The current hazardous substance management system has elements that do not add to the protection of the environment, and the health and safety of people and communities. Three areas of inefficiency have been identified with the current approval process and management system:
Situation
- a complicated and costly approval process for substances used in a low risk manner;
- duplication of work for ERMA and multiple applicants to get individual approvals for similar products; and
- costs of the approval system relative to the NZ market for hazardous substances.
We describe each area in turn below. In each case we recommend that MfE work up the proposals in more detail for consideration by ministers and public consultation in October 2003.
New method to transfer notified toxic substances
There are an estimated 70,000 notified toxic substances (NoTS)3 that need to be transferred into the HSNO controls.4 We propose that the low risk pathway and the generic approvals pathway described below will both simplify the transfer process, and allow ERMA to set up the HSNO system so that a minimum number of new substances will actually require a HSNO approval.
3. Notified toxic substances are substances that were notified under the Toxic Substances Act. Some of these substances have no controls on their use to manage their potential adverse effects.
4. ERMA currently has about 217,000 notified toxic substances on their books but estimate there are only actually 70,000. ERMA proposes a reconfirmation process to reduce the 217,000 down to 70,000 by removing double ups and non-hazardous substances. About 50 people notified about 60% of the 217,000.
Situation – not risk based
Risk from hazardous substances is a combination of two factors, hazard and exposure. Exposure routes are primarily determined by the quantity and nature of use. There are many cases where the risks posed by a substance are mitigated because of how it is used or the quantities it is used in. ERMA has processed several substance applications where ERMA considered the risks posed by the substance to be very low and as such did not warrant individual consideration by ERMA.
An example is a veterinary medicine which has a high hazard classification. It is sold in pre-packaged, labelled 30 mL syringes, only vets can use it and it is metabolised by the animal it is injected into. This situation poses a low risk to people and the environment.
How – risk based
We propose that ERMA be given an additional tool or means to assess low risk applications in a quicker and less resource intensive manner than the two5 current pathways for release provide for. This process can be summarised as follows:
| Hazard x exposure | High risk | Approval via full approval or rapid assessment process. |
| Hazard x exposure | Low risk | Substance processed by a largely automatic path to get controls.6 |
| Non-hazardous and excluded substances | Negligible risk | No regulatory control. By definition outside the scope of HSNO. |
The key will be in determining what constitutes low risk. There are overseas precedents but they need some work. If this proposal is accepted the MfE and ERMA will need to work up a detailed description for further consideration and consultation.
5. Full assessment includes public consultation and a decision by the ERMA Board. Rapid assessment is a quicker process where the Chief Executive is delegated the power to approve the substance and there is no public consultation.
6. The ERMA would set out what controls apply to groups of substances without receiving an application. The process could be automatic, where an importer or manufacturer simply notifies ERMA that they intend to use a substance and state that they will abide with the controls that automatically apply.
Situation – individual approvals for similar products
Currently most approvals are for narrowly defined substances. As a result multiple approvals are required for similar products. This is because applicants currently define what a substance is and most, for competitive reasons, prefer to define a substance in such a way that it is difficult for competitors to use ‘their’ product’s approval.7 This means more work and expense for ERMA and applicants. A way to remove some of this redundancy is via “generic substance approvals”.
7. Except for innovative agricultural compounds, approvals are not personalised and can be used subsequently by other parties.
How – use ‘generic’ approvals
Under HSNO, a substance can be defined broadly so that a single substance approval covers multiple products or groups of products. By defining substances broadly, hazardous products can be grouped and the total number of approvals minimised. This would reduce the scale of the transfer process, the number of new substance applications and the long-term costs of administering the HSNO system. Additionally, many new products would already be covered by a substance approval if sufficiently strategic definitions were developed for transfer.
A solution is for ERMA (rather than applicants) to define HSNO substance definitions. To introduce a new product, importers or manufacturers could either self-determine whether their product is covered by a HSNO substance definition or provide ERMA with sufficient information to carry out a determination. If the product is covered by an existing ‘substance’ definition, ERMA would provide the applicant with a HSNO identifier and refer the applicant to relevant controls.
If the product was not covered by an existing ‘substance’ definition, ERMA could recommend the appropriate approval route. This could be via Part V for an ‘individual’ substance approval, which may be relatively costly for the applicant, or via a form of reassessment if the product could sensibly be incorporated into an existing broad substance definition by adjusting the definition.
Act amendments would be required to fully implement this system, including the provision of ‘use’ controls. However, without making any changes to the Act, many of the workability issues could be eased by funding ERMA to make a number of strategically selected generic approvals with broad substance definitions. If this proposal is accepted the MfE and ERMA will need to work up a detailed description for further consideration and consultation.
Situation – costs of approvals seen to be too high
Some businesses report that the costs of preparing an application for a new hazardous substance and the time required for gaining an approval are too high relative to the New Zealand market size, and their ability to secure market share and recover costs. The approval process is seen as a disincentive to import and manufacture new hazardous substances and a barrier to innovation, as often the introduction of one substance leads to the development of others.
The Ministry of Economic Development has commissioned a survey on HSNO application costs and results will be available at the beginning of April. However case studies8 indicate that the costs of preparing an application for a hazardous substance approval is the biggest barrier, in particular the information requirements.
8. MED BASF case study – unpublished,
How – reducing costs to business
The solutions mentioned in this section and standards for groups of substances (see section 8) contribute to the removal of barriers to introducing new substances. In addition the following specific proposals will remove barriers:
- MfE to examine ERMA’s current cost recovery policy in the context of barriers to innovation e.g. are fixed applications fees better than full cost recovery; and
- While ERMA routinely uses overseas evaluations to determine a substance’s classifications, industry may not be generally aware of this. We propose that ERMA proactively advise applicants on what international data and evaluations they accept.
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7. Remove Redundancy and Cost from the Hazardous Substance Approval Process and Management System
June 2003
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