Our powers and the enforcement measures we can take
How we manage non-compliance
Assessment and prioritisation of non-compliance
Contraventions of the IC Act may range from relatively minor, inadvertent non-compliance through to more serious deliberate or negligent contraventions. We assess all referred instances of non-compliance to determine the most appropriate response and use of our resources.
Based on the information available to us at the time of referral, an issue will be assessed and case managed according to its relative severity. Factors we consider in determining the relative priority of a matter include (but are not limited to):
- the risk posed by the introduction of the subject chemical
- the offending entity’s willingness to comply
- the compliance history of the entity involved
- how the issue relates to the objects and intent of the IC Act
This prioritisation means we can efficiently manage large numbers of less serious offences through administrative mechanisms (low-priority cases) and devote resources to investigating serious non-compliance (high-priority cases).
Focus on corrective and preventive measures
In most cases we will focus on assisting the entity in resolving any non-compliance and preventing future non-compliance. We expect the entity to provide written advice explaining the details of the non-compliance and submit a plan to resolve the issue.
This administrative approach to non-compliance may be appropriate for self-reported breaches where the contravention is unintentional and there is a low risk of harm to human health or the environment.
Where efforts to negotiate compliance are unsuccessful, we will reassess the issue and consider formal enforcement options in order to compel the entity to comply.
Business consequences of non-compliance
A person or entity that is non-compliant with the IC Act will incur business costs independent of any penalty or sanction we may impose. Non-compliant entities must stop introducing and supplying any illegally introduced industrial chemicals - which may mean they’re unable to honour contractual obligations to provide certain products to customers. Re-export and disposal of illegally introduced chemicals will also incur additional costs.
A person in beach of the IC Act may offer a written enforceable undertaking to our Executive Director promising to take certain actions to resolve the current contravention and/or prevent future similar instances of non-compliance. The enforceable undertaking allows an entity in breach of the IC Act to offer effective remedies as an alternative to formal enforcement action, while protecting human health and the environment from the potential harmful effects of the introduced industrial chemicals. In the enforceable undertaking, the entity must acknowledge that they were responsible for an act or omission that was - or was likely to amount to - a breach of the IC Act.
We will not accept enforceable undertakings in all circumstances; for example if we are not satisfied of ongoing compliance with the undertaking, or where the enforceable undertaking will unduly burden or is disproportionate to the alleged breach.
Formal investigation activities are normally reserved for high-priority cases that seriously contravene the IC Act. We can also investigate cases in collaboration with other government agencies in matters relating to industrial chemicals and their use.
Our investigations consist of formal evidence-gathering and information-collation activities where we suspect or identify serious non-compliance and formal enforcement is the likely outcome. Our investigations can also result in preventive action or referral to other government agencies.
Our investigations focus on contraventions of the IC Act and related offences against the Criminal Code that relate to the IC Act, including:
- providing false and misleading statements or documents
- interference with warrant execution
We manage our investigations in accordance with the Australian Government Investigation Standards.
AICIS inspectors may enter any premises (either with consent or under an investigation warrant) for the purposes of obtaining evidential material relating to a provision of the IC Act (or related offences under the Crimes Act 1914 or the Criminal Code). AICIS inspectors may exercise powers under the Regulatory Powers Act and the IC act including:
- searching of premises
- seizing evidential material
- operating and seizing electronic
- equipment securing electronic equipment
Investigation warrants may be executed in conjunction with officers from Commonwealth and State and Territory agencies and law enforcement organisations, as required. It is an offence to hinder the execution of an investigation warrant.
An injunction is a court order directing a person or entity to do a specific or, more commonly, to not do a specific thing. Under the Regulatory Powers Act, we can apply to a court for an injunction preventing a person from contravening a provision of the IC Act (restraining injunction) or compelling a person to comply with a certain provisions of the IC Act (performance injunction) if the person refuses or fails to comply.
Injunctions may be used on their own or in addition to other formal enforcement options such as an infringement notice, civil prosecution or cancellation of an entity’s AICIS registration.
A person or entity that fails to comply with an injunction may be liable for contempt of court.
We use infringement notices to address certain contraventions of the IC Act without resorting to prosecution or civil litigation. The Regulatory Powers Act creates an administrative framework for AICIS infringement officers to issue infringement notices where there is reasonable belief that a person has contravened the IC Act.
