AGRICULTURAL AND VETERINARY CHEMICALS LEGISLATION AMENDMENT (OPERATIONAL EFFICIENCY) BILL 2017 Explanatory Memorandum

Commonwealth of Australia Explanatory Memoranda

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AGRICULTURAL AND VETERINARY CHEMICALS LEGISLATION AMENDMENT (OPERATIONAL EFFICIENCY) BILL 2017

2016-2017-2018 THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA THE SENATE AGRICULTURAL AND VETERINARY CHEMICALS LEGISLATION AMENDMENT (OPERATIONAL EFFICIENCY) BILL 2017 REVISED SUPPLEMENTARY EXPLANATORY MEMORANDUM Amendments and New Clauses to be Moved on Behalf of the Government (Circulated by authority of the Minister for Agriculture and Water Resources, the Hon. David Littleproud MP)

AMENDMENTS TO THE AGRICULTURAL AND VETERINARY CHEMICALS LEGISLATION AMENDMENT (OPERATIONAL EFFICIENCY) BILL 2017 GENERAL OUTLINE The Agricultural and Veterinary Chemicals Legislation Amendment (Operational Efficiency) Bill 2017 (the Bill) will make minor and technical amendments to the Agricultural and Veterinary Chemicals (Administration) Act 1992 (the Administration Act), the Agricultural and Veterinary Chemicals Code Act 1994 (the Code Act) and the Agricultural and Veterinary Chemical Products (Collection of Levy) Act 1994 (the Levy Act), to realise operational efficiencies, reduce unnecessary regulation, clarify ambiguities and remove redundant provisions. The proposed government amendments to the Bill will amend the Administration Act and the Levy Act to establish a governance Board for the Australian Pesticides and Veterinary Medicines Authority (APVMA), cease the existing APVMA Advisory Board and amend the application provisions for industry annual reporting requirements. Establishing an APVMA Board will help strengthen the APVMA's governance arrangements to address operational, financial and performance deficiencies within the organisation. The Board will replace the Chief Executive Officer as the accountable authority under the Public Governance, Performance and Accountability Act 2013, and will set the APVMA's strategic direction, drive its operational performance, set an appropriate risk management framework and ensure greater accountability. The APVMA will continue to deliver independent and evidence-based decisions. The Board will have oversight of how the APVMA does its job by establishing the framework under which it operates, but will not make decisions, for example, under the Code Act. Day-to-day administration and decision making, such as approving individual product registrations and undertaking enforcement and compliance activities, will remain the responsibility of the APVMA Chief Executive Officer. The Administration Act provides for the establishment of the APVMA Advisory Board to provide advice and make recommendations to the Chief Executive Officer. The APVMA already has the ability to consult specifically or more broadly on issues with stakeholders beyond the APVMA Advisory Board. Ceasing the APVMA Advisory Board will contribute to the government's commitment to reducing duplication and improving efficiency through rationalising government bodies. The Advisory Board has not been operational since 2015. Part 1 of Schedule 1 to the Bill amends industry reporting requirements for annual returns about active constituents in agricultural and veterinary chemicals supplied in Australia. The government amendments amend the application provisions for the annual returns reporting requirements. These amendments allow the existing reporting requirements to continue to apply for the 2017-18 financial year and earlier financial years, and provide that the new annual returns reporting requirements would apply for the 2018-19 financial year and later financial years. This revised supplementary explanatory memorandum revises the previously circulated supplementary explanatory memorandum to clarify the role of the Board and incorporate feedback from industry stakeholders. 1

FINANCIAL IMPACT Costs to establish and maintain the Board in its first year of operation will be met through existing government appropriations. Future costs to maintain the Board will be met via the APVMA's cost recovery arrangements. The amendments to the industry reporting requirements will have no financial impact on the Australian Government Budget. STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS The proposed amendments are 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. The full Statement of Compatibility with Human Rights is at the end of this explanatory memorandum. 2

