House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Home Affairs, the Honourable Tony Burke MP)

GENERAL OUTLINE

The purpose of the Customs Amendment (Expedited Seizure and Disposal of Engineered Stone) Bill 2024 (the Bill) is to amend the Customs Act 1901 (the Customs Act) to allow for the expedited seizure and disposal of prohibited engineered stone benchtops, panels and slabs.

The Government is taking action to strengthen the legislative framework under the Customs Act in relation to engineered stone in order to safeguard workers from the health risks associated with silicosis, and to support the world-first domestic ban on the supply, manufacture, processing and installation of engineered stone products in Australia that started on 1 July 2024. The manufacture of engineered stone produces respirable crystalline silica, which when inhaled, can cause fatal lung disease and other chronic illnesses including silicosis.

Amendments to the Model Work Health and Safety Regulations (Model WHS Regulations) to prohibit the supply, manufacture, processing and installation of engineered stone benchtops, panels and slabs came into effect on 1 July 2024 – with the ban implemented in the laws of all States and Territories and mirrored in the Work Health and Safety Regulations 2011 (Cth). To support this domestic 'use prohibition', on 18 September 2024 the Government announced a ban on the importation of engineered stone, to be implemented from 1 January 2025 by proposed amendments of the Customs (Prohibited Imports) Regulations 1956 (the Prohibited Import Regulations). Under the Prohibited Import Regulations, engineered stone benchtops, panels and slabs imported without a valid permit or exemption would be classed as prohibited import, meaning they can be seized at the border without a warrant. Most engineered stone products are imported into Australia; the importation ban will provide an extra layer of deterrence at the border.

To support the proposed amendments of the Prohibited Import Regulations, this Bill contains amendments of the Customs Act that will enhance existing seizure and disposal powers and support the Australian Border Force (ABF) to effectively administer and manage engineered stone goods at the border once the prohibition commences. The Customs Act currently requires seized prohibited imports to be stored for a minimum of 30 days before they can be disposed of. Due to the high volume of engineered stone products being received at the border, managing, storing and transporting these products under the existing prohibited imports framework is likely to cause a significant increase in work, and hinder the implementation of the import ban as well as other border operations.

The amendments in the Bill will empower the Comptroller-General of Customs to cause engineered stone products seized as prohibited imports on and from 1 January 2025 to be dealt with in a manner the Comptroller-General considers appropriate, including the immediate destruction of the goods. Similar provisions already exist for other prohibited imports, including tobacco products, vapes, dangerous goods, perishable goods and illicit drugs seized under section 206 of the Customs Act. Allowing for the expedited seizure and timely disposal of seized engineered stone goods will support the operational effectiveness of the import ban, enabling ABF officers to effectively manage these goods at the border.

FINANCIAL IMPACT STATEMENT

The financial impact of the measures in the Bill is set out in the following table.

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

The Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

A statement of compatibility with human rights has been prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011, and is at Attachment A .

IMPACT ANALYSIS

The Department of Employment and Workplace Relations (DEWR) has previously certified Regulation Impact Statements prepared by Safe Work Australia (SWA), along with additional supplementary analysis, as an Impact Analysis Equivalent for the decision to ban the importation of engineered stone. A summary of the findings of the Decision Regulation Impact Statements is below, and the full statements can be viewed at
https://oia.pmc.gov.au/published-impact-analyses-and-reports/import-ban-on-engineered-stone.

DEWR considers the two independent processes led by SWA – the Decision Regulation Impact Statement: Managing the risks of respirable crystalline silica at work (Silica Decision RIS), and the Decision Regulation Impact Statement: Prohibition on the use of engineered stone (Prohibition Decision RIS) – can be relied upon to satisfy impact analysis requirements.

