Consultation on proposed amendments to the import certificate requirements under the Hazardous Substances (Importers and Manufacturers) Notice 2015 July 2018
2 Contents Contents 2 Summary 3 Background 5 Process for amending EPA notice 7 Making the Notice requirements clearer 7 Proposed amendments to the Notice 8 Benefits and costs of this proposal 10 International best practice 11 Conclusion 12 Contact details Environmental Protection Authority Private Bag 63002 Wellington 6140 Level 10 Grant Thornton House 215 Lambton Quay Wellington 6011 Telephone +64 4 916 2426 www.epa.govt.nz Copyright Environmental Protection Authority This work is licensed under the Creative Commons Attribution-ShareAlike 4.0 International licence. In essence, you are free to copy, distribute and adapt the work, as long as you attribute the work to the Environmental Protection Authority and abide by the other licence terms. To view a copy of this licence, visit https://creativecommons.org/licenses/by/4.0/. This does not give you permission to use the Environmental Protection Authority s logo, the New Zealand Government logo, or the coat of arms in any way that breaches the Flags, Emblems and Names Protection Act 1981. This work may include photographs, images, or other supplied material for which the Environmental Protection Authority does not hold full copyright and is not covered by the Creative Commons licence.
3 Summary The Environmental Protection Authority (EPA) proposes amending the Hazardous Substances (Importers and Manufacturers) Notice 2015 (the Notice), to require import certificates for a narrower range of explosives than the present requirements. Explosives are classified as class 1 substances under the Hazardous Substances and New Organisms Act 1996 (HSNO Act). Effectively, the proposed amendment provides that an import certificate will be required for class 1 substances that are subject to the controlled substance licence requirements under the Health and Safety at Work (Hazardous Substances) Regulations 2017, and for fireworks, except novelty and noise-maker fireworks specified under regulation 4(2) of the Hazardous Substances (Fireworks) Regulations 2001. The proposed amendment means that an import certificate will not be required for novelty fireworks such as Christmas crackers and party poppers, and explosives such as marine safety flares and railway track signal explosives (sometimes referred to as railway detonators). The proposed amendment follows from feedback on previous consultation on possible policy changes to the import certificate requirements as part of consultation on changes to fees set under the HSNO Act. At the same time as making this amendment, the EPA proposes to set out the Notice requirements more clearly, so that they accurately reflect the information that is required by the EPA and WorkSafe New Zealand (WorkSafe). This information is already required on the application form for the import certificate for explosives, and is included on the issued certificate. These amendments do not mean any additional information requirements. The information required assists with the overall system of explosives management. We are proposing to use the EPA s power to amend the Notice under section 76C(5) of the HSNO Act. The proposed amendments are set out in an Exposure Draft of the amended consolidated Notice (Exposure Draft), which is attached as Appendix 1. The Exposure Draft includes tracked changes showing the proposed new wording of clause 10, and the deleted wording.
4 We seek public input This document has been prepared by the EPA to inform public consultation on the Exposure Draft. We want to ensure that the amended Notice requirements are clear and unambiguous. You can make comments by letter to EPANoticeSubmissions@epa.govt.nz or using the online submission form. The closing date for feedback is 8 August 2018. How we will consider your feedback We will review and analyse the comments received and make any changes to the proposed amendments, as appropriate. Our timeline is to seek the agreement of the EPA Board to the amended Notice at its meeting on 6 September 2018, and for the amended Notice to come into effect on 1 October 2018 at the same time as new fees fixed under the HSNO Act. Before making any decisions, the Board will be informed of the feedback received on the Exposure Draft and how this feedback has been taken into account. Privacy Statement The Privacy Act 1993 establishes certain principles with respect to the collection, use, and disclosure of information about individuals by various agencies, including the EPA. Any personal information you supply in the course of providing feedback will be used only in conjunction with the matters covered by this document. We may also use your contact details for the purpose of requesting your participation in customer surveys. You may request that your personal information (other than your name) be withheld from publicly available information. Disclaimer The Exposure Draft does not reflect final EPA decisions. The Exposure Draft or this document do not alter the laws of New Zealand. The EPA does not accept any responsibility or liability to any person, whether in contract, equity or tort, or any other legal principle, for any direct or indirect losses or damage arising from reliance on the contents of this document.
