REGIONAL IMPACT ASSESSMENT STATEMENT

Department: DEPARTMENT OF PREMIER AND CABINET DEPARTMENT FOR ADMINISTRATIVE AND INFORMATION SERVICES

1. Title: REGULATIONS FOR SECURITY SENSITIVE SUBSTANCES -AMMONIUM

NITRATE (SSAN)

2. Issue:Community safety and security from terrorist attack posed by the misuse of ammonium nitrate as a bomb in SA and other jurisdictions.

Ammonium nitrate can be used in explosives and has a history of terrorist use. In accordance with national security objectives, all Australian governments agreed on 25 June 2004 to a national approach to ban access to high concentrations of ammonium nitrate (greater than 45 per cent) which is to be named security sensitive ammonium nitrate (SSAN) for other than specifically authorised users.

This agreement has resulted in the establishment in each state and territory of a licensing regime for the use, storage and transportation of SSAN. The licensing regime will ensure that SSAN is only accessible to persons who will store and handle it safely and securely.

It is not proposed to ban ammonium nitrate but regulate its transport, use and storage. It is recognised that there is a high use of ammonium nitrate and there are no alternatives that provide exactly the same effect and at the same cost.

3. Region(s):The regulations cover all of South Australia.

The regions that will be most affected are ones in which horticultural businesses require high concentration (45 per cent and above) of ammonium nitrate fertilizer and regions in which mining activity (primarily open cut) or mining related activity take place, that is:

(Northern) Adelaide Plains, Adelaide Hills, Murray Mallee, Riverland (for horticulture); and

Far North of the state (for mining).

Ammonium nitrate has been an unregulated good and therefore very little information on its usage or the number of persons who have unsupervised access to it is available. There is little information on how many of the current users of ammonium nitrate in agriculture would be able to use concentrations of less than 45 per cent and how many will still require concentrations of 45 per cent (and higher). The use and likely impact of the regulations in specific regions with high levels of horticultural activity, therefore has been difficult to assess with a high degree of precision.

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Uses of ammonium nitrate in Australia

Ammonium nitrate is not manufactured in South Australia. There are four manufacturing plants in Australia; Kwinana Western Australia (CSBP Wesfarmers), Newcastle NSW (Orica), Gladstone Queensland (Orica) and Moura Queensland (Queensland Nitrates). Importation of ammonium nitrate from overseas generally comes through ports in Queensland and Western Australia (the largest mining states). Most imported ammonium nitrate comes from South Africa and China, with Lithuania and the Ukraine supplying a much smaller amount of largely fertilizer grade AN.

Between 90 and 95 per cent of ammonium nitrate in Australia is used in the mining industry (as an explosive) the remaining is used in the agricultural sector (as a fertilizer). The most recent Agricultural Census by the Australian Bureau of Statistics shows that 3,497 farms (in Australia) used a total of 36,054 tonnes of ammonium nitrate fertilizer in the year ending June 2001. The main users of ammonium nitrate fertilizer are horticulturalists (25,000 tonnes) followed by the dairy industry. Ammonium nitrate fertilizer amounts to less than 1% of all fertilizer used in Australia. Ammonium nitrate fertilizer’s most common usage is for: side-dressing vegetables; tree and plantation crops; and for top-dressing rain-grown crops and pastures where ammonium volatilization loss (nitrogen lost as ammonia gas) may be high, such as dairy pastures in southern Australia during the drier times of year.

Agricultural usage of ammonium nitrate in SA

Table 1: ABS statistics by local government areas. Total 6794 tonnes for the year ending June 2001 (Those with less than 200 tonnes not listed)

Breakdown Tonnes

Loxton and Waikerie 1515

Renmark Paringa 1463

Southern Mallee 653

Mid Murray 496

Playford 328

Berri and Barmera 242

Alexandrina 236

Murray Bridge 201

In February 2005, Rural Solutions SA, Department of Primary Industries prepared a report on the Use of Ammonium Nitrate and Calcium Nitrate by South Australia Agriculture. The following information is taken from that report.

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Table 2: Ammonium Nitrate and Calcium Ammonium Nitrate Use in South Australia by Crop and Region

Crop/Industry Region Ammonium Nitrate (AN) Rate(kilograms per hectare)

Calcium Ammonium Nitrate (CAN) Rate (kilograms per hectare)

Remarks

Processing Potatoes

South East 0-330 150 Ranged from zero use to largest grower using 330kg/ha

Processing Potatoes

Murraylands NAP/AH

150-250 Use of AN assists in SG maintenance

Ware Potatoes Riverland - - -

Wine Grapes South East(SE)

Nil Nil Not used in SE

Wine Grape Riverland 100-150 - -

Turf Riverland/NAP/AH

20-50 - Occasional use for the rapid greening of turf, when timeframes are short for additional harvests of turf required. The turf industry on the whole has moved to other sources of nitrogen

Hydroponic herbs

SE Nil - Blended base fertilizers purchased from suppliers

Almonds Riverland 100-200

300

- Critical to early tree establishment using application of nitrogen with each irrigation event (fertigation).

