INSIGHT

Simplifying standards: trusted overseas product safety standards to be adopted in Australia

By Jacqueline Downes, Jaime McKenzie, Anita Thompson, Ellen McCrea
Consumer law Risk & Compliance

A chance to ease the regulatory burden of doing business 2 min read

The Federal Government has announced it will begin consulting on amendments to the Australian Consumer Law (ACL), which would allow businesses to rely on compliance with certain trusted overseas product safety standards (in lieu of the equivalent Australian standard) when supplying products to the Australian market.

Key takeaways

  • The Federal Government is proposing to streamline product safety requirements for businesses operating in Australia in line with its deregulation agenda.
  • It is expected businesses will be able to rely on compliance with an applicable overseas product safety standard in lieu of compliance with an equivalent Australian mandatory standard.
  • This could reduce the regulatory burden for businesses supplying consumer products in Australia and international jurisdictions, by allowing them to comply with a single set of product safety standards.
  • We will keep you updated as consultations on the proposed laws commence in the second half of 2021.

Product safety standards in Australia

Under the ACL, all products offered for sale in Australia must comply with any applicable mandatory safety standard.1 Mandatory safety standards are developed by the Federal Government and currently apply to over 40 categories of products ranging from baby walkers to sunglasses. They are enforced by the ACCC, as well as state and territory consumer law regulators. Businesses that have operations in international jurisdictions (in addition to Australia) are often faced with differing safety standards that add to the regulatory burden of doing business.

Since July 2015, the ACCC has implemented a policy outlining criteria that it uses to identify trusted international product safety standards (ACCC Policy Principles). Generally, three criterion will be considered:

  • whether the standard provides an acceptable level of consumer safety;
  • whether the standard is from a comparable jurisdiction; and
  • whether the standard is applicable and sufficient in the Australian context.2

Although this policy has introduced some flexibility, the current proposal is expected to provide further assistance to businesses in streamlining their approach to compliance.

The proposal

On 4 June 2021, the Hon Ben Morton MP announced that the Federal Government will seek to amend the ACL to allow businesses to rely on compliance with an applicable overseas product safety standard in lieu of compliance with an equivalent Australian mandatory standard. The Government also indicated it will look to develop a mechanism whereby Australian standards can be updated automatically to ensure Australia does not 'lag behind' international standards.

The deregulation agenda

The Government has indicated it has received industry feedback about the inefficiency of complying with duplicate product safety standards in multiple jurisdictions. This is consistent with recognition by a range of regulators of the value of not imposing additional regulation on businesses trading in Australia beyond trusted international standards unless there is a demonstrable reason to do so.

We will keep you updated as consultations on the proposed laws commence in the second half of 2021.

Footnotes

  1. Competition and Consumer Act 2010 (Cth), sch 2, s106.

  2. ACCC Policy Principles, pp 3-5.