5 Background Hazardous Substances (Importers and Manufacturers) Notice 2015 The Hazardous Substances (Importers and Manufacturers) Notice 2015 (the Notice) has two main purposes. It requires most people or businesses that make or import hazardous substances to provide to the EPA basic contact information. This information helps the EPA manage hazardous substances in New Zealand and allows us to communicate with manufacturers and importers and keep them up to date and informed. The Notice also requires importers of almost all class 1 substances (explosives) to: obtain an import certificate, stating that the explosive has an approval under the HSNO Act, and to provide this to the New Zealand Customs Service (Customs) before the explosive can be cleared for entry into New Zealand, and provide Customs with written notice of the quantity of the explosive being imported, and the date and place where it will be collected. Those explosives that are not subject to these requirements are: safety ammunition, cable cutters, airbag initiators and seatbelt pre-tensioners, power device cartridges, signal or shock tubes, and cassette degradation devices. Consultation on import certificates for explosives and fees From 9 April to 21 May 2018, the EPA consulted on proposed increases to the fees for import certificate requirements for explosives. In the consultation document, the EPA sought views on the ongoing need for import certificates for most explosives which range from explosives used in mining operations to marine flares to Christmas crackers. The following options were outlined in comparison to the status quo to assist in seeking feedback: Option 1: Amend the import certificate requirement in the Notice to apply only to explosives that are covered by the controlled substance licence requirements in the Health and Safety at Work (Hazardous Substances) Regulations 2017. Option 2: Amend import certificate requirement in the Notice to apply to the importer rather than the shipment, requiring importers to obtain an annual certificate Option 3: Combination of option two and option one - Amend the import certificate requirement in the Notice to only apply to explosives that are covered by the controlled substance licence requirements in the Health and Safety at Work (Hazardous Substances) Regulations 2017, and require just an annual import certificate Option 4: Amend the Notice to remove the requirement for import certificates for all explosives. Submitters were also given the opportunity to add their own options as part of the consultation. The EPA indicated in the consultation document that if subsequent amendments to the Notice were proposed, it would consult on the proposed amendments under section 76C of the HSNO Act. Feedback from the submitters and government agencies Eight submitters made comments on possible changes to the import certificate requirements in the Notice. Submitters were mainly businesses from around New Zealand with some experience in working within the current import certificates system. The views expressed in the submissions are
6 outlined in the Summary of submissions on the consultation Our Fees are Changing. You can find this document on the EPA s website, under the Decided Consultation section. Additionally, two government agencies, WorkSafe and Maritime New Zealand (Maritime NZ), provided comments. The feedback highlighted that for certain explosives, import certificates are part of the overall integrity of the health and safety system. This view was reinforced in the submissions that expressed hesitancy about removing the requirement for import certificates altogether, and in the comments received from WorkSafe. WorkSafe advised that maintaining import certificates for class 1 explosives, that are subject to the controlled substance licence requirements in the Health and Safety at Work (Hazardous Substances) Regulations 2017, is an important complement to the overall system of explosives management. The import certificates contain information regarding each shipment of explosives imported, such as quantity and destination of the explosives, name and contact details of the manufacturer or exporter, and the controlled substance licence number. Maritime NZ requested that the import certificates were not required for shipboard pyrotechnics such as rocket parachute distress flares and rocket line throwers. It noted that these explosives form part of a ship s emergency equipment, and are required to be carried on-board by maritime rules enforced by Maritime NZ. It also noted that these explosives were previously exempt from the import certificate for explosives requirements under the Hazardous Substances (Tracking) Regulations 2001, which preceded the introduction of the current import certificate requirement under the Notice. With respect to the very low-hazard explosives and novelty and noise-maker fireworks, such as Christmas crackers and party poppers, there was almost full support in submissions for removing the requirement for import certificates. Submitters also provided mixed feedback on retail fireworks. Retail fireworks typically refers to those fireworks restricted to sale to the public from 2 November to 5 November, and can include items such as Roman candles, Catherine wheels, and sparklers. The main argument for requiring an import certificate was that retail fireworks are an area of public concern. There was concern that the removal of the import certificate requirement for retail fireworks could reduce the level of monitoring by the Customs of fireworks imports, and could undermine the restrictions on firework sales in the Hazardous Substances (Fireworks) Regulations 2001. Submitters also responded to the option for an annual import certificate, rather than the current pershipment system which requires an import certificate for each shipment. However, WorkSafe advised that they require information on what is being imported, when it is being imported, and by whom, and expressed concern that an annual explosives certificate complemented by a shipment self-declaration system may not provide the same certainty of information as that provided by the certificate per shipment of explosives and associated Customs checking. Board s consideration On 12 July 2018, the EPA Board considered the feedback on proposed amendments to the HSNO Act charges and fees, and requirements for import certificates for explosives.
