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Summary of Submissions from Discussion Papers 5 to 6 Measurement Law Review2020

SUMMARY PAPER:

MEASUREMENT ASSURANCE

Contents1. Background 2

2. Paper 5 – Third Party Arrangements 32.1 Third Parties in Australia’s Measurement Framework 32.2 Common Issues 32.3 Servicing Licensees and Verifiers 42.4 Utility Meter Verifiers 52.5 Public Weighbridge Licensees and Weighbridge Operators 52.6 Legal Metrology Authorities 6

3. Paper 6 – Compliance Arrangements 73.1 Current Compliance Arrangements 73.2 Risk Management 83.3 Compliance Monitoring 83.4 Compliance Options 9

SUMMARY PAPER:

MEASUREMENT ASSURANCE

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1. BackgroundThe Measurement Law Review (Review) is identifying aspects of Australia’s measurement framework that can be modernised, streamlined or simplified. The Review includes public consultation on six discussion papers to gather input and provide industry and key stakeholders with the opportunity to inform the Review.This document provides a summary of the various submissions received during the public consultation Measurement Assurance open from 29 October to 23 December 2019. The summary covers both confidential and non-confidential submissions from two discussion papers:

• Third Party Arrangements: Discusses the current legal framework for authorised third parties to contribute to the regulation of measurement activities in Australia.

• Compliance Arrangements: Discusses the current legal framework that supports the compliance and enforcement arrangements for the regulation of measurement and measuring instruments used for trade.

The submissions summarised in this document provide a range of different views, some of which involve competing positions. The Review will consider the different perspectives provided during consultations when developing options for reform. Further consultation will be undertaken on these options once developed.

Scope of

Australia’s Measurement

Laws

Traceable

Measurement

Measuring

Instruments

Measurement-based

Transactions

Third Party

Arrangements

Compliance

Arrangements

1 2 3 4 5 6

MEASUREMENT LAW REVIEW – DISCUSSION PAPERS

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2. Paper 5 – Third Party ArrangementsSummary of respondents:

Stakeholder type Business Industry association

Consumer association

Government Individual Total

Number of submissions

8 1 0 1 2 12

Please also note that a series of third party forums were held across Australia in November and December 2019. The feedback from these forums is separately captured and available on the Measurement Law Review webpage.

Comments received on the Third Party Arrangements discussion paper indicated:

2.1 Third Parties in Australia’s Measurement Framework 2.1.1 The majority of respondents agreed the existing third party arrangements deliver a net benefit to the Australian

economy as they:

• Reduce costs to business by supporting competitive pricing for measurement services and provide an equal playing field.

• Reduce waiting periods for measurement services by enabling private sector investment and competitive market-based measurement services.

• Support consistency across all providers and efficient business practices.

• Help maintain confidence in the accuracy of measurement.

2.1.2 Many respondents commented that the current third party arrangements are not burdensome and any softening of regulatory requirements may result in reduced marketplace compliance. There were some reservations about the over-prescriptiveness of some regulatory requirements leading to inefficiencies.

2.1.3 Respondents expressed the current measurement functions performed by third parties should remain. There was concern it would not be reasonable to move the current third party measurement functions back to the National Measurement Institute (NMI) citing a perceived lack of government resourcing.

2.1.4 The majority of respondents did not think there were additional functions that could be managed by third parties, however performing trade measurement inspections and assisting third parties in taking up Pattern Approvals were suggested.

2.2 Common Issues

Competency

2.2.1 Respondents’ views on the need for overall competency were supported with two key themes emerging:

• The individual conducting the third party activity should demonstrate (as is currently the case) that they are competent in performing the third party activity.

• This competency should be either demonstrated through a history of suitable training or NMI competency testing.

2.2.2 Some respondents also suggested that the licence holder and the individual conducting the activity should not be one and the same.

Prescriptiveness of Legislation

2.2.3 A number of respondents emphasised the technical nature of measurement to be more compatible with prescriptive based regulation that provides clear direction to users. Respondents commented that a prescribed approach is necessary to ensure confidence in testing and that managing / addressing compliance is more achievable.

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2.2.4 Respondents are in favour for the prescribed National Instrument Test Procedures1 (NITPs) to remain for reasons of certainty. NITPs provide clarity to verifiers on what they need to do to perform testing. One respondent was open to exploring potential alternatives to prescriptive legislation taking the form of more broad-based regulatory statements noting the large amount of legislative documentation devoted to public weighbridges.

Compliance and Enforcement

2.2.5 A number of respondents agreed the current arrangements were effective but could use administrative improvements to enhance their robustness e.g. a web app to flag non-compliance instances from submitted measurement data instead of the current time consuming method of manual submission. There were also calls to strengthen enforcement and ensure government interventions are actioned through licence suspension of rogue operators and more inspector visibility, including in industry areas which are harder to test.

Applying a Principles-based Approach

2.2.6 Respondents affirmed their preference for keeping a prescriptive approach rather than adopting a principles-based approach. They expressed concern that removing the detail in legislation would dilute industry standards, reduce confidence, and present a risk and burden to the sector.