The Prohibition Decision RIS provides analysis of the impacts of options under the model work health and safety (WHS) laws to prohibit the use of engineered stone. It builds on the evidence and analysis considered and set out in the Silica Decision RIS noting both documents are intended to be read together. Both these assessments have been prepared in accordance with the Regulatory Impact Analysis Guide for Ministers' Meeting and National Standard Setting Bodies and been assessed by the Office of Impact Analysis (OIA) as meeting the requirements set out in the Guide.

Additional analysis has been undertaken on the impacts associated with a further option to include border measures, such as a customs ban, to complement the prohibition on the use of engineered stone. This option seeks to address the same problem outlined in SWA's Prohibition Decision RIS, relating to the rise in the number of silicosis cases in workers in recent years, which are significantly over-represented by engineered stone workers. The two independent SWA processes did not scope the impacts on implementing complementary border measures as these assessments were limited to options for addressing the problem through the model WHS laws.

Complementary border measures, such as a customs ban, would not have significant additional impacts on businesses, workers or the economy because implementation would complement the domestic WHS prohibition on the use of engineered stone. The impacts on business, workers and consumers all flow from these WHS reforms. This is because a use prohibition on engineered stone would also have the effect of prohibiting the import of products under WHS laws. These laws provide that importers have a duty of care to ensure, so far as is reasonably practicable, that a product which will be used at a workplace is without risks to the health and safety of persons who would work with it. An importer would breach the duty of care importing a product which has been determined too unsafe to use in the way it is intended to be (i.e., fabricated).

Complementary measures at the border, such as a customs ban, will support the efforts of state and territory WHS regulators by providing an additional layer of enforcement and deterrence given engineered stone in Australia is predominantly supplied from overseas. In isolation, border measures like a customs ban would not address the problems associated with non-compliance when working with engineered stone. A customs ban was put in place by the Commonwealth in 2003 when asbestos was prohibited in Australia (Australia's asbestos prohibition is implemented through both WHS laws and a customs ban). A customs ban for engineered stone may be more targeted because asbestos is inherently dangerous to humans, whereas engineered stone does not pose a risk when not being processed.

Overview of the Decision Regulation Impact Statement: Managing the risks of respirable crystalline silica at work

On 28 February 2023, SWA released the Silica Decision RIS which provides an analysis of the impacts of options, under the model WHS laws, to manage the risks of respirable crystalline silica (RCS) to improve the protection of the health and safety of workers.

The Silica Decision RIS was informed by an extensive consultation process, including a Consultation Regulation Impact Statement (CRIS) where SWA sought public comment on five regulatory and non-regulatory options to reduce workplace exposures to RCS in Australia. Submissions were received from governments, peak bodies, unions, employer or industry representatives, commercial enterprises, lawyers, insurance groups, academics, and individuals. As part of the feedback on the CRIS, unions, peak health bodies, and professional organisations called for a prohibition on the use of engineered stone. As a result of this feedback, an additional option to undertake further analysis and consultation on the impacts of the prohibition of use of engineered stone was included in the Silica Decision RIS.

On 28 February 2023, WHS Ministers considered the Silica Decision RIS and agreed to a nationally coordinated approach addressing this issue, including national awareness and behaviour change initiatives and implementing stronger regulation of high-risk RCS processes. WHS Ministers also agreed that SWA undertake further analysis and consultation on a prohibition of the use of engineered stone under the model WHS laws. The decisions of WHS Ministers were announced through a communique available on DEWR's website.

Overview of the Decision Regulation Impact Statement: Prohibition on the use of engineered stone

On 16 August 2023, SWA circulated an embargoed copy of the Prohibition Decision RIS to WHS Ministers. Intended to be considered together with the Silica Decision RIS, the Prohibition Decision RIS examines the impacts of implementing a prohibition on the use of engineered stone through the model WHS laws, which would have the effect of a domestic ban on these products.

The Prohibition Decision RIS was also informed by extensive consultation based on three implementation options. These include:

How each of the seven Impact Analysis elements were addressed by the two independent SWA processes is outlined in the supplementary analysis, with additional detail relating to the impacts associated with complementary border measures, modelled on a customs ban on engineered stone.