NOTES ON AMENDMENTS Amendment 1 - inserts a commencement provision at Clause 2 of the Bill so that measures to establish the APVMA Board and cease the APVMA Advisory Board commence on 1 July 2019. This will allow for the appointment of appointed Board members by the Minister, to coincide with the APVMA's permanent relocation to Armidale, New South Wales. Amendment 2 - this amendment replaces sub-item 4(1) in Part 1 of Schedule 1 to the Bill. Item 4 deals with the new annual return reporting requirements (in proposed section 35) and the new record keeping requirements (in proposed section 37) and from when they would apply. The wording of the current sub-item 4(1) means that there is the possibility of industry having to provide two annual returns for the 2017-18 financial year. A return is required under the current reporting requirements in section 69E of the Administration Act. If the Bill receives the Royal Assent before 30 November 2018, another return would be required under the new proposed reporting requirements in section 35 of the Levy Act. Amendment 2 prevents this by providing that the new annual return reporting requirements in proposed section 35 do not apply until the 2018-19 financial year and later years. This will provide industry with the appropriate notice for the new annual return reporting requirements in the Bill and remove any possibility of industry having to provide two annual returns. The record keeping requirements in new section 37 would not apply until the Bill commences and would not apply retrospectively. The record keeping obligations in section 37 only operate if there is an obligation under section 35. Therefore, the section 37 requirements will only apply for the supply of chemical products during the 2018-19 financial year (after commencement) and later financial years. Amendment 3 - this amendment replaces sub-item 8(1) in Part 1 of Schedule 1 to the Bill. Item 8 deals with when the current annual return reporting requirements continue to apply. Amendment 3 complements Amendment 2 by providing that the current annual return reporting requirements in section 69E of the Administration Act would continue to apply for the 2017-18 financial year and for earlier financial years. The amendment would preserve the current annual return reporting requirements for industry for the financial year 2017-18. The obligation in existing section 69EA to keep records for these returns only arises where there is an obligation to be complied with in relation to the savings provisions for section 69E. Amendment 4 - amends the Bill to insert new Schedule 1, Part 9--Board of the APVMA. Item 40 - repeals the definition of the Advisory Board in section 4 of the Administration Act. The definition of Advisory Board is obsolete consequential to item 50 below which repeals the provisions establishing the Advisory Board. Item 41 - inserts new definitions of 'appointed Board member' and 'Board' in the Administration Act. Items 42 and 43 - repeal the definitions of 'Board member' and 'Chair' in the Administration Act relating to the Advisory Board and substitute new definitions for these terms that are appropriate for the establishment of the APVMA Board. Item 44 - inserts the definition of 'paid work' in section 4 of the Administration Act to clarify what may be considered to be conflicting outside employment undertaken by Board members. 3

The definition is consistent with enabling legislation for other Australian Government bodies and with the Office of Parliamentary Counsel's Drafting Direction No. 3.6 Commonwealth bodies. Item 45 - repeals subsection 8(3) of the Administration Act that provides that the APVMA does not consult the APVMA Advisory Board for the purpose of this section when the Chief Executive Officer requests advice from the Board. This provision is obsolete consequential to item 50 below which repeals the provisions establishing the Advisory Board. Item 46 - repeals 'Chief Executive Officer' from paragraph 10(2)(c) of the Administration Act and substitutes 'Board'. The Board, rather than the Chief Executive Officer, will report directly to the Minister. Item 47 - repeals section 10A that relates to the Chief Executive Officer not being subject to direction on certain matters. The Board will be the accountable authority under the Public Governance, Performance and Accountability Act 2013 and corresponding provisions are now captured at new subsection 27G(3). The Chief Executive Officer will remain the Agency Head under the Public Service Act 1999 and corresponding provisions are now captured in new subsection 32(7). Item 48 - repeals the heading to Part 3 of the Administration Act 'Constitution of APVMA and Advisory Board' and substitutes a new heading, 'Constitution of APVMA, the Board and committees'. Item 49 - repeals section 13 of the Administration Act, which sets out that the APVMA consists of the Chief Executive Officer. This provision is inconsistent with the APVMA's status as a body corporate with a governing board. Item 50 - repeals Division 2, 3 and 4 of Part 3 to the Administration Act as these contain provisions relating to the APVMA Advisory Board, including its establishment, membership, appointment of members and procedures. Repealing these provisions ceases the Advisory Board. This item also inserts a new Division 2--'Board of the APVMA', which sets out the provisions of the Board, as follows. Division 2--Establishment and Functions of the Board Subdivision A--Establishment and functions of the Board Section 14 - Establishment of the Board This section establishes the Board of the APVMA. Section 15 - Functions of the Board This new section sets out the functions and powers of the Board of the APVMA. Functions include: a) ensuring the proper, efficient and effective performance of the APVMA's functions b) determining the objectives, strategies and policies to be followed by the APVMA c) doing anything incidental to or conducive to the performance of the Board's functions as outlined in paragraphs (a) and (b). This new section also empowers the Board to do all things necessary or convenient to be done for, or in connection with the performance of its functions. 4

