believes it is difficult to accurately estimate the costs in applying the proposed risk
treatment methods. Mature organizations who already have an extensive security and
process safety system in place are unlikely to have significant costs associated with the
implementation of the code. Many PACIA members would be in this position. It is not
possible, however, to know what other sectors have in place or will implement.
Q5
Do stakeholders have any additional comments or information about the likely costs and
benefits associated with the proposed measures?
At this stage no additional costs have been identified by PACIA members.
Q6
To what extent are the cost estimates in relation to the precursor chemicals relevant to
the chemicals that are the focus of the RIS?
PACIA believes that the costs in applying the proposed risk treatment methods appear to be
in line with normal expectations
Q7
To what extent are businesses who handle any of the 84 chemicals already implementing
these measures as a part of good business practice?
PACIA believes that many business with mature management and safety systems would
already have these measures in place. The actual form may vary due to the nature of their
business.
Q8
To what extent are the security measures likely to be effective in helping businesses
manage the security risks associated with toxic chemicals of security concern (including
reducing the risk of individuals or groups using them for criminal purposes)?
PACIA believes that increasing security at businesses with current gaps will reduce the risk of
theft of toxic chemicals from that business, but it is difficult to quantify the effect on the
reduction in risk of use for criminal purposes.
Q9
To what extent are the security measures likely to help businesses prevent, detect, and
deter the illicit purchase of toxic chemicals by people with long term criminal intent?
The extent that these measures will help businesses prevent, detect and deter the illicit
purchase of toxic chemicals is difficult to quantify. The variables for each workplace would
be considerable.
Q10
Are there any practical measures (alternative to the proposed treatment measures) to
address identified risks that this RIS has not considered?
The proposed security measures appear to cover the identified vulnerabilities. The
application of the National Code being based on the identified risks as assessed at the
individual workplace, would not inhibit the use of other practical measures.
Q11
Do stakeholders have any comment or information on the likely costs and benefits of
these options?
PACIA does not have this information.
Q12
The previous RIS found that uptake of the security measures would be higher as a result of
a code of practice than as a result of an awareness raising campaign. Would that also be
the case here?
PACIA believes that supporting the code of practice with a targeted awareness campaign is
essential to assist businesses to understand the reasons and the benefits of introducing the
code. An awareness campaign targeted at the general public would also lead to greater
awareness of suspicious activities and the need for the control measures that will be
instigated.
Q13
Appendix A provides information on the estimated number of businesses/organisations
using or handling toxic chemicals of security concern. These are based on a variety of
assumptions. Are these assumptions reasonable? Are there any other businesses or
organisations that should be included?
It appears that PwC carried out a thorough process in estimating businesses or organisations
from introducer to end user that may handle toxic chemicals of security concern.
Q13
Appendix B provides detailed calculations on the cost of reading and understanding the
code. A key input to this is the number of businesses that are likely to actually be aware of
the code. Are these proportions reasonable?
The calculations appear reasonable however the figures can only ever be considered as a
rough estimate. The variables would be significant, even within each supply chain node, due
the complexity of operations, sophistication of systems and number of substances handled.
Conclusion
PACIA, in consultation with its members, has reviewed the consultation RIS and supports the
extension of the Chemicals of Security Concern Code of Practice, being a single risk based
regulatory code of practice, developed in consultation with industry. To ensure the most effective
implementation of this code of practice to meet the government objectives it must be underpinned
by a targeted awareness campaign for those handling the product and the general public.