Used in early part of season at flowering, early leaf development and at post harvest

Stone fruit Riverland 200-250 - Essential to advanced fertigation and Open Hydroponic systems and traditional systems

Carrots NAP 100-150 - Used in late autumn and early

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Crop/Industry Region Ammonium Nitrate (AN) Rate(kilograms per hectare)

Calcium Ammonium Nitrate (CAN) Rate (kilograms per hectare)

Remarks

spring production.

Carrots Murraylands 100-150 - Used in late autumn and winter and early spring production

Brassica's Murraylands, NAP AH '

150-200 - -

Onions Murraylands, NAP AH

10-150 200-250 Onion producers are applying AN and CAN in dry form via broadcast spreaders or in some cases as part of fertigation program applied during the early part of the growing season. AN and CAN have high levels of acceptance within producers using fertigation methods

Dairy Pasture SE and Lower Murray

Nil Nil Dairy industry utilises cheapest available form of N (urea).

Dairy SA advises very few, if any, dairy farmers use on pastures.

Canola SE Na - Use restricted to years when the soil temperature is low and moisture levels are moderate to high

Over the past eighteen months a decision by many fertilizer manufacturers nationally and in SA not to supply ammonium nitrate fertilizers in combination with the boom in the mining sector has contributed to a decline in the availability of ammonium nitrate for use as an agricultural fertilizer.

Horticulturalists

The following information, on number of growers likely to be affected was provided during the initial consultations undertaken with key stakeholder groups between December 2004 and April 2005.

The Virginia Horticulture Centre represents 700 members out of estimated 1,200 growers. Many of these growers are not active (‘dormant’) and the Centre’s membership predominately comprises growers within Mallala, Salisbury, Angle Vale,

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Two Wells and some in other regions of the state (e.g. Southern Vales). Growers range from large companies (e.g. Mondello and Comit), a number of mid-sized growers and a large number of small greenhouse growers. A high proportion of small greenhouse growers are Vietnamese, Khmer, Cambodian and Indian.

The SA Farmers Federation (SAFF) indicated that within agriculture the horticultural sector is likely to be the most affected by the proposed regulations in SA. SAFF indicated that the sector is represented by many organisations. Some of these are regionally based eg Virginia Horticultural Association and others are sector or membership based, e.g. Horticulture Australia; AUSVEG; SAFF. SAFF noted that SA has a high number of broad acre Horticulturalists (potato & carrot growers).

The Apple and Pear Growers association indicated that 80 per cent of their membership is in the Adelaide Hills region, one per cent in the Riverland, nine per cent are in the South East. The Association estimated that in SA the number of growers that might be affected by the new regulatory regime were 600 vegetable growers, 800 citrus growers, 400 apple, pear and cherry growers. They suggested that grape and dairy farmers would not be affected. The Dairy Farmers Association confirmed that the regulatory regime would not significantly impact on Dairy Farmers in SA.

The Industry Development Board Horticulture member in Mt Gambier indicated that horticulture in the South East is highly mechanised and on a very large scale. Potato growers mainly produce for frozen ‘chip’ production and a small number of growers produce for the fresh food sector. The Board indicated that the majority of farmers in the South East use CAN or Urea in preference to ammonium nitrate.

Onion growers, in the Riverland and Adelaide Hills Region, indicated that it was vital for them to have access to ammonium nitrate to fertilize crops during June and July. The sector compromises a small number of family owned businesses that produce almost all of the onions available in the market place.

There is no information available on the numbers of growers in regions that will need to continue to use 45 per cent concentrated ammonium nitrate or whether other product blends would meet their requirements.

Fertilizer companies have begun to supply blends, which contain less than 45 per cent ammonium nitrate. The Department of Primary Industries and Resources SA has been advised that companies anticipate that the majority of Agents, Dealers and farm customers will switch to blends containing less than 45 per cent ammonium nitrate rather than obtain the necessary SSAN licences. Overall these companies suggest that:

The overall demand for ammonium nitrate based fertilizers in South Australia will remain relatively unchanged at 4 - 5 000 tonnes per annum of Calcium Ammonium Nitrate (Cal- Am) and 6-8000 tonnes per annum of Ammonium Nitrate.