The Board must have regard to section 1A of the Code set out in the Schedule to Agricultural and Veterinary Chemicals Code Act 1994 when determining objectives, strategies and policies to be followed by the APVMA. Section 1A of the Code sets out how the Code is to be implemented by the APVMA and provides the framework for the evaluation, approval, registration and control of the supply of agvet chemicals. The purpose of this measure is to prevent the potential for any inconsistency or conflict in the objectives, strategies and policies determined by the Board of the APVMA and the implementation of the Agvet Code and Agvet Regulations by the APVMA. The functions of the Board will complement, but not duplicate the duties of the Chief Executive Officer (as set out in section 32 of the Administration Act and amended by item 52 below). This split in responsibilities will ensure the Board provides the appropriate level of oversight, but will prevent it from getting involved in the day-to-day decision making of the APVMA (e.g. individual product registrations, compliance activities etc.), which could affect the APVMA's ability to deliver independent and evidence-based decisions. Section 16 - Limitation on functions and powers of the Board The 'Board of the APVMA' is a separate entity from the legal body corporate that is the 'APVMA'. Amended section 32 of the Administration Act (see below) provides that only the APVMA Chief Executive Officer may exercise any of the powers and perform any of the functions of the 'APVMA', and section 44 provides for the APVMA Chief Executive Officer to delegate these functions and powers. The Board of the APVMA cannot make decisions that the APVMA may make. The Board of the APVMA provides the appropriate level of oversight of the APVMA, but is prevented from getting involved in the day-to-day decision making of the APVMA. New section 16 makes this clear by specifying that the functions and powers of the Board of the APVMA do not include making decisions under agvet chemical legislation, other than certain parts of the Administration Act. Subdivision B--Board members Section 17 - Membership of the Board The Board consists of a Chair, the APVMA Chief Executive Officer and three members. A five member Board is appropriate as it balances the need to provide the necessary skills to effectively govern the APVMA with the cost of maintaining the Board. The Chief Executive Officer is included as an ex officio Board member to support informed and collective decision making and ensure the Board's policies are effectively integrated into day-to-day operations; for example, policies to support quality decision-making. Section 18 - Appointment of appointed Board members New subsection 18(1) allows for the Minister to appoint Board members by written instrument. Under this provision, the Minister will also appoint one of the appointed members as Chair. Board members will be appointed on a part-time basis. An instrument of appointment under subsection 18(1) would not be a legislative instrument by virtue of the existing exemption under item 8 in the table at subsection 6(1) of the Legislation (Exemptions and Other Matters) Regulation 2015. This provides that an instrument of appointment is not a legislative instrument. It is important that, as a group, the Board has the skills, knowledge and experience needed to oversee the APVMA. New subsection 18(2) sets out the range of skills that the government considers necessary to have within the Board for it to effectively exercise its responsibilities. 5

It provides that a person cannot be appointed as a Board member unless the responsible Minister is satisfied they have appropriate qualifications, skills or experience in one or more of the following:  financial management;  law;  risk management;  public sector governance;  science (including agricultural science and veterinary science);  public health or occupational health and safety. The risk management skills requirement in paragraph 18(2)(c) relates to risk management generally and is not limited to chemical risk management skills. New subsection 18(3) also provides that the Minister ensures, to the extent practicable, an appropriate mix of persons from the above fields of expertise so there is sufficient diversity in the skills, qualifications and experience on the Board. Section 19 - Term of appointment This new section specifies that an appointed Board member holds office for the period specified in their instrument of appointment. This period cannot exceed four years. New subsection 19(2) also sets out that appointed Board members may be eligible for reappointment for a second term (that is, appointed Board members may be appointed for no longer than eight consecutive years). While the 2003 Review of Corporate Governance of Statutory Authorities and Office Holders (the Uhrig Review) supported finite board terms and suggested appointments generally be limited to three years, there is no standard or prescribed term for board appointments. Board terms generally range between three and five years across government bodies, with re-appointment an option in some circumstances. It is considered that appointments of up to four years are appropriate for this Board given its size. This approach balances the benefits of Board continuity with rejuvenation, and provides a mechanism to retain high performing appointed Board members for a second term. Section 20 - Acting Board members New subsections 20(1) and 20(2) empower the Minister to appoint, by written instrument, a Board member to act as the Chair, or a person to act as a member of the Board. The circumstances where these acting appointments are permitted are:  during a vacancy in the office of Chair or appointed Board member; or  during a period when the Chair or appointed Board member is absent from duty or from Australia; or  during a period where the Chair or the appointed Board member is, for any reason, unable to perform the duties of the office. New subsection 20(3) provides that the Minister may only appoint a person to act as an appointed Board member if the Minister is satisfied that the person is qualified under new 6

