On behalf of Mr Jihad Dib: I move:

That this bill be now read a second time.

The Government is pleased to introduce the Environmental Legislation Amendment (Hazardous Chemicals) Bill 2024. The bill proposes changes to the State's environmental laws to strengthen the regulation of industrial chemicals in New South Wales. The proposals in the bill will align New South Wales with new national standards that are being rolled out across Australia to protect our land, air and water from the environmental risks of industrial chemicals. The Industrial Chemicals Environmental Management Standard is a new national approach for managing the import, use and disposal of industrial chemicals. IChEMS will deliver more consistent regulation across jurisdictions and make it easier for industry to choose and use less harmful chemicals. It will help reduce the risk of chemical contamination and pollution, and strengthen our ability to respond to emerging environmental threats posed by industrial chemicals.

The proposed reforms will be backed by new powers for the Environment Protection Authority to require users and manufacturers of specified chemicals to notify and provide information about their chemical use. That will give the Government greater visibility of emerging problem chemicals so it can better protect the community from the adverse impacts of industrial chemicals. The bill will also simplify the regulation of industrial chemicals by transferring relevant powers from the Environmentally Hazardous Chemicals Act 1985 to the Protection of the Environment Operations Act 1997. The Environmentally Hazardous Chemicals Act 1985 will then be repealed. That will make it easier for businesses that use industrial chemicals to fulfil their regulatory responsibilities to prevent environmental harm. Finally, the bill makes necessary machinery amendments to the Protection of the Environment Operations Act 1997 to reflect that its mandate will extend to industrial chemicals.

The Government's proposed approach to implementing IChEMS has been informed by discussions with other States and Territories, which have all committed to implement IChEMS in their own jurisdictions. The discussions have highlighted best‑practice approaches. The Environment Protection Authority has consulted with other government agencies and led a formal public consultation process in October and November 2023. I thank everyone who provided feedback on these important reforms. Currently more than 40,000 industrial chemicals are able to be used in Australia. Most of those chemicals do not pose a significant risk to people or the environment. But some, if not managed responsibly, can in endanger ecosystems and affect human health. That is because they are toxic to living things and do not readily break down in the environment. There can also be significant economic consequences associated with cleaning up and remediating contaminated sites.

Strong, enforceable and modern legislation is needed to safeguard our communities and environments and manage the risks of industrial chemicals. The bill is another example of the Government's commitment to protecting our unique environment and the community from the harmful effects of pollution and contamination, just like our landmark radiation control reforms last year. I now turn to the provisions of the bill. Schedule 1 [11] to the bill amends the Protection of the Environment Operations Act 1997 to implement IChEMS in New South Wales. IChEMS was developed by Commonwealth, State and Territory governments in response to recommendations by the Productivity Commission that identified a gap in the national environmental risk management of industrial chemicals. Under IChEMS industrial chemicals are listed on the IChEMS register in one of seven schedules, based on an assessment of their environmental risk.

The register outlines specific measures and controls to manage the risks posed by industrial chemicals, providing clarity for industry as to what needs to be done to prevent harm to the environment. Where risks cannot be controlled through risk management measures, the IChEMS register may prohibit or restrict the import, manufacture or use of a chemical. All Australian jurisdictions have agreed to implement IChEMS through their own environment protection frameworks. That will, for the first time, harmonise industrial chemical environmental risk management across Australia. In New South Wales IChEMS will ensure that the highest risk chemicals are more tightly regulated or phased out. The bill proposes to apply IChEMS to form the New South Wales IChEMS register. That means that the classification of chemicals listed in the Commonwealth IChEMS register will automatically apply in New South Wales, along with any risk management measures or other controls listed for the chemical.

However, should the need arise, regulations will be able to modify the New South Wales IChEMS register, such as varying the schedule in which a chemical is included or omitting a Commonwealth scheduling decision. If there is a need to address a specific concern in New South Wales, the bill will also allow for a chemical to be added to the New South Wales IChEMS register. That will ensure that we can respond appropriately to any unique or intrinsic issues specific to New South Wales in relation to an industrial chemical and can act ahead of the national regulatory bodies if needed. All users and manufacturers of a chemical listed on the New South Wales IChEMS register will be required to comply with the risk management measures or controls specified for that chemical. Most chemical users and manufacturers will simply need to follow the outcome‑based risk management measures on the New South Wales IChEMS register. Businesses will have flexibility in how they meet any risk management measures, except for the high‑risk chemicals.

