HAZARDOUS WASTE PERMITS
COST RECOVERY IMPACT STATEMENT
January 2012 – December 2014
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2011 CRIS for Hazardous Waste Permits
Version Control
Version
0.1
0.2
0.3
0.4
0.5
1.0
Author
Date
Comments
Initial draft for review by Department of
Finance and Deregulation (Finance)
Update following review by Finance
Update following receipt of revised data
Update after 2nd Review by Finance
Certified by Chief Executive Officer of Agency
Agreed by Minister
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2011 CRIS for Hazardous Waste Permits
Table of Contents
1.
OVERVIEW
1.1
1.2
1.3
2.
POLICY REVIEW – Analysis of Activities
2.1
2.2
2.3
2.4
2.5
2.6
3.
Projected Expenses and Revenue
MONITORING MECHANISMS
6.1
6.2
6.3
7.
Cost Recovery Activities
Costs Components
Changes in Cost Base
Volume and Demand Assumptions
Summary of Charging Arrangements
PROJECTED EXPENSES AND REVENUE FOR THE COST RECOVERY IMPACT STATEMENT
5.1
6.
Design of the Cost Recovery Arrangement
Basis of Charging – Fee or Levy
COST RECOVERY MODEL
4.1
4.2
4.3
4.4
4.5
5.
Policy Authority
Partial cost recovery
Legal Requirements for the Imposition of Charges
Description of Cost Recovery Activities
Users and Stakeholders
Conclusion
DESIGN
3.1
3.1
4.
Purpose
Background
Australian Government Cost Recovery Policy
Monitoring Mechanisms
Stakeholder Consultation
Periodic Review
CERTIFICATION
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1.
OVERVIEW
1.1
Purpose
This Cost Recovery Impact Statement (CRIS) is prepared following the Department’s
5 year review of cost-recovery arrangements in accordance with the Australian
Government’s Cost Recovery Policy.
The purpose of this CRIS is to demonstrate the Department’s compliance with the
Australian Government’s Cost Recovery Guidelines in relation to the Hazardous Waste
Permits.
1.2
Background
The Hazardous Waste (Regulation of Exports and Imports) Act 1989 (the Hazardous
Waste Act) and its associated regulations1 enable Australia to meet its obligations
under the Basel Convention on the Control of the Transboundary Movements of
Hazardous Wastes and their Disposal (the Basel Convention). The Basel Convention
regulates the international movements of hazardous wastes.
The Department is responsible for the implementation and administration of the
Hazardous Waste Act through a permitting regime.
Section 32 of the Hazardous Waste Act states that the regulations may prescribe fees,
not exceeding $8,000, to be paid in relation to applications and notices given to the
Minister.
The fees were first prescribed in the Hazardous Waste (Regulation of Exports and
Imports) (Fees) Regulations 1990 (the Fees Regulations). In 1996, when the Act was
amended, the Fees Regulations were also amended.
Fees are charged to recover part of the costs of processing applications for the export,
import and transit of hazardous wastes under the Act.
1.3
Australian Government Cost Recovery Policy
In December 2002, the Australian Government adopted a formal cost recovery policy
to improve the consistency, transparency and accountability of its cost recovery
arrangements and promote the efficient allocation of resources.
The underlying principle of the policy is that agencies set charges to recover all the
costs of a product or service where it is efficient and effective to do so, where the
1






Hazardous Waste (Regulation of Exports and Imports) (OECD Decision) Regulations 1996.
Hazardous Waste (Regulation of Exports and Imports) (Fees) Regulations 1990.
Hazardous Waste (Regulation of Exports and Imports) Regulations 1996.
Hazardous Waste (Regulation of Exports and Imports) Waigani Convention Regulations 1999.
Hazardous Waste (Regulation of Exports and Imports) Decision IV/9 Regulations 1999.
Hazardous Waste (Regulation of Exports and Imports) Regulations 2010.
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2011 CRIS for Hazardous Waste Permits
beneficiaries are a narrow and identifiable group and where charging is consistent with
Australian Government policy objectives.
The Cost Recovery Policy is administered by the Department of Finance and
Deregulation and is detailed in the Australian Government Cost Recovery Guidelines
(Cost Recovery Guidelines).
The policy applies to all Financial Management and Accountability Act 1997 (FMA Act)
agencies and to relevant Commonwealth Authorities and Companies Act 1997 (CAC Act)
bodies that have been notified. In line with the policy, individual portfolio ministers are
ultimately responsible for ensuring agencies’ implementation and compliance with the
Cost Recovery Guidelines.