subsection 18(2). This requires the Minister to maintain the skills balance while any acting arrangements are in place. These provisions have been included to assist in the continuing and effective functioning of the Board in the absence of the Chair or other Board member. An instrument of appointment as an acting appointed Board member would not be a legislative instrument, by virtue of the exception in item 8 of the table in subsection 6(1) of the Legislation (Exemptions and Other Matters) Regulation 2015. A note in new section 20 identifies that sections 33AB and 33A of the Acts Interpretation Act 1901, provides further information about acting appointments, including validity of things done during an acting appointment. Section 21 - Remuneration This new section requires appointed Board members to be paid the remuneration that is determined by the Remuneration Tribunal or, if no determination is in operation, the member is to be paid the remuneration that is prescribed by the regulations. While the Remuneration Tribunal's determination would include annual allowances, the Tribunal is not required to make additional determinations on any other allowances, such as travelling allowances. As such, this section also allows for appointed Board members to be paid the allowances that are prescribed by the regulations (which may include travelling allowances). New subsection 21(3) specifies that this section has effect subject to the Remuneration Tribunal Act 1973, which establishes the Remuneration Tribunal and sets out the rules for the making of determinations by the Tribunal. Section 22 - Paid work This new section restricts Board members from engaging in any paid work that, in the opinion of the responsible Minister, conflicts or could conflict with the proper performance of their duties. This is intended to ensure the expected duties and performance of Board members will not be impacted by any outside employment. Section 23 - Leave of absence This new section provides that the Minister may grant the Chair a leave of absence, subject to terms and conditions determined by the Minister. It also provides that the Chair may grant a leave of absence to another Board member, subject to terms and conditions determined by the Chair. Section 24 - Resignation of appointment New subsection 24(1) allows for a Board member to resign by giving the Minister a written resignation. New subsection 24(2) provides that the resignation takes effect on the day it is received by the Minister, unless another day is specified in the resignation. 7

Section 25 - Termination of appointment This new section sets out the grounds upon which the Minister may terminate the appointment of an appointed Board member:  for misbehaviour; or  if the appointed Board member is unable to perform their duties due to physical or mental incapacity; or  if the member becomes bankrupt, applies for relief from bankruptcy, compounds with their creditors, or assigns part of their remuneration for the benefit of creditors; or  if the member does not attend three consecutive meetings of the Board and is not on a leave of absence during that time; or  if the member engages in paid work that, in the opinion of the Minister, conflicts or could conflict with the proper performance of their duties (refer new section 22 of the Administration Act); or  if the Minister is satisfied that the member's performance has been unsatisfactory. The note also provides for an appointed Board member to be terminated for contravening the general duties of officials under section 30 of the Public Governance, Performance and Accountability Act 2013. These provisions are intended to ensure appointed Board members are financially responsible and are competently carrying out their duties. Section 26 - Other terms and conditions This new section allows for the Minister to determine the terms and conditions on which an appointed Board member holds office for matters not provided for in this Bill. Subdivision C--Meetings of the Board Section 27 - Convening meetings This new section requires the Board to hold meetings as necessary for the efficient performance of its functions. It allows the Chair to convene a meeting at any time. It also requires the Chair to convene at least four meetings per year and within 30 days of receiving a written request for a meeting from another Board member. These provisions have been included to support the appropriate functioning of the Board. Because of the transitional provision at item 85, the Chair is not required to convene four meetings in the calendar year of the Board's establishment. Section 33B of the Acts Interpretation Act 1901 contains provisions about participation in meetings other than in person. Under that section, the Board may permit any or all members to participate in a meeting by telephone, closed-circuit television or any other means of communication and these members are taken to be present at the meeting and to form part of any quorum for the meeting. Where permission has been granted to participate in meetings by telephone, closed-circuit television or any other means of communication, a meeting may be held at two or more places at the same time. 8