COMMON ABBREVIATIONS AND ACRONYMS

NOTES ON INDIVIDUAL CLAUSES

Clause 1 Short title

1. Clause 1 provides that the Bill, when enacted, will be the Customs Amendment (Expedited Seizure and Disposal of Engineered Stone) Act 2024 (the Amendment Act).

Clause 2 Commencement

2. Clause 2 sets out the day on which the amendments contained in the Bill commence, which is the day after the Amendment Act receives the Royal Assent.

Clause 3 Schedules

3. Clause 3 enables the Schedules to the Bill, when enacted, to amend or repeal provisions of the legislation specified in the Schedule in accordance with the applicable items. This clause also provides that any other item in a Schedule to the Act has effect according to its term. Schedule 1 amends the Customs Act.

SCHEDULE 1—Amendments

Customs Act 1901

Item 1 Subsection 183UA(1)

4. This item inserts a new defined term engineered stone in subsection 183UA(1) of Subdivision A of Division 1 of Part XII of the Customs Act. Section 183UA establishes definitions in the Customs Act for the purposes of Division 1 of Part XII, which deals with the powers of officers. From 1 January 2025, engineered stone benchtops, panels and slabs imported without permission are prohibited imports for the purposes of the Customs Act.

5. This new defined term provides that in Division 1 of Part XII of the Customs Act, engineered stone has the same meaning as in proposed regulation 5M of the Customs (Prohibited Imports) Regulations 1956 (the Prohibited Import Regulations). This regulation would in turn provide that the term engineered stone in the Prohibited Import Regulations has the same meaning as in the Work Health and Safety Regulations 2011 (Cth) (the WHS Regulations (Cth)).

6. Regulation 529A of the WHS Regulations (Cth) provides for the meaning of "processing" in relation to crystalline silica substances and related terms, including "crystalline silica substance (CSS)" (at subregulation 529A(2)) and "engineered stone" (at subregulation 529A(4)). Under regulation 529A, engineered stone is an artificial product that contains 1% or more crystalline silica (determined as a weight/weight (w/w) concentration), is created by combining natural stone materials with other chemical constituents (such as water, resins or pigments) and becomes hardened. However, paragraph 529A(4)(b) currently provides that 'engineered stone' does not include concrete and cement products, bricks, pavers and other similar blocks, ceramic wall and floor tiles, grout, mortar and render, plasterboard porcelain products, sintered stone and roof tiles.

7. The purpose of the new defined term engineered stone in subsection 183UA(1) of the Customs Act is to ensure alignment between any engineered stone products banned under both the WHS Regulations (Cth) and the proposed amendments of the Prohibited Import Regulations. The new defined term in subsection 183UA(1) operates to support new subsection 206(2C) of the Customs Act, inserted by item 2 of this Schedule. It ensures that prohibited engineered stone products covered by the proposed amendments of the Prohibited Import Regulations are able to be seized and disposed of in accordance with section 206 of the Customs Act (as amended).

8. The definition of engineered stone in the Customs Act relies upon the definition in subordinate legislation, rather than primary legislation, to allow for greater responsiveness over time in the event of novel and unanticipated forms of engineered stone as well as emerging developments in the industry. It also operates to ensure consistency in the approach to the domestic ban, the import prohibition and the amended seizure and disposal powers. As the definition is provided for in regulations, it is also important to note that any future amendments of the defined term (by way of amending regulations) would also be subject to parliamentary scrutiny and disallowance.

Item 2 After subsection 206(2B)

9. Subdivision G of Division 1 of Part XII of the Customs Act provides, among other things, for the statutory framework and powers for the treatment of goods that have been seized as forfeited goods. The Customs Act generally requires seized prohibited imports to be stored in an approved place for a minimum period of 30 days before those goods can be disposed of. It also requires that a seizure notice be served on the owner of the goods, or if the owner cannot be identified, on the person in whose possession or under whose control the goods were at the time of seizure. The owner or person in possession may make a claim for the return of seized goods. If no claim is made within 30 days after the day the seizure is served, the goods are taken to be condemned as forfeited to the Crown.