The Australian Government Cost Recovery Guidelines and the accompanying Finance
Circular can be found at: http://www.finance.gov.au/financial-framework/financialmanagement-policy-guidance/cost-recovery.html
2.
POLICY REVIEW - ANALYSIS OF ACTIVITIES
2.1
Policy Authority
In 2011, the Department refreshed the original policy authority to undertake hazardous
waste permit activities on a partial cost recovery basis. Subsequently, the Australian
Government authorised the Department to charge an application fee for the permit
activities on a partial cost recovery basis consistent with the Government’s Cost
Recovery Policy.
2.2
Partial Cost Recovery
Partial cost recovery arrangements for the activities of the Hazardous Waste Section
that are related to the administration and implementation of the Hazardous Waste Act
were approved by the Minister for Finance and Deregulation, Senator the Hon Penny
Wong, on 15 August 2011 after a portfolio-wide cost recovery review. This approval
was granted on the grounds that the Department continues to absorb the unrecovered
costs of activities under the Act, thus resulting in no fiscal impact on the Budget.
As a party to the Basel Convention since it entered into force in 1992, the Australian
Government has committed to ensuring that hazardous and other wastes are managed
in an environmentally sound manner and that transboundary movements of those
wastes are minimised and are strictly controlled when they are permitted.
Beneficial outcomes for human and environmental health flow from Australia’s
participation in the Basel Convention. The Australian Government is responsible for
ensuring Australia’s obligations under the Convention are met. In doing so, it provides
significant financial resources.
Fees were set in 1996 on the basis of the time required to process an application at
public service rates, then $53 per hour. This level of fees was intended not to inhibit
the regulatory objective, which might arise if the full costs of regulation were charged.
It is desirable that the costs to the commercial sector be reasonable and not
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2011 CRIS for Hazardous Waste Permits
prohibitive, since this could encourage non-compliance which would not be consistent
with environmental or health policy goals.
Obligations under the Basel Convention and the Hazardous Waste Act require that the
recycling, recovery and disposal of hazardous wastes be conducted in an
environmentally sound manner. In cases where Australia does not have the capacity or
infrastructure to undertake these operations in an environmentally sound manner,
export of the waste under permit to a suitable facility overseas may be required. If
permit application and processing fees under the Hazardous Waste Act were set too
high, there could be an increase in less environmentally sound disposal operations such
as landfill, illegal dumping or illicit non-controlled export. These alternatives not only
would impact on human health and the environment, but also could reflect adversely
on Australia’s international obligations to deal with hazardous wastes in an
environmentally sound manner.
2.3
Legal Requirements for the Imposition of Charges
Section 32 of the Hazardous Waste (Regulation of Exports and Imports) Act 1989
provides the legislative basis for the imposition of permit fees.
For the purposes of section 32 of the Act, the prescribed fee for an application or
notice of a kind specified in Column 2 of an item in the Schedule is the fee set out in
Column 3 of that item.
Hazardous Waste (Regulation of Exports and Imports) (Fees) Regulations 1990 Schedule Application and notice fees (regulation 3)
Column 1
Item
1
2
3
Column 2
Application or notice
Basel permits
application for a Basel export permit (other than an
application mentioned in item 2)
application for a Basel export permit:
(a) made within 12 months of the grant of a permit of
the same type; and
(b) in relation to an export proposal of the same type
as the proposal to which the earlier permit relates;
and
(c) the grant of which being:
(i) consequent on the earlier permit ceasing to
be in force; and
(ii) subject to the same conditions
in relation to an application for a Basel export
permit — a notice given in accordance with the Basel
Convention to a foreign country through which the
waste is to be transported
Column 3
Fee $
4,440
420
110
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2011 CRIS for Hazardous Waste Permits
Column 1
Item
Column 2
Application or notice
4
application for a Basel import permit (other than an
application mentioned in item 5)
application for a Basel import permit authorising
hazardous waste to be sent to a facility approved as a
recovery facility under regulation 7 of the Hazardous
Waste (Regulation of Exports and Imports) Regulations
application for a Basel transit permit
application to vary a Basel export permit
application to vary a Basel import permit
application to vary a Basel transit permit
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Special permits
application for a special export permit (other than an
application mentioned in item 12)
in relation to an application for a special export
permit — a notice given to a foreign country through
which the waste is to be transported
application for a special export permit:
(a) made within 12 months of the grant of a permit of
the same type; and
(b) in relation to an export proposal of the same type
as the proposal to which the earlier permit relates;
and
(c) the grant of which being:
(i) consequent on the earlier permit ceasing to
be in force; and
(ii) subject to the same conditions.