7 With respect to the requirements for import certificates for explosives, the Board agreed to consult on amending the Notice to the effect that an import certificate will be required for explosives (class 1 substances) which are subject to the controlled substance licence requirements under regulation 9.5 of the Health and Safety at Work (Hazardous Substances) Regulations 2017, and for fireworks except novelty and noise-maker fireworks specified under regulation 4(2) of the Hazardous Substances (Fireworks) Regulations 2001. The proposed amendments are set out in an Exposure Draft of the amended consolidated Notice (Exposure Draft), which is attached as Appendix 1. The Exposure Draft includes tracked changes showing the proposed new wording of clause 10, and the deleted wording. Process for amending EPA notice Under section 76C(5) of the HSNO Act, the EPA must follow the procedure for issuing EPA notices to amend an EPA notice. Before issuing or amending an EPA notice, the EPA must: publicly notify its intention to issue the notice give interested persons a reasonable time to make submissions on the proposal consult any persons, representative groups within the hazardous substances industry or elsewhere, government departments, WorkSafe, and Crown entities that the EPA considers appropriate. The EPA must also consider, and give any weight that it considers appropriate to, the following: the costs and benefits of implementing measures for which the notice is being proposed international best practice in respect of hazardous substances management any other matters that the EPA considers appropriate in the circumstances. Any resulting EPA notice or amendment must be publicly notified, along with a statement describing the consultation that took place before the notice was made. Public notification will include publication in the New Zealand Gazette. Making the Notice requirements clearer The proposed amendments to the Notice cover the policy decision to narrow the range of explosives that require an import certificate. They also include amendments to set out the Notice requirements more clearly, so that they accurately reflect the information that is required by the EPA and WorkSafe. It is proposed that the Notice will specifically note the information that must be provided by the importer, including the maximum quantity of the explosives that will be imported, the place where the explosives will be shipped from, the place where the explosives will be shipped to and clear Customs, the expected date of Customs clearance, the controlled substances licence number of the person who will receive the explosives at the Customs port, and storage information. This information assists with the overall system of explosives management. It is already required on the application form for the import certificate for explosives, and is included on the issued certificate.
8 The information is used by the EPA to verify that the explosive being imported is approved under the HSNO Act, and also for monitoring compliance with the Hazardous Substances (Fireworks) Regulations 2001. The information is used by WorkSafe for tracking and monitoring explosives. In relation to the quantity of the explosives being imported, it is proposed that information on the maximum quantity, instead of the exact quantity being imported, is required to avoid any minor discrepancy in quantity impeding Custom s clearance. The current Notice also requires the importer to provide written notice to Customs of the quantity of explosives to be imported, and when and where. Customs has indicated that, in most cases, they require just the import certificate number. Accordingly, it is proposed the wording of the Notice is amended to enable this, and also for Customs to ask for a copy of the import certificate as required. There is nothing in the clarity amendments that changes the intent of the current requirements to provide information about the quantity of explosives being imported and when and where. No change to the Health and Safety at Work (Hazardous Substances) Regulations 2017 tracking hazardous substances requirements The changes proposed to the Notice do not affect the obligations a PCBU (person conducting a business or undertaking) has under Part 19 of the Health and Safety at Work (Hazardous Substances) Regulations 2017 with respect to tracking hazardous substances. The regulations require records of most explosives to be kept when in the workplace, and tracking records for certain explosives also after the point of retail sale. Proposed amendments to the Notice We propose to amend clause 10(1) of the Notice to say: 10 Obligation to provide information and certificate (1) This clause applies to (a) any class 1 substance (explosive) in a quantity for which a controlled substance licence is required under regulation 9.5 of the Health and Safety at Work (Hazardous Substances) Regulations 2017: (b) fireworks with the hazard classification 1.3G, 1.4G, or 1.4S, other than the following: (i) those bonbon crackers, snaps, or similar pyrotechnic novelties or noise makers containing less than 1.7 mg of pyrotechnic substance; or (ii) those amorces, crackshots, or similar pyrotechnic novelties or noise makers containing less than 5 mg of pyrotechnic substance; or (iii) those party poppers, streamer bombs, handblasters, or similar pyrotechnic novelties or noise makers containing less than 20 mg of pyrotechnic substance. The effect of the amendment is to no longer require import certificates for explosives and novelty fireworks that are considered low risk.