Section 27A - Presiding at meetings This new section requires the Chair to preside at all meetings they attend. In the absence of the Chair or Acting Chair, the other Board members present must appoint one of themselves to preside. There is no restriction on which Board members are eligible to preside at meetings in this instance. This provision ensures there is always a Chair presiding over a Board meeting. Section 27B - Quorum This new section provides that a quorum is constituted by a majority of Board members. It also provides that a Board member may be absent from deliberations or voting on a decision in which they have a disclosed material personal interest under section 29 of the Public Governance, Performance and Accountability Act 2013. Section 27C also provides that should a Board member not be present during the deliberations, or not take part in any decision due to the requirements of section 29 of the Public Governance, Performance and Accountability Act 2013 and a quorum is no longer present, then the remaining Board members at the meeting constitute a quorum. Section 27C - Voting at meetings This new section deals with voting at Board meetings. It specifies that questions at Board meetings are to be decided by a majority of the votes of the members present and voting. It also specifies that the person presiding at a meeting, as outlined under section 27A has a deliberative and, if votes are equal, a casting vote (i.e. an extra vote to allow a question to be decided). This provision is included to ensure the effective functioning of the Board. Section 27D - Conduct of meetings This new section gives discretion to the Board to regulate the conduct of its meetings on terms it considers appropriate. The note provides that section 33B of the Acts Interpretation Act 1901 contains further information about participation in meetings. Section 27E - Minutes This new section requires the Board to keep minutes of its meetings. Subsection 27E(2) requires the Board to provide its meeting minutes and papers to the Secretary of the Department within 20 business days of the relevant meeting. While this is not a standard provision, it is included to ensure ongoing transparent communication between the Board, the Department and the Minister. This is necessary given the Minister's overarching responsibility for agvet chemical policy, in which the APVMA plays a key role. Section 27F - Decisions without meetings This new section allows for the Board to determine that decisions can be made without a meeting and also the method by which Board members are to indicate agreement with proposed decisions. 9

Subsection 27F(1) provides that a decision is taken to have been made at a Board meeting if:  without meeting, a majority of Board members entitled to vote on the proposed decision indicate their agreement; and  that agreement is in accordance with the method determined by the Board (under subsection 27F(2)); and  all members were informed of the proposed decision, or reasonable efforts had been made to inform them of it. Subsection 27F(1) only applies if the Board has agreed it may make decisions of that kind without a meeting and has also agreed the method by which Board members can indicate agreement to a proposed decision. A Board member cannot vote on a proposed decision that they would not have been entitled to vote on if the decision was being considered at a meeting of the Board. These provisions are included to provide flexibility for the Board and are intended to assist in its effective functioning. Subsections 27F(4) and 27F(5) require the Board to keep a record of its decisions made in accordance with this section, and to provide the Secretary of the Department with details of these decisions within 20 business days. These provisions have been included to ensure ongoing transparent communication between the Board, the Department and the Minister. Subdivision D--Minister may give directions to the Board Section 27G - Minister may give directions to the Board This new section allows for the Minister to give a direction, in writing, to the Board about the performance of its functions or the exercise of its powers. The Board must comply with a direction made by the Minister, unless the direction relates to its obligations as the accountable authority under the Public Governance, Performance and Accountability Act 2013. Subsection 27G(4) requires that the Minister must not give a direction to the Board unless he or she has given written notice stating the intention to give a direction, and has given the Board an adequate opportunity to discuss the need for the proposed direction. These provisions are included to clarify and ensure the need for a direction prior to it being issued. Subsection 27G(5) provides that a direction under subsection 27G(1) is a notifiable instrument. Subsection 27G(6) provides that a direction under subsection 27G(1) is laid before each House of Parliament within 15 sitting days of giving the direction. This is consistent with directions made under paragraph 10(3)(b) of the Administration Act and provides for public scrutiny of a direction. This provision is in addition to section 10, which provides for the Minister to give written directions to the APVMA about the performance of its functions or exercise of its powers. The APVMA Annual Report must include any direction given to the Board and the APVMA by the Minister and the impact of any direction on the APVMA (see section 61). 10