application for a special import permit (other than an
application mentioned in item 14)
application for a special import permit authorising
hazardous waste to be sent to a facility approved as a
recovery facility under regulation 42 of the Hazardous
Waste (Regulation of Exports and Imports)
(Organisation for Economic Co-operation and
Development Decision) Regulations
application for a special transit permit
application to vary a special export permit
application to vary a special import permit, (other than
an application mentioned item 18)
application to vary a special import permit authorising
hazardous waste to be sent to an approved recovery
facility
application to vary a special transit permit
Column 3
Fee $
270
210
110
370
210
110
480
110
420
270
210
110
370
210
110
110
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2011 CRIS for Hazardous Waste Permits
2.4
Description of Activities
The Department conducts an assessment of applications submitted by industry under
the Hazardous Waste Act to import, export or transit hazardous wastes through
Australian territory and provides recommendations to the Minister and Departmental
delegates. The two main categories of permits are Basel and Special permits. As a
general rule, Basel permits require a higher level of effort and resources. All permits
are event related and applications are assessed on a case by case basis. They vary in
nature and complexity requiring different levels of Departmental resources to
complete.
In general, applications require legal assessment of insurance and contractual
arrangements as well as complex technical and scientific assessments to ensure the
waste will be transported, managed and disposed of in an environmentally sound
manner in Australia and overseas.
The assessment also includes liaison with state and territory government agencies, the
Basel Convention competent authorities of the country of export or import and the
transit countries.
Some applications may be the subject of objections from industry stakeholders and
decisions may be appealed to the Administrative Appeals Tribunal, thus incurring
further administrative and legal costs.
The permits — which are a form of licensing —establish clear criteria ensuring that only
suitably skilled and licensed companies are issued permits with the prior informed
consent of all countries involved, thereby controlling the transboundary movement of
hazardous wastes and their disposal.
2.5
Users and Stakeholders
The main users of permits are companies involved in the management of wastes.
Stakeholders are more widespread and include non- governmental organisations,
industry representation groups, the environment agencies of the state and territory
governments, and some research organisations.
No recent consultation has been undertaken on the cost recovery arrangements
associated with the permit regime under the Hazardous Waste Act; however, a review
of the Act will be completed during the period of this statement and changes to the fee
structure are possible. If the recommendations of the review include changes to the
fee structure, legislative amendment will be required, which is not likely to reach
completion before the end of 2014.
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2011 CRIS for Hazardous Waste Permits
2.6
Conclusion
The charging of permit fees complies with the principles outlined in the Cost Recovery
Guidelines. It is appropriate and equitable that those individuals and organisations that
apply for a permit meet a portion of the estimated costs of regulation, so as to not
make a disincentive to comply with hazardous waste regulations.
The review of the Hazardous Waste Act is underway and, subject to a process of
stakeholder consultation, may include recommendations relating to fees charged for
permit applications and the cost recovery arrangements.
The implementation of recommendations from that review will be subject to
parliamentary approvals processes.
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3.
DESIGN
3.1
Design of Cost Recovery Arrangement
Permits are event based and involve an assessment as to whether the applicant is
suitably skilled and licensed to properly treat the waste. The fees were set differently
for each type of permit to reflect the resources and effort required for the process. As
indicated by the fee schedule, Basel permits require a higher level of effort and
resources than Special permits; and Export permits are generally more complex in
nature than import permits.
The current fee setting was initially introduced in 1990 and revised in 1996 and was
based on average public service salary rates applicable at that time ($ 53 per hour).
The review of the Hazardous Waste Act may provide recommendations for future fees.
The implementation of the recommendations will be subject to parliamentary
approvals processes.
3.2
Basis of Charging – Fee or Levy
Fees are the appropriate mechanism to recover the costs incurred by the
Commonwealth in administering and regulating the permit activities. Identifying the
applicants of the permits is straightforward as permits are event based, and must be
obtained to enable the transboundary transportation of hazardous waste.
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4.
COST RECOVERY MODEL
4.1
Cost Recovery Activities
The following table summarises the list at 2.3 and sets out the groupings of the
different sorts of activities carried out under the Hazardous Waste Act and their
associated charges.