Most Cal-Am will be blended into non-SSAN fertilizer blends. Few resellers and farmers are expected to obtain a SSAN licence. The amount of SSAN imported into Adelaide will not change greatly, however

much of it will be diluted into products that will not be classified as SSAN.

To assist farmers wanting to use non-SSAN grade ammonium nitrate products, PIRSA will include relevant links and information on their website. SafeWork SA will continue to work with PIRSA and the Office of Regional Affairs to identify and

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address issues as they emerge during the six-month transition period for the introduction of the regulations

Miners

The majority of mining takes place in the northern regions of SA. An estimate of the combined membership of the four mining associations is approximately 150 miners. Small operators tend to use ammonium nitrate only when required rather than store large amounts in one place and may have only small amounts e.g. one to two 40kg bags on hand at any one time. Although opal miners have alternative explosives for blasting, familiarity with ammonium nitrate as an explosive means that small-scale miners will continue to use it. A small number of large-scale mining companies operate in S.A. These companies use a great deal of ammonium nitrate and may store 100 tonnes or more in one location at a time. It is anticipated that large-scale mining companies will continue to use ammonium nitrate as an explosive.

4. StakeholdersThe key stakeholders that will be affected by the regulation of ammonium nitrate include:

Horticulturists: onion growers, potato growers, almond growers, citrus growers, stone fruit growers, carrot growers and Brassica growers.

Mining Industry, including coal and opal miners.

5. Background:In December 2002, the Council of Australian Governments (COAG) agreed to a national review of the regulation, reporting and security around the storage, sale and handling of hazardous materials. The first hazardous material examined was ammonium nitrate. Ammonium nitrate was identified as a priority because of its history of terrorist use and concern about its ready availability. The aim of the review was to identify means to limit opportunities for the illegal/unauthorised use of hazardous materials through either banning the material or improving Australia’s regulation, monitoring, control and education systems.

In April 2004, prior to the June 2004, Council of Australian Governments (COAG) meeting, the SA Government agreed to develop regulations under the Explosives Act 1936 restricting the use of ammonium nitrates in South Australia.

In June 2004 COAG agreed to regulate the use of ammonium nitrate through a nationally agreed process that recognised control of explosives as state and territory responsibility. It was agreed that each state would develop its own regulatory regime based on a set of agreed COAG principles.

Security Sensitive Ammonium Nitrate (SSAN) was defined as ammonium nitrate, ammonium nitrate emulsions and ammonium nitrate mixtures containing greater than 45 per cent ammonium nitrate, excluding solutions. (These include dangerous goods under the Australian Dangerous Goods Code with the UN numbers 1942, 2067, 2068, 2069, 2070, 2071, 2072, 3375 and 3139 where applicable. Forty-five per cent was chosen because it is the maximum percentage of ammonium nitrate allowed under the United Nations Dangerous Goods Codes (entry UN2071, an ammonium nitrate fertilizer of Class 9 (miscellaneous), with unrestricted combustible material).

The principles stated that persons seeking access to SSAN need to demonstrate a

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legitimate need for access to SSAN; Provide safe and secure storage and handling procedures; Report any loss, theft, attempted theft or unexplained discrepancy; and Undergo ASIO Politically Motivated Violence (PMV) and National Police Certificate (NPC) Check.

The principles provided for:

Development of a nationally consistent, effective and integrated approach of control to restrict access of security sensitive ammonium nitrate to those with a legitimate need (i.e. mining or agricultural use);

Accountability at all stages of the ammonium nitrate supply chain, in order to address security and safety concerns;

Establishing a framework for control, which may be applicable for other materials of security concern.

Since COAG consideration of the review there has been significant interest in both the United States of America (USA) and the European Union (EU) in implementing tighter regulation of ammonium nitrate.

In the USA, the "Secure Handling of Ammonium Nitrate Act of 200" Bill was introduced into the Senate on 26 May 2005. The Bill has been referred to the Committee on Homeland Security and Governmental Affairs.

The Commission of the European Communities issued a communique on 18 July 2005 entitled “On Measures to Ensure Greater Security in Explosives, Detonators, Bomb Making Equipment and Firearms". The communique outlines a number of proposals and specifically targets ammonium nitrate, proposing “modification of current Regulations in order to introduce the appropriate requirements to sell ammonium nitrate fertilizer only to authorised persons and upon proof of use for solely agricultural purposes. In addition, a proposal to oblige companies selling such material to notify law enforcement authorities of any suspicious transactions could also be explored. Member States should also be encouraged to take similar measures with regard to fertilizers not falling within the scope of the Regulation."