Subsection E--Board to give documents to Secretary Section 27H - Board to give documents to Secretary New section 27H requires the Board to provide the Secretary of the Department with a copy of any document he or she requests relating to the APVMA's functions and performance within 20 business days of the Secretary of the Department making the request. While this is not a standard provision for governance boards, it is included to ensure ongoing transparent communication between the Board, the Department and the Minister. This is necessary given the Minister's overarching responsibility for agvet chemical policy, in which the APVMA plays a key role. Subdivision F--Board committees Section 27J - Board committees New section 27J provides that the Board may establish and abolish committees to assist it in the performance of its functions and exercise of it powers. The Board may determine the members of any committee and members may include Board members (subsection 27J(2)). The Board will also determine the terms of reference for any committee, the terms and conditions of appointment of committee members and any procedures the committee is to follow (subsection 27J(3)). The Board does not have the power to delegate any of its functions or powers. In addition, the Board may determine the procedures for these Board committees (paragraph 27J(3)(c)). As a result there is no need for these Board committee members to meet the obligations for 'officials' in Division 3 of Part 2-2 of Chapter 2 of the Public Governance, Performance and Accountability Act 2013. Subsection 27J(4) therefore specifies that people who sit on a Board committee, with the exception of Board members, are not officials for the purposes of the Public Governance, Performance and Accountability Act 2013 (subsection 27J(4)). This section is necessary as it provides an express power for the Board to establish committees. Committees may provide the Board with valuable opportunities to engage with stakeholders and seek advice, as well as access specific expertise if when required. Subdivision G--Review of the Board Section 27K - Review of the Board This new section requires the Minister to undertake a review of the functions and operations of the Board. The review is to be finalised within four years of the commencement of this section. Subsection 27J(3) also allows for the Minister to undertake subsequent reviews. A written report of any review under this section is to be provided to the Minister under new subsection 27J(4), and the Minister must table the report in each House of Parliament within 15 sitting days of receipt under new subsection 27J(5). This provision is included to enable an independent review of the operations of the Board to be undertaken to ensure it is effective and efficient. This provision is not a standard provision and is not included in the enabling legislation for other Australian Government bodies. However, it is considered necessary to ensure an independent mechanism to review the APVMA's governance arrangements. 11

Item 51 omits the existing 'Committees' heading for Division 5 of Part 3 and replaces it with 'APVMA Committees'. This amendment clarifies that sections 28, 29, 29A and 30 in Division 5 only apply to committees established by the APVMA and do not apply for committees established by the Board. Item 52 - amends subsection 32(1) of the Administration Act to clarify that the Chief Executive Officer will be responsible for the day-to-day management and decision making of the APVMA and, in doing this, may exercise any of the powers and perform any of the functions of the APVMA. The Chief Executive Officer is also to remain the APVMA's Agency Head under the Public Service Act 1999. This subsection provides that the Chief Executive Officer will continue to have responsibility for the day-to-day management and decision-making for the APVMA, which include, for example, decisions on individual product registrations, finalisation of reviews of products and/or active ingredients, and enforcement and compliance activities. As set out at item 50 above and new section 15 of the Administration Act, the Board will complement and not duplicate the duties of the Chief Executive Officer. Item 53 - amends section 32 of the Administration Act to require the Chief Executive Officer to:  act in accordance with objectives, strategies and policies determined by the Board;  comply with written directions given by the Board about the performance of his or her duties. New subsection 32(5) allows for the Board to give a direction, in writing, to the Chief Executive Officer about the performance of the Chief Executive Officer's duties. The Chief Executive Officer must comply with a direction made by the Board under new subsection 32(5), unless the direction relates to the Chief Executive Officer's obligations as the Agency Head under the Public Service Act 1999. New subsection 32(8) requires that the Board must not give a direction to the Chief Executive Officer unless they have given written notice stating the intention to give a direction, and has given the Chief Executive Officer an adequate opportunity to discuss the need for the proposed direction. These provisions are included to provide the Chief Executive Officer an opportunity to discuss the direction with the Board prior to a direction being issued. New subsection 32(9) provides that a direction under subsection 32(5) is not a legislative instrument. Item 54 - repeals section 32A of the Administration Act, which provides for how the Chief Executive Officer is to work with the APVMA Advisory Board. This provision is no longer required once the Advisory Board is abolished. It is not considered necessary to insert an equivalent provision setting out how the Chief Executive Officer is to work with the Board, as subsection 32(4) will require the Chief Executive Officer to act in accordance with the objectives, strategies and policies of the Board and subsection 32(5) will allow for the Board to direct the Chief Executive Officer in relation to their duties (refer item 53). 12