Table 1: List of Cost Recovery Activities and Associated Charges
Ref
Activity Name
Description
Charge Title
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
4.2
Processing an
application for Basel
export permit
Processing an
application for Special
export permit
Processing an
application for import
permit (Basel or
Special)
Varying an import
permit (Basel or
Special)
Varying an export
permit (Basel of
Special)
Renewing an export
permit (Basel or
Special)
Renewing an import
permit (Basel of
Special)
Compliance Activity
Expenses associated with
processing an application.
Application fee of $4,440 + $110
for each transit
Expenses associated with
processing an application.
Application fee of $480 + $110 for
each transit
Expenses associated with
processing an application.
Application fee of $270 each
Expenses associated with
varying an application.
Application fee of $210 each
Expenses associated with
varying an application.
Application fee of $370 each
Expenses associated with
renewing an application.
Application fee of $420 each
Expenses associated with
renewing an application.
Application fee of $270 each
Expenses associated with a
compliance activity.
No charge
Cost Components
The processing of applications for permits under the Hazardous Waste Act involves
salary costs, the costs of publishing notices in the Australian Government Gazette and,
in some cases, extra costs for legal advice. Applicants also may seek the review of
decisions under the Hazardous Waste Act by the Administrative Appeals Tribunal. In
such cases, the Department incurs the further expense of engaging legal counsel. See
Table 2, Activity Expenses.
Each application requires two to three Gazette notices at an average cost of $400 each.
Legal advice currently is provided by the Australian Government Solicitor; however, this
function is likely to be at least partially provided by the Department’s Legal Section in
the next financial year. It is impossible to predict which applications will require legal
advice, but as an indication, the expenditure by the Hazardous Waste Section on legal
advice in the 2010-11 financial year was $45,884.50.
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Table 2: Activity Expenses
Cost Components
Direct Salaries and On-costs
Activity 1.1: Processing an application for Basel
export permit
Activity 1.2: Processing an application for Special
export permit
Activity 1.3: Processing an application for import
permit (Basel or Special)
Activity 1.4: Processing a variation on import
permit (Basel or Special)
Activity 1.5: Processing a variation on export
permit (Basel or Special)
Activity 1.6: Processing a renewal on export permit
(Basel or Special)
Activity 1.7: Processing a renewal on import permit
(Basel or Special)
Activity 1.8: Compliance Activity
Stakeholder relationship and legal advisory costs
Total Activities Cost per Year
4.3
Jan12-Dec 12
($’000)
Jan13-Dec13
($’000)
Jan14-Dec14
($’000)
Total
($’000)
133
137
141
411
200
257
318
775
233
240
247
720
16
17
17
50
29
30
31
90
66
103
141
310
64
88
113
265
16
46
16
47
17
48
49
141
803
935
1,073
2,811
Changes in Cost Base
Fees for permits should be reviewed so that, in addition to being based on cost
recovery principles, their relative levels do not unnecessarily distort the decision to
send
hazardous
waste
to
either
Basel
or
OECD
destinations.
http://www.environment.gov.au/settlements/chemicals/hazardouswaste/publications/review-response.html
The current fees charged for hazardous waste permit applications do not reflect the
actual costs of processing these applications. As discussed above, requirements for
legal advice and representation for applications are not predictable and vary widely
from case to case. The costs of enforcing compliance with the Hazardous Waste Act are
not recovered.
The review of the Hazardous Waste Act provides the Department with an opportunity
to review not only the fee structure, but also the means by which compliance may be
achieved. Nonetheless, it is likely that there always will be some cost of administering
and implementing the Hazardous Waste Act that is not recovered.
The recommendations of the review of the Hazardous Waste Act may include
legislative amendment. If so, the completion date for this project is not anticipated to
be before the end of 2014.
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4.4
Volume and/or Demand Assumptions
Demand is variable between years based on industry activities, domestic and global
economic outlook and the types of wastes generated. Variability also arises as Australia
develops, or loses, infrastructure to deal with specific types of wastes resulting
respectively in a decrease or increase in permit applications. Further effects will arise
from possible ratification by Australia of new hazardous wastes and their scheduling on
the Hazardous Waste Act that would increase demand. Although it is difficult to
accurately predict how many applications will be received each year, the following
table is based on current trends and industry demands.
Table 3: Volume and Demand Assumptions
Activity Name
Jan12-Dec 12
Jan13-Dec13
Jan14-Dec14
Processing applications.
40 permit
applications
45 permit
applications
50 permit
applications
The above projection of an increase of five permit applications per annum, includes
renewals. It is becoming more common for Australian companies to import hazardous
waste for recovery and disposal operations.
