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2008
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
THERAPEUTIC GOODS AMENDMENT (POISONS STANDARD) BILL 2008
EXPLANATORY MEMORANDUM
(Circulated by authority of the Parliamentary Secretary to the Minister for Health and
Ageing, Senator the Hon Jan McLucas)
THERAPEUTIC GOODS AMENDMENT (POISONS STANDARD) BILL 2008
OUTLINE
The Therapeutic Goods Amendment (Poisons Standard) Bill 2008 (the Bill) amends
the Therapeutic Goods Act 1989 (the Act) to address the legal consequences arising
from a recent decision of the Federal Court in Roche Products v National Drugs and
Poisons Schedule Committee [2007] FCA 1352 (30 August 2007) (the Roche
decision). The Federal Court held that decisions made by the National Drugs and
Poisons Scheduling Committee (the Committee) under subsection 52D(2) of the Act,
which include decisions to amend the Poisons Standard, are legislative in character.
Prior to becoming a statutory committee under the Act, the National Drugs and
Poisons Scheduling Committee was a subcommittee of the Australian Health
Ministers' Advisory Council, with responsibility for preparing and amending the
Poisons Standard. The Poisons Standard is principally used by the States and
Territories as a tool for regulating medicines, veterinary products and agricultural
substances. Following its establishment as a committee under the Act, the Committee
continued to assume a role and perform functions in accordance with powers
conferred upon it by the Act and Therapeutic Goods Regulations (the Regulations).
The Poisons Standard is now prepared, maintained and amended by the Committee
under the terms of the Act and the Regulations. The Poisons Standard consists of
decisions of the Committee regarding the classification of drugs and poisons into
different Schedules signifying degree of risk. The Poisons Standard also contains a
number of appendices which supplement the schedules by setting out additional
controls, qualifications and exemptions for some substances. Substances included in
each Schedule and appendix are then regulated under relevant States/Territories
legislation according to which Schedule the substances appear in. The Poisons
Standard is also used by the Commonwealth under the Act for regulatory and
enforcement purposes.
Decisions by the Committee have been treated by the Therapeutic Goods
Administration (TGA) as being administrative in character. In doing so the TGA
relied on an earlier external legal advice and statements made by the Federal Court in
Pro Health Products Pty Limited v McEwen [2004] FCA 1790 (11 October 2004)
(Pro Health), which categorised and treated decisions of the Committee as
administrative in character.
The Federal Court in the Roche decision arrived at a different conclusion when it held
that decisions made by the Committee to amend the Poisons Standard are legislative
in nature, and made in the exercise of delegated legislative power.
On that basis, it is likely that the Poisons Standard and its amendments are legislative
instruments for the purposes of the Legislative Instruments Act 2003 (LIA). This
being the case, for the Poisons Standard and amendments made to the Poisons
Standard by the Committee to be enforceable, they are required under the LIA to be
registered on the Federal Register of Legislative Instruments (FRLI). As this had not
(until recently) been done, the Poisons Standard, and a large number of amendments
made to it since 2000, may have been unenforceable. A failure to register some of the
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amendments made to the Poisons Standard within specified time limits may have also
resulted in their repeal under the operation of the LIA.
In order to reinstate the repealed amendments made to the Poisons Standard, and to
ensure both the integrity of the Poisons Standard as well as its enforceability, the Bill
amends the Act to treat the Poisons Standard and amendments made to it to have been
properly registered under the LIA and to have met any other requirements of the LIA .
The retrospective effect of the amendments will not add any new regulatory
requirement. Rather, the retrospective effect of the amendments is necessary to
preserve the status quo of the Poisons Standard, and amendments made to it, before
the Roche decision. Decisions and actions taken by both the regulator and business
relied upon the enforceability and integrity of the Poisons Standard and its
amendments, and the retrospective effect of the Bill is necessary to provide certainty
for those decisions and actions.
To ensure compliance with the LIA in relation to more recent changes made in 2007
to the Poisons Standard, a new Poisons Standard was registered in FRLI on 19
December 2007, and came into force the day after that registration date.
The Bill provides for "just terms" compensation in the event that the measures
contained in the Bill could be construed in any way as amounting to an acquisition of
property in a particular case.
The Bill also includes an amendment to the Act stating that section 42 of the LIA,
relating to the disallowance of legislative instruments, does not apply in relation to the
Poisons Standard and amendments made to it. This provision is appropriate because
it recognizes that Commonwealth instruments forming part of an intergovernmental
scheme should not be unilaterally disallowed, and this exemption is consistent with
section 44 of the LIA. The exemption will also ensure certainty in the continuing
application of State and Territory laws which refer to the Poisons Standard.
FINANCIAL IMPACT STATEMENT
The Bill provides for a right to compensation in the event that the measures contained
in the Bill could affect any property rights so as to amount to an acquisition of
property.
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THERAPEUTIC GOODS AMENDMENT (POISONS STANDARD) BILL 2008
NOTES ON CLAUSES
Clause 1: states that the short title of the legislation is the Therapeutic Goods
Amendment (Poisons Standard) Act 2008 (the Act).
Clause 2: sets the commencement date of the Act as the day on which it receives the
Royal Assent.