9 Retaining the import certificate requirements for higher risk explosives and fireworks will maintain the overall integrity of the health and safety system for managing explosives and fireworks. We also propose to amend clause 10(2) and add new clauses 10(3) to 10(5) to say: (2) Prior to uplifting the substance from a Customs-controlled area following importation, the importer must provide information to the Authority and WorkSafe New Zealand relating to the following matters: (a) the importer of the substance; (b) the manufacturer of the substance; (c) the port or place from which the explosive was shipped; (d) the maximum quantity of substance to be uplifted; (e) the HSNO approval number of the substance; (f) the description of the substance; (g) the UN number, hazard classification, and proper shipping name of the substance; (h) the intended date and place of uplift; (i) (j) the proposed location for the storage of the substance and the location compliance certificate (if applicable); the intended certified handler of the substance; and (k) the controlled substance licence of the person in control of the substance (if applicable). (3) The information required by subclause (2) must be provided in a form specified by the Authority. (4) Before a substance to which this clause applies may be uplifted following importation, the importer must give to the New Zealand Customs Service evidence that (a) the information required by subclause (2) has been supplied to the Authority; and (b) the Authority has certified that the substance has an approval under section 29 of the Act. (5) The evidence required by subclause (4) must be in the form requested by the New Zealand Customs Service. The effect of these amendments are to make it clear in the Notice what information the importers of explosives need to provide to the EPA and WorkSafe, prior to Customs clearance. The importers currently provide all of the above information to the EPA with their application for a Certificate to Import Explosives, and the proposed change is to reflect the current situation. The amendments also enable Customs to specify how they want to receive advice of the issued import certificate.
10 Benefits and costs of this proposal The fees consultation document contained our analysis of options for import certificate requirements for explosives. Taking into consideration the initial feedback from the submitters and government agencies, the EPA has made an additional assessment of the benefits and costs of this proposal as below. Benefits The proposed amendments will remove the compliance and administrative costs for lower risk explosives and novelty and noise-maker fireworks, which are considered to be disproportionate to the risk of harm to people or the environment. In addition, greater clarity in the requirements and providing for a maximum quantity of explosives being imported (compared to a precise quantity) will make it easier for the importers of high risk explosives to comply with the requirements, and should reduce their compliance costs. The requirements for import certificates for high risk explosives are proposed to remain the same, as they will ensure that importers have the correct approvals under the HSNO Act when importing those explosives, and it will ensure there is continuation of oversight of the importation of high risk goods from their arrival at a Custom-controlled area. The import certificate system also provides information on each shipment of explosives imported, quantity and destination of the explosives, name and contact details of manufacture or exporter, and controlled substance licence number. This information feeds into WorkSafe s own explosives management work. The proposed continuation of the import certificate requirements for fireworks other than novelty and noise-maker fireworks, supports the Hazardous Substances (Fireworks) Regulations 2001. In particular, the sale of those fireworks is restricted to between 2 and 5 November every year because of the public costs associated with injury to people and property associated with the accidental and deliberate misuse of fireworks. Having an import certificate for fireworks also provides information on who is bringing fireworks into New Zealand. This allows the EPA, as part of its compliance, to remind importers of their requirements to meet the HSNO Act fireworks-certificate requirements under the Hazardous Substances (Fireworks) Regulations 2001 (relating to noise and other impact factors). Another smaller benefit is that the import certificate provides data on the amount of fireworks imported into New Zealand. This is useful data for policy on the management of fireworks use. Costs Importers of high hazard explosives and fireworks will continue to incur compliance costs associated with making applications for import certificates, and must pay fees for import certificates ($500 per application, following the fees increase). They also have to spend time waiting for import certificates to be issued before explosives can be imported. Likewise, the EPA will continue to issue import certificates for high hazard explosives and fireworks, and bear associated administrative costs. As import certificates will no longer be required for other lower hazard explosives and fireworks, there would be less overall cost compared to the status quo, and, with the fee increase from 1 October 2018, less general tax revenue will be used for the processing of import certificate applications (reducing from 94% of the overall application processing costs to 67%).