Failure to comply with the risk management measures specified in the IChEMS register for a chemical will constitute a pollution incident under the Protection of the Environment Operations Act 1997. That then allows the appropriate regulatory authority, usually the Environment Protection Authority or local council, to issue a prevention notice with associated penalties including daily penalties for noncompliance. If necessary, the appropriate regulatory authority may also issue a clean‑up notice requiring the chemical user or manufacturer to take specified clean-up action. The Commonwealth has already begun scheduling chemicals in the IChEMS register with more to be added over time. Members may be interested to know that in December 2023 the Commonwealth scheduled three high-priority PFAS chemicals on schedule 7 of IChEMS to come into effect over time. This means that the importation, manufacture and use of these PFAS chemicals will be phased out under IChEMS. Some PFAS chemicals are recognised globally as chemicals of high concern that can cause serious or irreversible harm to the environment. The reforms set out in this bill will support New South Wales to cooperate in the national approach to the management of PFAS.

Industrial chemicals of greatest environmental concern, such as PFAS, will be listed on schedule 6 or schedule 7 to the New South Wales IChEMS register. These chemicals are likely to cause serious or irreversible harm to the environment. For this reason, the bill proposes that users of industrial chemicals listed in schedule 6 or schedule 7 will require a licence from the Environment Protection Authority if the use or manufacture of the chemical is subject to a restriction or risk management measure in the New South Wales IChEMS register and they are undertaking an activity regulated under the Protection of the Environment Operations Act 1997. This will ensure that the Environment Protection Authority can closely and consistently regulate the use of any high‑risk industrial chemicals where they cannot be phased out.

The bill creates new offences of doing a thing in relation to an industrial chemical that is prohibited by the New South Wales IChEMS register and failing to comply with phase‑out conditions imposed on a licence. The offences may attract large penalties of up to $500,000 for an individual and $2 million for a corporation. For every day that the offence continues, individuals may face penalties of up to $60,000 per day and $120,000 per day for corporations. These penalties are comparable to other serious land pollution and waste offences in the Protection of the Environment Operations Act 1997. New division 2 of part 9.3E in schedule 1 to the bill seeks to enhance the Government's oversight of emerging problem chemicals. There is currently very little information available about what chemicals are being used in New South Wales. This is simply not good enough. The bill addresses this by amending the Protection of the Environment Operations Act 1997 to enable the Environment Protection Authority to issue a chemical use notice in the Government Gazette.

A chemical use notice will require chemical manufacturers and users to notify and provide information about their use of a specified chemical. It may be issued in a number of circumstances, including where the Environment Protection Authority is of the opinion that the chemical presents a potential risk of harm to human health or the environment. The proposed reform will enable the Environment Protection Authority to identify and communicate with chemical manufacturers and users directly, regardless of whether they hold an environment protection licence. Importantly, the proposal will provide greater visibility as to where, how and in what quantities certain chemicals are being used in New South Wales. This will enable the Environment Protection Authority to assess the need for action to protect the community and our environment from environmental threats posed by chemicals. It will be an offence for a person to fail to comply with a chemical use notice.

New divisions 3 to 5 of part 9.3E in schedule 1 to the bill propose to transfer key provisions from the Environmentally Hazardous Chemicals Act 1985 to the Protection of the Environment Operations Act 1997. Subsequently, the Environmentally Hazardous Chemicals Act 1985 will be repealed. One Act will provide the legislative requirements relating to industrial chemicals and the implementation of the IChEMS reforms. This will make it easier for businesses that use industrial chemicals to comply with their regulatory responsibilities. All chemical users and manufacturers will be licensed under one piece of environmental legislation, removing the need to hold two licences under two different Acts. This will reduce costs on businesses in New South Wales.

As part of modernising the regulation of industrial chemicals, the bill aligns the maximum penalties for failing to comply with the chemical control order with those under the Protection of the Environment Operations Act 1997 for contravening the licence conditions. The proposals set out in this bill will support New South Wales to cooperate in the national approach to industrial chemical risk management under IChEMS. The Government's approach to implementing IChEMS is common sense and risk based, with regulatory oversight increasing with the level of potential environmental hazards. Our focus is on managing the use of the most high‑risk chemicals—those that have the potential to cause significant or irreversible damage to our unique environment. This bill has been years in the making. It follows recommendations by the Productivity Commission, extensive collaboration with our interjurisdictional counterparts and involvement from various stakeholders. I commend the bill to the House.