Clause 3: has the effect of amending the Therapeutic Goods Act 1989 in the manner
set out in Schedule 1 to the Act.
Schedule 1 - Amendments to the Therapeutic Goods Act 1989
Item 1. Item 1 inserts a definition of the Federal Court in subsection 3(1) of the
Therapeutic Goods Act 1989 (the TG Act).
Item 2. Item 2 inserts new subsection 52D(4A) into the TG Act. New subsection
52D(4A) provides that, from the time this subsection commences to operate, which is
the day the Bill receives Royal Assent, an amendment to a current Poisons Standard
made under paragraph 52D(2)(a) of the TG Act, or a new Poisons Standard prepared
under paragraph 52D(2)(b) of the TG Act, will be treated as legislative instruments.
.New subsection 52D(4A) also provides that the disallowance process under section
42 of the Legislative Instruments Act 2003 (the LIA) will not apply to these
instruments.
Therefore, after this Bill commences to operate, any future instruments that are made
under paragraphs 52D(2)(a) or (b) of the TG Act , although required to be registered
on FRLI, will be exempt from the disallowance process set out in section 42 of the
LIA. This exemption from the disallowance process appears to be appropriate given
the need to ensure certainty in the continuing application of State and Territory laws
which refer to the Poisons Standard. It is also very similar in scope to an existing
exemption (section 44(1) of the LIA) which recognises that it is inappropriate for
Commonwealth instruments forming part of an intergovernmental scheme to be
unilaterally disallowed.
Item 3. Item 3 inserts new sections 52EA and 52EB into the TG Act. The effect of
these provisions is to deem all actions based on the Poisons Standard to have been
taken based on an instrument that complies with the LIA.
New Section 52EA
The purpose of this section is to reinstate, and make enforceable, the Poisons
Standard and any amendments made to it, that have not been lodged for registration,
or registered in, the FRLI in accordance with the requirements of the LIA, and that
may have been repealed by the operation of the LIA.
Subsection 52EA(1)
This subsection identifies the kinds of instrument that are included within the scope of
section 52EA, and notes that it applies to those instruments whether or not they are in
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force as at the commencement date of this section. The instruments covered by this
validating provision are the First Poisons Standard, and any instrument made under
paragraph 52D(2)(a) or (b) of the TG Act before the commencement of new section
52EA(1). The First Poisons Standard was the latest edition of the document known as
the Standard for the Uniform Scheduling of Drugs and Poisons, published by the
Australian Health Ministers' Advisory Council, at the time Part 6-3 was inserted into
the TG Act in 1999. The only Poisons Standard prepared by the Committee under
paragraph 52D(2)(b) of the TG Act was the Poisons Standard registered in FRLI on
19 December 2007. Therefore, all other instruments made before that date were
amendments to the First Poisons Standard.
Subsection 52EA(2)
This subsection makes it clear that section 42 (disallowance) of the LIA does not
apply, and is taken never to have applied, to the instruments described in subsection
52EA(1) - that is, the first Poisons standard and amendments made to it up to the
commencement of section 52EA.
Subsection 52EA(3)
This subsection provides that, in respect of any instrument set out in subsection
52EA(1) that was required to be registered under Division 2 of Part 4 of the LIA but
was not registered, the LIA has effect, and is taken always to have had effect, as if the
instrument had been lodged for registration immediately after it was made and had
been registered immediately after it was lodged for registration, and as if any other
requirement imposed by Division 2 Part 4 of the LIA in relation to the instrument had
been met. Subsection 52EA(3) therefore deems a relevant instrument as having been
properly registered on the FRLI. This will mean that the instrument will be
enforceable.
Subsection 52EA(4)
This subsection provides that, in respect of any instrument set out in subsection
52EA(1) that was required to be registered under Division 3 of Part 4 of the LIA but
was not lodged for registration on or before the last day for lodging the instrument for
registration (the last lodgement day) worked out under section 29 of the LIA, the LIA
has effect as if the instrument had been lodged for registration on the last lodgement
day and had been registered immediately after it was lodged for registration, and as if
any other requirements imposed by Division 3 in relation to the instrument had been
met. Subsection 52EA(4) deems a relevant instrument as having been properly
registered on the FRLI and having met all other requirements for lodgement and
registration under Division 3 of the LIA. This will mean that the instrument will be
enforceable. This will also mean that the instrument will not be taken to have been
repealed.
Subsection 52EA(5)
This subsection provides that the word "register" has the same meaning as in the LIA.
New Section 52EB
This section provides for "just terms" compensation in the event the operation of
section 52EA could result in any acquisition of property.
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Subsection 52EB(1) provides that if the operation of subsection 52EA should result in
an acquisition of property from a person otherwise than on just terms, the
Commonwealth is liable to pay a reasonable amount of compensation to that person.
Subsection 52EB(2) allows a person to institute proceedings in the Federal Court for
the recovery from the Commonwealth of such reasonable amount of compensation as
the Court determines, in circumstances where the Commonwealth and that person
does not agree on the amount of the compensation.
Subsection 52EB(3) provides that the definition for the terms "acquisition of
property" and "just terms" has the same meaning as the respective definitions for
those references set out in paragraph 51(xxxi) of the Constitution.
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