10. Section 206 of the Customs Act allows the Comptroller-General of Customs to cause certain seized goods to be dealt in a manner he or she considers appropriate, including immediate destruction of the goods – including dangerous goods, vaping goods and prohibited psychoactive substances, tobacco products and prohibited serious drug alternatives.

11. Item 2 of the Schedule to the Bill amends section 206 of the Customs Act to insert new subsection 206(2C), which will allow for the disposal of engineered stone consistent with the treatment of other seized goods. Specifically, new subsection 206(2C) provides that, if:

•

goods are seized under a seizure warrant or under subsection 203B(2) or (2A), 203CA(3), or 203CB(2); and

•

the Comptroller-General of Customs is satisfied that the goods are engineered stone that is a prohibited import;

the Comptroller-General of Customs may cause the goods to be dealt with in such manner as the Comptroller-General considers appropriate (including the destruction of the goods).

12. The manner in which seized engineered stone can be dealt with may include the immediate disposal of the goods, providing streamlined administrative processing and reduced storage time for seized engineered stone goods.

13. The purpose of this amendment is to empower the Comptroller-General of Customs to cause engineered stone seized as a prohibited import to be dealt with in a manner the Comptroller-General considers appropriate, including by permitting the immediate destruction of the goods. This amendment, and the other related amendments in the Schedule to the Bill, are necessary to ensure the continued efficiency of border operations following the proposed prescription of engineered stone.

Item 3 Subsection 206(3)

14. Subsection 206(3) of the Customs Act requires that, as soon as practicable, but not later than 7 days after the goods referred to in subsection (1), (1A), (2),(2A) or (2B) have been dealt with, the Comptroller-General of Customs must give or publish a notice in accordance with subsection 206(5).

15. This item amends subsection 206(3) of the Customs Act to substitute the words "(2A) or (2B)" with "(2A), (2B) or (2C)." This amendment is consequential to amendments made by item 2, to insert reference to new subsection 206(2C) alongside existing provisions covered by the notice requirement in subsection 206(3).

16. The purpose of this amendment is to extend the notice requirement under subsection 206(3) of the Customs Act to engineered stone products that are prohibited imports and subsequently covered by new subsection 206(2C) of the Act. The effect of this amendment is to ensure that the owner of an engineered stone product dealt with under subsection 206(2C) is adequately notified of dealings with their goods as well as related matters, including their right to recover the market value of the product. This amendment ensures consistency with the notice requirements for other goods covered by section 206.

Item 4 Paragraph 206(5)(c)

17. Subsection 206(5) of the Customs Act provides that the notice must:

•

identify the goods; and

•

state that the goods have been seized under a seizure warrant or under subsection 203B(2) or (2A), 203CA(3) or 203CB(2) and give the reason for the seizure; and

•

state that the goods have been dealt with under subsection (1), (1A), (2) or (2A) and specify the manner in which they have been so dealt with and the reason for doing so; and

•

set out the terms of subsection (6).

18. This item amends paragraph 206(5)(c) of the Customs Act to substitute the words "(2A) or (2B)" with "(2A), (2B) or (2C)." This amendment is consequential to amendments made by item 2.

19. This purpose of this item is to ensure that the notice requirements under paragraph 206(5)(c) extend to notices provided or published in relation to engineered stone products dealt with in accordance with new subsection 206(2C)

Item 5 Subsections 206(6) and (7)

20. This item contains an amendment of both subsections 206(6) and (7) of the Customs Act.

21. Subsection 206(6) of the Customs Act provides that, if goods are dealt with in accordance with subsection 206(1), (1A), (2) or (2A), the owner of the goods may bring an action against the Commonwealth in a court of competent jurisdiction for the recovery of the market value of the goods at the time they were so dealt with.