In addition the communique addresses storage and transport of dangerous goods (as does the proposed Australian regime).

It is clear from these reports that both the USA and the EU are moving towards tighter regulation surrounding ammonium nitrate in recognition of the fact that it is a dangerous substance.

Regulations for SSAN are now in place in Queensland, New south Wales, Victoria, Canberra, Tasmania and the Northern Territory. Western Australia will implement regulations in 2006.

6. Summary of key elements of the Regulations:From early 2006 onwards in SA users of SSAN will be able to apply for a licence or permit SA to use, manufacture, store, transport, supply, import, export, sell and dispose of ammonium nitrate.

Following making of the regulations, a six-month transition period will be provided to enable people intending to apply for a licence or security clearance and improve their storage and security arrangements adequate time to do so.

Anyone applying for a SSAN licence will have to:

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Demonstrate a legitimate need for access to SSAN o Provide safe and secure storage and handling procedures

Report any loss, theft, attempted theft or unexplained discrepancy to SafeWork SA and Police

Undergo background checking — National Police Certificate (NPC) and ASIO Politically Motivated Violence (PMV) check

Be a minimum of 18 years of age Provide verifiable proof of identity, and if a company, details of the company.

Under the regulations the use of ammonium nitrate for household or domestic purposes or as a fertilizer on recreational grounds e.g. golf courses will be prohibited.

Licences or permits may be issued for up to 3 years.

An applicant for a licence and any staff required to have unsupervised access to SSAN will need to be security cleared. Both checks will be arranged through SafeWork SA, and be facilitated by the SA Police (SAPOL).

This will involve obtaining a NPC and an ASIO PMV check. National Police Certificate issued for other purposes in the year proceeding application for SSAN in SA or another jurisdiction will be accepted by the SafeWork SA at no additional cost to applicants or their staff.

The ASIO PMV check is a process through which ASIO runs the applicants name against an existing database of persons of interest.

Security checks are now required for persons in a broad range of industries including aviation and maritime industries.

Employers will not have access to personal information regarding the security status of their employees. The SafeWork SA will simply inform applicants if a person is unable to have unsupervised access to SSAN.

Applicants may appeal to SafeWork SA in the first instance. If they are dissatisfied with the outcome they may appeal to the Administrative and Disciplinary Division of the District Court.

This appeal process is identical to that for appeals about fireworks licences.

Applicants or staff may contact SAPOL to clarify any inaccuracies in the results of their NPC.

In the case of an adverse result to a PMV check, the Australian Federal Police will write directly to the individual concerned and inform them that they have 28 days within which to request a review of the results.

Three user-specific application forms have been developed for activities associated with using SSAN. These are application for licences/permits to use SSAN as an explosive, as fertilizer and for other purposes. If a licence or permit for more than one activity (that is use, manufacture, store, transport, supply, import, export, sell and dispose of ammonium nitrate) is required an applicant will be required to lodge one application, indicate the appropriate licences/permits required and pay a single fee of $15 per year irrespective of the number of licences sought.

In recognition of the need to provide training and support to farmers and horticulturalists as part of the implementation process (including provision of

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information in languages other than English),

SafeWork SA and the Department of Primary Industries have developed a tender for development and delivery of an information package which can be modified for use in other sectors, eg. mining and transport.

Information on alternative fertilizer products containing less than 45 per cent concentration of ammonium nitrate will be made available to horticulturalists as part of the implementation process.

Information on the new regulatory arrangements has also been translated into seven community languages and forwarded to horticultural organisations and multicultural groups in the Riverland and Virginia.

A condition of licence is that applicants will need to prepare a security management plan for SSAN. Appropriate security has been defined as under lock and key or constant supervision.

The security management plan, provided to SafeWork SA, will need to list persons who will have unsupervised access to SSAN. Persons having unsupervised access to SSAN will need to be security cleared.

Once a security management plan has been developed it will only need to be amended or updated if circumstances change over a three-year licence or permit.

Licences or permits issued by Regulatory bodies for SSAN in other jurisdiction will be recognised by the SafeWork SA. Technically the applicants will need to apply for a licence in SA and will be issued the corresponding SA licence or permits at no cost to applicants.

Currently companies that transport large quantities of SSAN through SA to another jurisdiction are not required to notify SafeWork SA. In order to remedy this situation the regulations will require that companies apply for an import licence to enter SA. No application fee will be charged, provided applicants have a relevant and current licence for SSAN in another jurisdiction. This ensures that the SafeWork SA can properly monitor transport of SSAN through SA and manage any potential safety and security related risks.