Items 55, 56 and 57 - amend section 33 of the Administration Act regarding the appointment arrangements for the Chief Executive Officer. To ensure clear accountability arrangements between the Minister, the Board and the Chief Executive Officer, future Chief Executive Officers will be appointed by the Board by written instrument, following consultation with the Minister. The Chief Executive Officer will remain a full-time position. Item 57 clarifies under subsection 33(2) that an appointed Board member is not eligible to be appointed as the Chief Executive Officer. This is to retain a separation between the Board and the Chief Executive Officer. The Chief Executive Officer will not be subject to new section 18 of the Administration Act (refer item 50 above), in that the Board may appoint any person the Board considers suitable to the role. An instrument of appointment under subsection 33(1) would not be a legislative instrument by virtue of the existing exemption under item 8 in the table at subsection 6(1) of the Legislation (Exemptions and Other Matters) Regulation 2015. This provides that an instrument of appointment is not a legislative instrument. Because of the application provision at item 86 below, these amendments only apply to subsequent Chief Executive Officer appointments to ensure these requirements do not apply retrospectively to the current Chief Executive Officer. Items 58, 59 and 60 - replace all references to the 'Minister' with the 'Board' in section 34, subsections 35(1) and 35(2) and section 37 of the Administration Act to ensure consistency with the appointment and accountability arrangements for the Chief Executive Officer under subsection 33(1) and outlined in item 55 above. Because of the application provision at item 86 below, this amendment only applies to subsequent Chief Executive Officer appointments. Items 61 and 62 - replace 'paid employment' with 'paid work' in section 38 of the Administration Act to align with the definition under section 4 as outlined in item 44 above. Items 63 and 64 - replace all references to the 'Minister' with the 'Board' in sections 38, 40 and 41 of the Administration Act to ensure consistency with the appointment and accountability arrangements for the Chief Executive Officer under subsection 33(1) and outlined in item 55 above. Because of the application provision at item 86 below, this amendment only applies to subsequent Chief Executive Officer appointments. Items 65, 66, 67, 68, 69 and 70 - amend section 41A of the Administration Act regarding the termination of appointment arrangements for the Chief Executive Officer. Items 65, 67 and 69 replace all references to the 'Minister' to the 'Board'. Item 66 is a minor technical amendment to update the reasons for terminating the Chief Executive Officer at paragraph 41A(a) of the Administration Act so that they are consistent with provisions to terminate appointed Board members as outlined in item 50 above and new section 25 of the Administration Act. Item 68 of the Bill replaces 'paid employment' with 'paid work' in paragraph 41A(d) of the Administration Act to align with the definition under section 4 of the Administration Act as outlined in item 44 above. 13

Item 70 sets out that the Board, under new subsection 41A(2), may only terminate the Chief Executive Officer following consultation with the Minister. These amendments are included to ensure consistency with the appointment and accountability arrangements for the Chief Executive Officer under section 33(1) and outlined in item 55 above. Because of the application provision at item 86 below, this amendment only applies to subsequent Chief Executive Officer appointments. Item 71 - replaces reference to the 'Minister' with the 'Board' in subsection 42(1) of the Administration Act to ensure consistency with the appointment and accountability arrangements for the Chief Executive Officer under subsection 33(1) and outlined in item 55 above. Because of the application provision at item 86, this amendment only applies to subsequent Chief Executive Officer appointments. Items 72 and 73 - amend section 43 of the Administration Act regarding the appointment of an Acting Chief Executive Officer. Item 72 replaces reference to the 'Minister' to the 'Board'. Item 73 sets out that the Board, under new subsection 43(2), may only appoint an acting Chief Executive Officer following consultation with the Minister. These amendments are included to ensure consistency with the appointment and accountability arrangements for the Chief Executive Officer under subsection 33(1) and outlined in item 55 above. Because of the application provision at item 86 below, this amendment only applies to subsequent Chief Executive Officer appointments. Items 74, 75, 76, 77 and 78 - replace reference to the 'Chief Executive Officer' with 'Board' in subsections 51(1), 51(3), 52(1), 52(2), 52(3), 55(1), 56(1) and 56(3) and paragraph 55(2)(b) of the Administration Act. These amendments are included to ensure consistency with the functions of the Board outlined in item 50 above and new section 15 of the Administration Act, and the role of the Board as the accountable authority under the Public Governance, Performance and Accountability Act 2013. Item 79 - replaces 'he or she' with 'the Board' in subsection 56(3) of the Administration Act to ensure consistency with the functions of the Board outlined in item 50 above and new section 15 of the Administration Act, and the role of the Board as the accountable authority under the Public Governance, Performance and Accountability Act 2013. Items 80, 81 and 82 - replace reference to the 'Chief Executive Officer' with 'Board' in paragraph 54(4)(b), subsection 57(2) and section 61 of the Administration Act to ensure consistency with the functions of the Board outlined in item 50 above and new section 15 of the Administration Act, and the role of the Board as the accountable authority under the Public Governance, Performance and Accountability Act 2013. Item 83 - this item amends section 61 to include reference to any written directions given to the Board of the APVMA by the Minister (new subsection 61(g)). This will mean that the APVMA Annual Report must include any written direction given to the Board by the Minister and the impact of those written directions on the APVMA. This is the same approach that currently applies for any direction given to the APVMA by the Minister (current subsection 61(f)). The amendment provides necessary transparency regarding the performance of the Board. 14