22. This item amends subsection 206(6) of the Customs Act to substitute the words "(2A) or (2B)" with "(2A), (2B) or (2C)." This amendment is consequential to the amendments made by item 2.

23. The purpose and effect of this amendment is to extend the right to recover the market value of seized goods to engineered stone products that have been dealt with under new subsection 206(2C).

24. Subsection 206(7) of the Customs Act specifies the circumstances in which a person's right to recover the market value of seized goods that have been dealt with under section 206 is enlivened.

25. This item amends section 206 of the Customs Act to substitute the words "(2A) or (2B)" with "(2A), (2B) or (2C)." This amendment is consequential to the amendments made by item 2.

26. The purpose and effect of this clause is to permit the owners of engineered stone goods destroyed under subsection 206(2C) the right to recover the market value of the goods, if they can establish that the circumstances required to engage the seizure and disposal of the goods did not exist.

Attachment A Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Customs Amendment (Expedited Seizure and Disposal of Engineered Stone) Bill 2024

This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Bill

The Customs Amendment (Expedited Seizure and Disposal of Engineered Stone) Bill 2024 (the Bill) amends section 206 of the Customs Act 1901 (the Customs Act) to allow the Comptroller-General of Customs to cause engineered stone benchtops, panels and slabs seized as prohibited imports to be dealt in a manner he or she considers appropriate, including immediate destruction of the goods.

Background

The Bill complements the domestic use and proposed import prohibition of engineered stone products, in light of the health risks posed by those goods and the high volume of those goods being received at the border. Expedited seizure and disposal of engineered stone products supports the operational effectiveness of the import prohibition by allowing Australian Border Force (ABF) officials to effectively administer these goods at the border.

On 1 July 2024, amendments to the Model Work Health and Safety Regulations (Model WHS Regulations) came into effect, prohibiting the supply, manufacture, processing and installation of engineered stone benchtops, panels and slabs in Australia. To support this use prohibition, the Government has agreed that the ABF intends to implement an import prohibition for engineered stone.

Some jurisdictions have adopted transitional arrangements, delaying full implementation of the use prohibition until 31 December 2024. To accommodate this, the import prohibition is proposed to come into force from 1 January 2025, at which time, engineered stone benchtops, panels and slabs will be prohibited imports under the Customs (Prohibited Imports) Regulations 1956. As such, engineered stone benchtops, panels and slabs will only be able to be imported into Australia with a valid import permit or an applicable exemption. Engineered stone imported without a valid permit or exempted would be a prohibited import and would be able to be seized at the border without a warrant.

The Customs Act currently requires seized prohibited imports to be stored for a minimum of 30 days before they can be disposed of. Legislative and administrative requirements for prohibited imports, including requirements to issue seizure notices and records of seizure, also need to be fulfilled. Managing engineered stone as a prohibited import may result in a demonstrable increase of work at the border that will impact the Australian Government's ability to effectively regulate other border operations.

The Bill amends section 206 of the Customs Act to empower the Comptroller-General of Customs to cause engineered stone products seized as prohibited imports from 1 January 2025, to be dealt with in a manner he or she considers appropriate, including the immediate destruction of the goods. Permitting immediate destruction of engineered stone, as a discretionary option would be useful in the management of seized engineered stone products as these products are a bulk good and pose significant logistical challenges in terms of storage and transport. Streamlining the administrative tasks related to managing engineered stone seizures will also allow for a more efficient compliance process. Immediate destruction may be used in situations where it is unlikely that seizure would be challenged. This may include instances where engineered stone is imported without a permit, or in contravention of permit conditions.

Human rights implications

This Bill is technical in nature and does not engage any of the applicable rights or freedoms.

Conclusion

This Bill is compatible with human rights as it does not raise any human rights issues.