7. ConsultedDuring December 2004 and April 2005 the Security and Emergency Management Office, Department of the Premier and Cabinet and SafeWork SA, Department for Administrative and Information Services consulted with key industry groups in South Australia to identify the likely impact on industry of the proposed regulations. Meetings were held with following groups and/or they were contacted directly by telephone.

Riverland Horticultural Council Flinders Ports SA Road Transport Authority (SARTA) Owner Drivers of South Australia Australian Rail Track Corporation (Industry Safety forum) Citrus Growers SA Plastics and Chemicals Industries Association Cross Trade Commodities (an importer) Virginia Horticulture Centre

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South Australian Farmers’ Federation Owner Drivers’ Association Advisory Board of Agriculture Mintabie Miners’ Association Fertilizer Industry Federation of Australia (FIFA) AgSafe Limited Riverland Multicultural Forum Nursery and Garden Industry SA (Inc.) Local Government Association Extractive Industries Association UEE Gladstone NRG Flinders Industry Development Board - Horticulture SA Dairy Farmers’ Association Strawberries Australia Business SA SA Unions and relevant unions SA Freight Council ChemCert Board Rivapak Mypolonga Traders SA Fresh Fruit Growers’ Association Yandilla Park Century Orchards Citrus Board of SA Coober Pedy Miners’ Association Opal Miners Enterprises ORICA Riverland Development Corporation Nursery and Garden Industry SA Inc.

There was a four-week public comment period on the draft regulations in August 2005. Over 1,500 letters were sent out inviting comment. Twenty responses, including a number of queries were received and from the following individuals and organisations:

SA Farmers’ Federation (SAFF) The Andamooka Progress and Opal Miners’ Association of SA SA Freight Council Inc. Riverland Horticultural Council Virginia Horticultural Centre Cement Concrete and Aggregates Australia T. Bubner (Farmer) Apple and Pear Growers’ Association of SA Inc Australian Explosives Industry Safety Group Inc Orica Mining Services Australia Pty Ltd Penrice Quary and Mineral T. and M. McKenzie V.S. Gussmann (Opal miner) Plastics and Chemical Industries Association (PACIA) C Forbes-Simmons (Laboratory Manager, Education Department)

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CHC Helicopters (Australia) Vitrade Australia Pty Ltd Primo Meat Adelaide Rock Drilling Pty Ltd Business SA

8. ConsultationFollowing the initial consultation with key industry groups the following issues were identified:

The need for a consistency of approach (harmonization) between states. Minimum paperwork and costs to comply with the regulatory regime in SA

(information provided in simple language, cost associated with regulations kept to a minimum and minimum duplication).

Training and support provided to farmers and horticulturalists as part of the implementation process (including provision of information in languages other than English).

The need to allow at least six months for businesses to establish systems and processes before requiring that they fully comply with all the requirements.

The need to specify what industry will need to do to in order to comply with inspection and auditing processes.

The issues identified informed development of draft SSAN regulations, and the draft technical notes and explanatory material that were made available during the four-week public comment period in August 2005. All existing explosives licence holders and the organisations contacted in the initial consultation process were notified of the availability of the draft regulations and other material. Advertisements were placed in all major metropolitan and regional papers. Information and resources developed were made available on the SafeWork SA website. Packages of the draft material were sent to all those previously consulted, along with a range of other organisations assessed as potentially having an interest in the material and individuals requesting information as a result of the public call for comment.

The majority of the concerns identified by way of public comment related to conditions of licence and the method chosen to implement the regulations within South Australia rather than the drafting of the regulations. The issues identified were used to develop resources and information to support the public consultation on the draft regulations and planned implementation of the regulatory regime in SA. Further work to resolve these issues was undertaken during the four- week public consultation on the draft regulations in August 2005.

Transport Operators

The majority of Mining and Agricultural Companies dealing with SSAN also transport their own products. During the initial consultation phase (December 2004 to April 2005) meetings were held with transport industry groups including, Flinders Ports, SA Road Transport Authority (SARTA), Owner Drivers of South Australia, Australian Rail Transport Council and transport unions. Key issues identified by operators at these initial discussions are outlined below:

Concerns

The need to ensure a ‘level playing field’

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Clarifying (particularly for Rail) who would need a licence. Cost impact of any new regulations on a sector operating under tight profit

margins Minimising the administrative burdens to reduce impact on transport operators Minimising cost of licences and security checks for operators working across

borders

Responses

The COAG principles outlined the agreed regulatory arrangements that are required in each jurisdiction for the whole SSAN supply chain. Regulations for SSAN are now in place in Queensland, New south Wales, Victoria, Canberra, Tasmania and the Northern Territory. Western Australia will implement regulations in 2006.

