explanatory Statement
Select Legislative Instrument 2008 No. 82
Issued by the Authority of the Minister for Competition Policy and Consumer Affairs
Trade Practices Act 1974
Trade Practices (Consumer Product Information Standards) (Cosmetics) Amendment Regulations 2008 (No. 1)
Subsection 172(1) of the Trade Practices Act 1974 (the Act) provides, in part, that the Governor-General may make regulations not inconsistent with the Act, prescribing all matters that are required or permitted by the Act to be prescribed or are necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Subsection 65D(1) of the Act provides that a corporation shall not, in trade or commerce, supply goods that are intended to be used, or are of a kind likely to be used, by a consumer, if there is a consumer product information standard for those goods and they do not comply with that standard.
Subsection 65D(2) of the Act provides that a regulation may, in respect of goods of a particular kind, prescribe a consumer product information standard consisting of such requirements as are reasonably necessary to give persons using the goods information as to the quantity, quality, nature or value of the goods. These requirements may relate to, among other things, performance, design, or construction of the goods.
The Trade Practices (Consumer Product Information Standards) (Cosmetics) Regulations 1991 (the Principal Regulations), sets out a mandatory consumer product information standard for cosmetics including requirements on how information about ingredients is to be displayed on the label of a cosmetic product.
The purpose of the Principal Regulations is to address a previous market failure whereby consumers did not have sufficient information about cosmetic ingredients displayed on the label to avoid, and/or obtain timely treatment for, adverse reactions caused by some cosmetics.
The purpose of the amendments to the Principal Regulations is to update the definition of flavour and its synonym aroma, so as to adopt the definitions which are used in the International Cosmetic Ingredient Dictionary. Using these definitions (instead of the current definition), would help establish universally understood meanings of flavour and aroma when used in cosmetic products.
Details of the Regulations are at Attachment A.
A full regulatory impact statement (RIS) process has been conducted to consider this minor change and other possible amendments to the Cosmetic Regulations. The peak industry body in Australia for cosmetics requested this minor change be made. The amendment to the definition of flavour and aroma is the only amendment considered necessary and this change is considered to have little impact on suppliers or consumers of cosmetic products.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003. For the purposes of section 17 of the Act, consultation undertaken in relation to the Regulations is detailed in the Regulation Impact Statement which is at Attachment B.
The Regulations commence on the day after they are registered on the Federal Register of Legislative Instruments.
Attachment A
Details of the Trade Practices (Consumer Product Information Standards) (Cosmetics) Amendment Regulations 2008 (No. 1)
Regulation 1 – Name of Regulations
This regulation provides that the name of the Regulations is the Trade Practices (Consumer Product Information Standards) (Cosmetics) Amendment Regulations 2008 (No. 1).
Regulation 2 – Commencement
This regulation provides that the Regulations commence on the day after they are registered.
Regulation 3 – Amendment of Trade Practices (Consumer Product Information Standards) (Cosmetics) Regulations 1991
Schedule 1 amends the Trade Practices (Consumer Product Information Standards) (Cosmetics) Regulations 1991.
Schedule 1 – Amendments
Item [1] before the definition of container in regulation 3, inserts a definition for aroma.
Item [2] replaces the definition of flavour in regulation 3 with another definition of flavour.
Overview
The Trade Practices (Consumer Product Information Standards) (Cosmetics) Amendment Regulations 2008 (No. 1) were enacted to update the existing Trade Practices (Consumer Product Information Standards) (Cosmetics) Regulations 1991. This amendment was introduced to address a gap in the understanding of terms used in the labelling of cosmetic products, specifically the definitions of 'flavour' and 'aroma'. By adopting the definitions from the International Cosmetic Ingredient Dictionary, the regulations aim to ensure that these terms have universally understood meanings when used in cosmetic products. The regulations were issued under the authority of the Minister for Competition Policy and Consumer Affairs, and the policy objective was to provide consumers with clearer and more consistent information about cosmetic ingredients, thereby facilitating informed choices and reducing the risk of adverse reactions. The enacting body was the Australian Parliament, as these regulations are a legislative instrument under the Legislative Instruments Act 2003.
Scope and Application
The Trade Practices (Consumer Product Information Standards) (Cosmetics) Amendment Regulations 2008 (No. 1) pertains to entities supplying cosmetic products in Australia, specifically targeting corporations engaged in trade or commerce. These regulations amend the existing Trade Practices (Consumer Product Information Standards) (Cosmetics) Regulations 1991, updating the definitions of "flavour" and "aroma" in alignment with the International Cosmetic Ingredient Dictionary. This change is intended to provide clearer and more universally understood meanings of these terms when used in cosmetic products, thereby enhancing consumer information and potentially reducing adverse reactions. The regulations apply nationally across Australia and are made under the authority of the Trade Practices Act 1974, which governs consumer protection and fair trading practices. While these regulations are designed to ensure compliance with consumer product information standards, they do not introduce new substantive requirements beyond the specified definitions, and no exclusions or exemptions are noted in the explanatory statement. The regulations will come into effect on the day after they are registered on the Federal Register of Legislative Instruments.
Key Provisions
The Trade Practices (Consumer Product Information Standards) (Cosmetics) Amendment Regulations 2008 (No. 1) (the Regulations) amend the Trade Practices (Consumer Product Information Standards) (Cosmetics) Regulations 1991 (the Principal Regulations) to update the definitions of flavour and aroma in relation to cosmetic products. Regulation 3 of the Regulations amends the definition of aroma and replaces the definition of flavour in the Principal Regulations, aligning them with the definitions used in the International Cosmetic Ingredient Dictionary (Schedule 1). This amendment is aimed at establishing universally understood meanings of these terms in the context of cosmetic products.
The Regulations impose obligations on entities supplying cosmetic products within Australia, requiring them to comply with the updated definitions of flavour and aroma as set out in the amended Principal Regulations. Suppliers must ensure that their cosmetic products meet these standards, particularly in relation to the labelling and disclosure of ingredients. Failure to comply with the amended definitions could result in non-compliance with the consumer product information standards under the Trade Practices Act 1974.
The Trade Practices Act 1974 imposes civil penalties for breaches of consumer product information standards. Specifically, under section 65D(1), a corporation may be liable for supplying goods that do not comply with a prescribed consumer product information standard. The penalty for contravening these provisions can include significant fines, with the maximum penalty for corporations being $1.1 million and for individuals being $220,000 as per section 132 of the Act. Additionally, the Australian Competition and Consumer Commission has the authority to seek injunctive relief and other remedies to enforce compliance with the consumer product information standards.