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4.5
Summary of Charging Structure
Historical data suggest that there is a rising trend in the volume of hazardous waste
permit applications received each year, however it is appropriate to set a constant fee
that should account for this demand profile, as shown in Table 4.
Table 4:
Summary of Cost Recovery Arrangement
Activity Name
Method
of
Recovery
Total
Cost of
Activity
(Over 3
years)
Number of
Applications
(Over 3 years)
Cost Recovery
Charge
($’000)
1.1
1.2
1.3
1.4
1.5
1.6
1.7
Processing an
application for
Basel export
permit
Processing an
application for
Special export
permit
Processing an
application for
import permit
(Basel or Special)
Varying an import
permit (Basel or
Special)
Varying an export
permit (Basel of
Special)
Renewing an
export permit
(Basel or Special)
Renewing an
import permit
(Basel of Special)
Compliance activity
Fee for
service
Stakeholder
relationship and
legal advisory costs
Fee for
service
Fee for
service
411
9
775
45
Application fee
of $4,440 +
$110 for each
transit
Application fee
of $480 + $110
for each transit
Application fee
of $270 each
Total Cost
Recovered
for Activity
(Over 3
years)
($’000)
41
26
720
54
15
Fee for
service
50
3
Application fee
of $210 each
1
Fee for
service
90
3
Application fee
of $370 each
1
Fee for
service
310
9
Application fee
of $420 each
4
Fee for
service
265
12
Application fee
of $270 each
3
Budget
Funded
49
Not applicable
Not applicable
0
Budget
Funded
141
Not applicable
Not applicable
0
2,811
135
91
Total fee for
service
91
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5.
PROJECTED EXPENSES AND REVENUE FOR DURATION OF CRIS
5.1
Projected Expenses and Revenue
Table 5: Projected Expenses and Revenue
Ref
1.1
1.2
1.3
1.4
1.5
1.6
1.7
Activity Name
Jan – Dec
2012
Jan – Dec
2013
Jan – Dec
2014
$’000
$’000
$’000
Processing a Basel export permit
Expenses
Revenue
Processing a Special export permit
Expenses
Revenue
Processing an import permit (Basel or Special)
Expenses
Revenue
Varying an import permit
Expenses
Revenue
Varying an export permit
Expenses
Revenue
Renewing an export permit
Expenses
Revenue
Renewing an import permit
Expenses
Revenue
Compliance Activity
Expenses
Revenue
Stakeholder relationship and legal
advisory costs
Expenses
Revenue
Total Expenses
Total Cost Recovery Revenue
Budget Funding
Operating Balance +/-
Total
$’000
133
14
137
14
141
14
411
42
200
7
257
8
318
10
775
25
233
5
240
5
247
5
720
15
16
0.3
17
0.3
17
0.3
50
0.9
29
0.3
30
0.3
31
0.3
90
0.9
66
0.8
103
1.2
141
1.6
310
3.6
64
0.8
88
1.0
113
1.3
265
3.1
16
0
16
0
17
0
49
0.0
46
0
803
28
775
0
47
0
935
30
905
0
48
141
0
0.0
1,073 2,811
33
91
1,041 2,721
0
0
* The projected expenses are derived using the estimated application numbers, as
indicated in Table 3, and historical data with the direct salary component being indexed
at 3% per year as anticipated in new Enterprise Agreement.
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2011 CRIS for Hazardous Waste Permits
6.
ONGOING MONITORING
6.1
Monitoring Mechanisms
Cost recovery revenue will be reported in the Department of Sustainability,
Environment, Water, Population and Communities Annual Report in accordance with
the Finance Minister’s Orders.
The operation and performance of the Hazardous Waste Act, including cost recovery
arrangements is being reviewed and will provide an opportunity to recalibrate the cost
drivers and fees for the hazardous waste permit activities.
6.2
Stakeholder Consultation
The review of the Hazardous Waste Act will involve stakeholder consultation. It is
possible that the recommendations of the review may include legislative amendment,
and so, the completion of this project is not expected before the end of 2014.
6.3
Periodic Review
In accordance with the Cost Recovery Guidelines, the policy will be reviewed within
two years from the year of the proposed amendments, noting the broader review of
the Hazardous Waste Act occurring within the next 18 months.
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2011 CRIS for Hazardous Waste Permits
7.
CERTIFICATION
I certify that this CRIS complies with the Australian Government Cost Recovery Guidelines.
[Signed 13/1/2012]
Malcolm Thompson
A/g Secretary
Department of Sustainability, Environment, Water, Population and Communities
Date:
13 January 2012
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