Infringement notices are used to manage strict liability offences under the IC Act that are less serious and where the contravention is such that AICIS can easily assess the offence. Strict liability applies to all offences under the IC Act, including:
- where a person introduces industrial chemicals without being registered
- where a person introduces industrial chemicals without authorisation
In cases of serious non-compliance, we may apply to the court for a civil penalty order. A civil penalty is a pecuniary penalty imposed by courts exercising a civil rather than criminal jurisdiction. A civil penalty is a debt owed to the Commonwealth, enforceable through civil debt proceedings, and can be a judgment debt. Where a person fails to pay the amount specified in the order, we may commence legal proceedings against the person named in the order to recover the amount owed.
Unlike criminal penalties, civil penalties do not include criminal convictions or imprisonment. The standard of proof in civil penalty proceedings is at or above the 'balance of probabilities' — as opposed to the higher 'beyond reasonable doubt' burden of proof for criminal prosecutions. Civil penalty provisions apply to all offences under the IC Act and may exceed $500,000 for a corporation.
Criminal prosecution is reserved for the most serious contraventions of the IC Act. Where non-compliance is deliberate, repeated or poses serious risk to human health and the environment, we may prepare a brief of evidence for consideration by the Commonwealth Director of Public Prosecutions (CDPP).
In deciding which matters to refer to the CDPP, we will consider the prosecution policy of the Commonwealth, which outlines two factors that must satisfy the CDPP before starting a prosecution:
- whether there is sufficient evidence to prosecute the case
- based on the facts of the case, whether the prosecution would be in the public interest
In determining whether sufficient evidence exists to prosecute a case, the CDPP must be satisfied that there is prima facie evidence of the elements of the offence and a reasonable prospect of obtaining a conviction.
If there is sufficient evidence to justify starting or continuing a prosecution, the CDPP must then consider whether it’s in the public interest to pursue a prosecution. The public interest factors to be considered will vary from case to case, but may include:
- the seriousness or relative triviality of the alleged offence
- the passage of time since the alleged offence
- the availability and efficacy of any alternatives to prosecution
- the prevalence of the alleged offence and the need for general and personal deterrence
- the likely length and expense of a prosecution
Cancellation of registration
We may cancel an introducer’s registration if they have been convicted of an offence or subject to a civil penalty under the IC Act. Additionally, if a person gives information relating to an AICIS registration that is false or misleading this can also be grounds for a decision to cancel a registration.
The decision to cancel a registration may take place alongside other formal enforcement options available under the Act. Without a registration in place, an entity is unable to legally import or manufacture industrial chemicals. An entity that continues to introduce industrial chemicals after the cancellation of its registration will be investigated for contravening section 13 of the IC Act. Penalties of up to $555,000 apply (per introduction).
Transitioning to AICIS
The IC Act provides additional pathways for introducing industrial chemicals compared to those provided under the ICNA Act. The lawful introduction of these chemicals, however, requires a significantly higher level of detail with regard to record-keeping obligations, pre-introduction reporting, and compliance declarations.
Where there is a significant change in introduction obligations, the Industrial Chemicals (Consequential Amendments and Transitional Provisions) Act 2019 provides extra time so that introducers can transition to the new requirements from 1 July 2020. This supports our approach to compliance management by encouraging voluntary compliance with regulatory requirements.
Transitional arrangements include:
- allowing the continued introduction of unlisted chemicals under sections 21(4) and (6) of the old law (the ICNA Act) until June 2022
- deferring annual declaration (s99) obligations until November 2021
- deferring post-introduction declaration (s96A) obligations until November 2021
During the transition period, we will focus on providing guidance and ensuring regulated entities understand and are able to comply with the new legislation. We will base our response to any non-compliance we identify on the entity’s compliance history under the old scheme.
Where equivalent obligations exist across the ICNA Act and the IC Act (for example, registration) we will apply standard compliance responses in line with our case-prioritisation principles.
Unregistered lobbyists and foreign influence
We uphold the Commonwealth’s Lobbying Code of Conduct and the Foreign Influence Transparency Scheme legislation. Our officers will identify, investigate and seek to disrupt illegitimate lobbying or attempts to influence our activities. Unregistered lobbyists and/or foreign principals seeking to influence statutory processes and AICIS compliance activities can expect to be referred to the Attorney General’s Department or Australian Federal Police for further investigation.
Unregistered lobbyists or foreign principals may also be referred to state and territory misconduct and integrity agencies.
The Attorney-General’s Department has more information about the Australian Government Register of Lobbyists, the Lobbying Code of Conduct and the Foreign Influence Transparency Scheme.
The examples of public interest factors have been reproduced directly from the Prosecution Policy of the Commonwealth