In SA, the cost of a licence application has been set at $15 per year ($45 for a three year licence) is the lowest fee in Australia for a SSAN licence/permits or SSAN application form. If a licence or permit for more than one activity (that is use, manufacture, store, transport, supply, import, export, sell and dispose of ammonium nitrate) is required an applicant will be required to lodge one only application, indicate the appropriate licences/permits required and pay a single fee of $15 per year irrespective of the number of licences sought.

The regulations also allow the waiver of specific fees in some circumstances e.g. financial hardship.

National Police Certificate (NPC) issued for other purposes in the year proceeding application for SSAN in SA or another jurisdiction will be accepted by the SafeWork SA at no additional cost to applicants or their staff.

Three user-specific application forms have been developed for activities associated with using SSAN. These are application for licences/permits to use SSAN as an explosive, as fertilizer and for other purposes.

The SafeWork SA has clarified that a licence will be required by the owner or person in control of the transport activity i.e. in the case of Trains the company operating the train, (as is the case with Dangerous Goods legislation and other accreditation/licensing). A key factor as to whether train drivers need to undergo security clearances is whether they have unsupervised access to SSAN. If the containers on a train are sealed then eg. train drivers won’t need to undergo security checks.

Feedback received from transport operators following these initial discussions indicated that transport operators perceived that there would be no impacts on their sector.

The issues raised by all stakeholder groups were incorporated in to the draft regulations and planned implementation of the regulatory regime in SA. As a part of the four-week consultation on the draft regulations SafeWork SA wrote to 1,500 organisations, including South Australian and national transport operators. (No submissions received from transport operators.)

A few businesses (e.g. Strawberries Australia) within horticulture voiced concerns regarding the imposition of any additional regulations, which they believed would impact negatively on sector, which they suggest, operates with very low profit margins. Some horticulture groups expressed strong views opposing government regulation (e.g. Apple and Pear Growers Association, Riverland Horticultural

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Council) or the need for security checks.

The majority of respondents indicated strong support for initiatives that supported community safety. Three submissions from representatives of the horticultural sector indicated that they do not support restrictions to use agricultural use of ammonium nitrate. The SA Farmers Federation (SAFF) and the Apple and Pear Growers Association proposed monitoring of ammonium nitrate be done through quality assurance schemes or the chemcert program rather than by compliance- based regulation.

Implementing these suggestions in SA would represent a significant step away from the regulatory system agreed by COAG in June 2004.

SAFF also suggested that farmers be compensated for implementing security measures required.

Comments received from the other respondents ranged from no comment to very detailed comment on the draft regulations. Comments from groups representing the mining industry and PACIA were echoed in the Business SA submission.

9. MitigationThe key issues identified are outlined below:

Powers of SA Regulator:

Concern:

Each jurisdiction has used either explosives acts or developed new acts (Victoria) to implement the requirements outlined in the COAG principles.

Response:

Acts vary in relation to powers conferred to Regulators. This may contribute to a perception of greater powers for SafeWork SA. The powers provided to SafeWork SA in relation to SSAN are consistent with those conferred under the Explosives Act 1936 in relation to other explosives. The fact that SafeWork SA has a degree of flexibility in how the regulations will be administered will arguably benefit licence holders.

Classification of ammonium nitrate as an explosive:

Concern:

Mining companies in SA and other jurisdictions have consistently objected to use of explosives legislation to regulate SSAN. (The major reason for this is that insurance costs will increase once ammonium nitrate is classified as an explosive.)

Response:

Regulating SSAN under Explosives legislation reflects the regulatory system agreed by COAG in June 2004.

Import licence to bring ammonium nitrate into SA

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Concern:

The mining industry has raised concern that import, has been interpreted as bringing SSAN across state borders is against Section 92 of the Constitution.

Response:

Advice to Government indicates that this provision is not against Section 92 of the Constitution. Ammonium nitrate is a highly dangerous substance and a significant amount of ammonium nitrate used in Australia is transported through SA and not used by industry within the State. The requirement of import license allows SafeWork SA to monitor flow of the substance through this State for public safety and security purposes. No application fee will be charged, for an import licence, provided applicants have a relevant and current licence for SSAN in another jurisdiction.

Annual returns

Concern:

The mining industries has raised concerns regarding the need for annual return of information regarding any changes citing that this is not required in other jurisdictions.