11 International best practice Various countries, including Australia and Canada, use licensing or permitting systems for the import of certain explosives. Typically, there is some differentiation in the regulation of lower risk explosives, including not requiring an import licence or permit for such explosives. Therefore, the EPA considers that the proposed removal of import certificate requirements for low risk explosives, which do not require a controlled substance licence, and novelty and noise-maker fireworks, is in line with the approach taken by other jurisdictions. The information required from importers for an import certificate, is also in line with other countries information requirements. Some international examples of explosives import licence or permit requirements, and exemptions are described below. Australia In South Australia, a licence to import explosives is not required for the importation of gunpowder in amounts not exceeding 15 kilograms, other explosives (including fireworks) in quantities less than three kilograms, and safety cartridges not exceeding 2,000 in number for personal use. General use fireworks, which are lower risk fireworks than other higher risk fireworks such as toy pistol caps, bonbon crackers, or sparklers, are exempt from certain requirements, for example, the requirement to hold a pyrotechnic sales business licence. On the application form, the importers need to provide their personal details and classification code of the explosives being imported, and specify whether they are an owner, consignee, consignor, or carrier of the explosives. In Western Australia, the requirement to hold an import licence does not apply to a power device cartridge, model rocket motor (containing less than 5 grams of explosive), sparkler, and unrestricted firework (including party poppers, percussion caps, and bonbon or Christmas crackers). In addition, emergency devices (containing one or more explosives) on a vehicle or a boat being imported, are exempt, if the device is legally required to be carried on the vehicle or a boat. On the application form, the importers need to provide their personal details, security clearance details, the location of the explosives storage, and ports of entry or exit. In Queensland, an import permit or licence is not required for certain explosives, which are part of the operational equipment of a road vehicle or boat, such as airbags and distress signals. In addition, small arms ammunition is exempt, if it is imported for personal use by a person authorised under the Weapons Act 1990. The Queensland Explosives Regulation 2017 also exempts unrestricted fireworks from the restrictions on the sale, possession, and use of explosives. The unrestricted fireworks include novelty or noisemaker fireworks such as amorces and caps for toy pistols, bonbon crackers, and sparklers. However, a licence is required to import the unrestricted fireworks, and the Chief Inspector of Explosives must be notified of the intended import. On the application form for an import permit, the importers need to provide their personal details, details of the explosives being imported (including the quantity), the reason for import, country of manufacture, original port of explosives loading, proposed mode and point of entry, location of storage, and if the explosives are to be sold, the Licence to Sell number. Similarly, in New South Wales, low risk explosives including power device cartridges, life-saving appliances (for example, airbag inflators and seatbelt pre-tensioners), distress signals, and toy
12 fireworks (for example, amorce, blaster ball, bonbon cracker, sparkler, and toy pistol cap) not exceeding prescribed quantities do not require a licence to possess, transport, use, or sell. However, of those, only the life-saving appliances and distress signals, that are part of the safety system of a vessel or aircraft, are exempt from the import licence requirement. On the application form, the importers are required to provide their personal details, security clearance details, their experience and knowledge of the safe storage, handling and transport of explosives, reason for requesting licence, details of the explosives being imported, site and storage details, and export authorisation if relevant. Canada Natural Resources Canada s Explosives Regulatory Division controls the type and quantity of explosives that may be imported into Canada. Christmas Crackers containing less than two milligrams of an explosive substance do not require an import permit, while other fireworks such as pistol caps, firecrackers, and pyrotechnics smoke signals require a permit. Certain explosives, similar to those that do not require a controlled substance licence in New Zealand, are exempt from the import permit requirements. Certain automotive explosives such as pyrotechnic seat belt pre-tensioners and airbag inflators are exempt. Other explosives including model rocket motors, small arms cartridges and primers, and black and smokeless powders in quantities less than the prescribed amounts also do not require an import permit, if certain conditions are met (for example, they should be imported for personal use). In addition, pyrotechnic distress signals and life-saving devices that are being carried in an aircraft, vessel, or vehicle as part of its safety equipment, are exempt from the permit requirements. On the application form for an import permit, the importers need to provide their personal details, custom broker details (if applicable), information regarding the proposed storage site, details of the explosives being imported (including manufacturer, trade name, quantity, UN number, and country of origin). Conclusion We consider that the benefits of the amendments to the Notice outweigh the costs, and that this proposal is in line with international best practice. If the EPA decides to make the proposed amendments, with any necessary modifications, to the Notice, it is intended that the amendments will come into force on 1 October 2018.