Item 84 - omits reference to the Chief Executive Officer in paragraph 69EP(7)(a) of the Administration Act, which sets out that Board members may attend a private hearing. This reference is no longer necessary, as the Chief Executive Officer is encompassed by the new definition of 'board member', set out at item 42 above. Item 85 - this item is a transitional provision that provides that paragraph 27(2)(b) of the Administration Act does not apply in relation to the calendar year in which this item commences. This means that the Board will not be required to hold four meetings in the calendar year it is established. Item 86 - this item is an application provision that provides the amendments to sections 33 to 43 of the Administration Act (as set out in items 55-73 above) apply to Chief Executive Officers appointed after the commencement of this item. This application provision means many (but not all) of the provisions relating to the current appointed Chief Executive Officer will remain unchanged until the end of his current appointment term, including:  the Chief Executive Officer will hold office as agreed in writing between the Minister and the Chief Executive Officer, on such terms and conditions are agreed with the Minister (sections 34 and 37);  the Chief Executive Officer is to be paid the remuneration (if there is no Remuneration Tribunal determination operational) and allowances determined by the Minister in writing (section 35);  the Chief Executive Officer must not engage in paid work, except with the approval of the Minister (section 38);  the Minister may grant the Chief Executive Officer leave of absence, other than recreation leave, on terms and conditions determined by the Minister (section 40);  the Chief Executive Officer may resign in writing to the Minister (section 41);  the Minister may terminate the Chief Executive Officer (section 41A); and  the Chief Executive Officer must disclose all indirect and financial interests to the Minister (section 42). The Minister will also remain responsible for acting Chief Executive Officer appointments during this period, as set out in section 43. The current Chief Executive Officer may be reappointed by the Board, following consultation with the Minister, at the end of his current term (refer items 55-57 above). As set out in items 52 and 53 above, the duties of the current Chief Executive Officer will be amended once the Board is established. Item 87 - this is an application and saving provision that provides that subsection 51(1) and subsection 55(1) of the Administration Act in relation to approval of a corporate plan and operational plan apply to the calendar year beginning on 1 January 2020 and each later year; and that amendments made to Part 6 of the Administration Act (items 74-82 above) do not affect the validity of the corporate plan, a variation of a corporate plan or an annual operational plan approved by the Minister before the commencement of this item. 15

New sub item 87(3) is an application provision that provides that section 61 (as amended) of the Administration Act in relation to the reporting periods for annual reports is applicable from 1 July 2019 and for each later reporting period. Item 88 - is a transitional provision that provides for any records or documents that are held by the Advisory Board immediately before the commencement of this amendment to be transferred to and retained by the APVMA. 16

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 Amendments to the Agricultural and Veterinary Chemicals Legislation Amendment (Operational Efficiency) Bill 2017 The proposed government amendments to the Bill are 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 amendments The Agricultural and Veterinary Chemicals Legislation Amendment (Operational Efficiency) Bill 2017 (the Bill) will make minor and technical amendments to the Agricultural and Veterinary Chemicals (Administration) Act 1992 (the Administration Act), the Agricultural and Veterinary Chemicals Code Act 1994 (the Code Act) and the Agricultural and Veterinary Chemical Products (Collection of Levy) Act 1994 (the Levy Act), to realise operational efficiencies, reduce unnecessary regulation, clarify ambiguities and remove redundant provisions. The proposed government amendments to the Bill will amend the Administration Act and the Levy Act to establish a governance board for the Australian Pesticides and Veterinary Medicines Authority (APVMA), cease the existing APVMA Advisory Board and amend the application provisions for industry annual reporting requirements. Human rights implications The proposed amendments to the Bill do not engage any of the applicable rights or freedoms outlined in the Human Rights (Parliamentary Scrutiny) Act 2011. Conclusion The proposed amendments are compatible with human rights as they do not raise any human rights issues. The Hon. David Littleproud MP, Minister for Agriculture and Water Resources 17

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