Response;

Qld, NSW and Vic do not require annual updates to their security plans or other information provided to Regulators, SA has adopted a different approach on the basis of the level of risk to community security and safety. Annual updates will not be compulsory, however the SafeWork SA needs to be informed if circumstances change over a three-year licence period i.e. any changes that take place to personal who have unsupervised access to SAAN or in relation to the method of storage of SSAN. The update ‘prompt’ will assist the licence holder to readily inform SafeWork SA of any change in the past 12 months.

Auditing costs

Concern:

It was proposed in the draft regulations that external audits, at the expense of the licence holder or applicant might be required in certain circumstances.

Response:

This provision has been removed from the Regulations. SafeWork SA Inspectors will audit compliance with the regulations. Licence holders and applicants will not be charged for audits.

National process for security clearances

Concern:

Mining companies operating across state borders have suggested that they would prefer a single national process for security clearances rather than deal with

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(potentially) eight different agencies.

Response:

Costs and information provided within National Police Certificates vary according to administrative arrangements and legislation governing release of criminal information within each jurisdiction. The arrangements proposed for security clearances through SafeWork SA and SAPOL are consistent with nationally agreed arrangements. The SafeWork SA will accept National Police Certificate (NPC) issued for other purposes in the year proceeding application for SSAN, including those issued in other jurisdictions, at no additional cost to applicants. A single national process for security clearances (National Police Certificate (NPC) and PMV checks) has some merit. Establishment of a single national process, however, is likely to take some time.

Mutual recognition of licences

Concern:

A number of large mining companies operating across state borders and some sections of the horticultural industry have suggested that SSAN licences or permits issued in one jurisdiction should be recognised in all others.

Response:

The SSAN regulations require SafeWork SA to administratively recognise licences or permits issued for the same purpose. This will be achieved by issuing South Australian licences or permit to applicants at no cost.

10.Summary of Impacts and AnalysisECONOMIC FACTORS

The cost of a licence application has been set at $15 per year ($45 for a three year licence) is the lowest fee in Australia for a SSAN licence/permits or SSAN application form.

If a licence or permit for more than one activity is required an applicant will be required to only lodge one application, tick the appropriate licences/permits required and pay a single fee of $15 per year irrespective of the number of licences sought.

The regulations allow the waiver of specific fees in some circumstances e.g. financial hardship.

Security clearance checks consisting of National Police Certificates and ASIO Political Motivated Violence Checks will cost $63. National Police Certificates will be required every 3 years (the term of the licence) and will be subject to indexation (the cost may increase annually). ASIO Political Motivated Violence (PMV) checks costing $19 will only be required once.

The regulations will have little impact on the majority of regions within South Australia. The impacts will be felt in regions with high levels of horticulture and mining industries.

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Table 3: Costs to applicants for SSAN licence in SA over six-year period (NPC costs are subject to indexation)

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Licence holder Licence application fee National Police Certificate PMV check

$15

$44

$19

$15 $15 $15

$44

$15 $15

TOTAL $78 $15 $15 $59 $15 $15

Additional personshaving unsupervised access to SSAN -listed on Licence holders security management plan

National Police Certificate PMV check

$44

$19

- - $44 - -

TOTAL amount for each additional employee

$63 - - $44 - -

Horticulture

There may be a minor impact on horticulture production within the Riverland and North Adelaide Plains. The true impact on regions with high levels of horticultural industries is unknown because of factors other than the regulations themselves. A key attraction to farmers of ammonium nitrate fertilizer has been its low cost. Recently, high demand and a reduced availability have contributed to higher costs for high concentrate (i.e. greater than 45 per cent) ammonium nitrate fertilizers. This increase in cost can be also attributed to:

The recent expansion to mining in Australia and overseas (e.g. China) has created a demand for ammonium nitrate for use as an explosive and a decline in the availability in Australia of ammonium nitrate for use as an agricultural fertilizer.

A decision by many fertilizer manufacturers nationally and in SA not to supply ammonium nitrate fertilizers.

For horticulture there are now only two fertilizer products available that will be covered by the proposed regulations. These are ammonium nitrate and calcium ammonium nitrate. Incitec Pivot Ltd is the only Company producing high concentration of ammonium nitrate in Australia. All other high concentrate (i.e. greater than 45 per cent) ammonium nitrate products are imported into Australia. Many Fertilizer companies have now reformulated blends of fertilizer to be below 45 per cent ammonium nitrate.

As a result many farmers in SA and other jurisdictions have increasingly moved to the use of other fertilizers, blends that contain less than 45 per cent ammonium nitrate (below the threshold established by COAG), or liquid products containing ammonium nitrate (outside of the regulatory regime).

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It is anticipated that only those farmers that require SSAN because they need to fertilise when the ground is below 16 degrees centigrade (e.g. almonds or onions) or use sophisticated fertigation systems (eg. citrus) will need to apply for SSAN licences (i.e. they need to use concentrations of ammonium nitrate that are greater than 45 per cent).

The SA Farmers’ Federation and National Farmers’ Federation have both suggested that Governments should compensate farmers for costs associated with the regulatory regime. At this stage it is unclear what costs or other issues, directly attributed to the regulations, will be incurred by the small number of horticulturalists that will need to continue to use concentrations of 45 per cent ammonium nitrate fertilizers. Information on sources of alternative non-SSAN fertilizers will be available through the Primary Industries and Resources SA website and SafeWork SA will provide information on products that are classified as explosives. SafeWork SA will continue to work with Primary Industries and Resources SA and the Office of Regional Affairs to identify and address issues as they emerge during the six-month transition period for the introduction of the regulations.

Mining

Mining companies are familiar with existing regulations for Explosives have a greater capacity to accommodate introduction of the accountability requirements for SSAN because they already have systems in place for other explosives. During the consultation process on the development of the regulations, mining companies indicated that they could not identify cost impacts until the regulations have come into force.

It is anticipated that the small-scale miners in Andamooka and Coober Pedy will have the greatest concerns regarding the introduction of regulations for SSAN. However, in comparison to the horticultural sector many opal miners already have licences to use Explosives and are familiar with and have available secure storage for explosives under the Explosives Act.

SafeWork SA will continue to work with Department of Primary Industries, and Office of Regional Affairs during the six-month transition period to identify and minimise the negative impacts of the regulations on regional South Australia.

SOCIAL FACTORS

Regulating the use, transport and storage of ammonium nitrate will enhance community safety by restricting access to the product by potential terrorists. Regulations will only impact on families and businesses using SSAN products. Members of farming families who participate in handling fertilizers, or operate fertigation systems will be required to undergo security checks, along with employees.

Miners are required to have licences and National Police Certificate (NPC) for explosives licences in SA. There will be a minimal impact on family budgets or livelihoods for miners from the regulations.

ENVIRONMENTAL FACTORS

There are no significant positive or negative environmental impacts from regulation of fertilizers with 45 per cent concentration of ammonium nitrate and/or the use of alternative fertilizers or regulation of SSAN in relation to mining activities.

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The main use of ammonium nitrate is in the Riverland and some in the northern Adelaide Plains through fertigation systems. There is potential for nitrate to be leached into groundwater systems, although these irrigation systems are very advanced, and monitored to minimise deep drainage of water.

Some soil and climatic conditions may favor certain fertilizer types over others (for example some nitrogen based fertilizers may not be appropriate for soils prone to sodicity). These possible environmental impacts are handled through Natural Resource Management and agricultural production education and training programs.

Where calcium ammonium nitrate or ammonium nitrate is spread on broad acre crops and greenhouses direct to the soil, there is a higher risk of ammonium nitrate runoff into waterways and deep drainage.

Ammonium nitrate is monitored in water quality, and is generally well below critical limits for potable water supply along the River Murray and Adelaide Hills catchments.

The key is maintenance of an efficient irrigation (fertigation) system.

There is no difference in environmental impact between SSAN and non-SSAN nitrogen fertilizers

COORDINATION

The Council of Australian Governments (COAG) agreed to principles for regulating access to ammonium nitrate. A national working group, comprising of representatives from State and Territory Governments convened by the Department of the Prime Minister and Cabinet developed a series of guidance notes to assist jurisdictions in development of regulatory arrangements in each jurisdiction. In South Australia a government officers group was formed to assist with development of the regulations, and the consultation and communication strategies, comprising:

Department of The Premier and Cabinet SafeWork SA Primary Industries and Resources SA Department of Transport, Energy and Infrastructure (Transport SA) Office of Regional Affairs

In addition Department of the Premier and Cabinet and SafeWork SA worked with SAPOL to develop and implement the administrative arrangement required.

PREFERRED OPTION

The preferred option in SA has been to restrict the use of security sensitive ammonium nitrates to use in agriculture and mining rather than to ban the use of ammonium nitrate outright or ban the use of ammonium nitrate in agriculture e.g. which is the approach that has been adopted in Tasmania.

Completed RIAS must be submitted to the Office of Regional Affairs

Completed RIAS must be cited in the responsible agencies annual report.

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