2.2.7 It was observed by some respondents that the National Instrument Test Procedure (NITP) documents make it clear to those individuals verifying measuring instruments what is required to perform testing. Concern was expressed that if the detail was removed from NITPs, or if NITPs were discontinued, verifiers would not have a clear direction to follow and this could result in incorrectly verified and / or inaccurate measuring instruments being used for trade.

2.2.8 A prescriptive approach was considered best in technical fields to ensure everyone is performing the same tests and to the same baseline standards to help ensure compliance is achieved.

2.2.9 Some respondents acknowledged flexibility could be explored within the process of approving the pattern of a measuring instrument as the current prescribed approach is not up to date with technological advancement.

2.3 Servicing Licensees and Verifiers2.3.1 Respondents endorsed the current servicing licensee system on the basis that it:

• helps ensure measurement-based transactions in business and to the public are true and accurate

• enhances competition

• provides confidence in all aspects of the trading arena.

2.3.2 Respondents were supportive of continuing the servicing licensee system. The following improvements were suggested:

• Trade measurement inspectors to witness (as assessors) the verifications performed by applicants for servicing licences prior to granting them.

• The company, not individual employees as verifiers should hold the licence – namely to mitigate burden should the licensed employee leave.

• NMI should do more audits of servicing licensees at the company / business level and of their quality management systems so that companies can independently train their own staff as competent verifiers.

• Future licence requirements should be modelled on any deficiencies in the current system identified by periodic audits.

2.3.3 Mixed opinions were received regarding how the ongoing competency of verifiers can be ensured. Many respondents thought the current level was appropriate and there should be no major changes to the process. However, one respondent suggested a more proactive approach from NMI / RTO (registered training organisation) where the competency of verifiers should be ensured through monitoring and process audits in the field. It was also suggested by some that an ongoing competency assessment of verifiers may not be necessary if prescribed NITPs remain and clearly outline what is required.

2.3.4 Comments regarding competency assessments discussed the frequency of testing, with some variation of what was optimum (6 months to 5 years) on an industry dependent basis.

1 https://www.industry.gov.au/data-and-publications/test-procedures

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2.3.5 Respondents who were servicing licensees noted the importance of a servicing licence to their business for the following reasons:

• Demonstrating their organisations technical expertise to their clients.

• Increased ability to maintain standards within their company.

• Keeping high-quality skilled competitors in the market.

A number of respondents identified that a significant percentage of their business activity is generated from holding a servicing licence.

2.3.6 There was near consensus that the current reporting requirements are appropriate, however, there were concerns regarding efficiency and the need to update and streamline processes e.g. the submission of verification information through the current “Form 6”.

2.3.7 Some respondents stated that the ongoing monitoring of verifiers and auditing of licensees was sufficient. Others thought a higher level of auditing was warranted, including a greater level of field based auditing. There was a suggestion to conduct field based audits of verifiers and licensees after the initial submission of a recognition kit for competency assessment.

2.4 Utility Meter Verifiers2.4.1 Respondents were in agreement regarding the important role that Utility Meter Verifiers (UMVs) play in the

current measurement system. They supported the general effectiveness of the current system as it defines requirements to ensure a consistent approach to the verification of utility meters.

2.4.2 One respondent noted there was no need for the verification of utility meters to be distinguished from other trade instruments. However, conflict of interest concerns were raised for manufacturers of utility meters exclusively verifying their own products. Provisions for mitigating potential conflicts of interest exist within ISO / IEC 17025.2

2.4.3 There was a low response rate regarding the appropriate level of competency that should be required for a UMV. One respondent suggested that there is a need for thorough competency assessment as part of NATA (National Association of Testing Authorities) accreditation in alignment with ISO / IEC 17025. Another respondent indicated that while ISO / IEC 17025 is a general measure of competency, this is insufficient to ensure the competency of a UMV to implement legal metrology requirements.

2.4.4 Suggestions to improve compliance include increased targeted professional development (e.g. workshops / forums), informal site visits to identify non-compliant activities and pre-emptively investigating before a breach.

2.4.5 Respondents were aligned on the need for increased monitoring. One respondent was in favour of a more robust external intervention process relying on NMI for independent testing. Another respondent was more orientated towards adopting a self-regulatory model consisting of verification documentation, company procedure quality assurance systems for conducting verification activities and annual submissions declaring the quantities of meters verified.

2.5 Public Weighbridge Licensees and Weighbridge Operators2.5.1 There was consensus among respondents that public weighbridges need to be subject to continued licensing

with strong and transparent obligations to provide confidence in the system. In supporting this position, some respondents noted the role that public weighbridges play in relation to road safety, and the waste and recycling trade.

2.5.2 There were mixed opinions regarding the requirements for public and trade weighbridges. Some respondents were of the opinion that the same treatments should be required for all weighbridges used in measurement transactions for trade. Others acknowledged that they provide a different service and should be treated differently.

2 Specifies the general requirements for the competence, impartiality and consistent operation of laboratories.

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2.5.3 There was clear support for the current requirement for public weighbridges to be re-verified (despite suggested verification periods not always being outlined in submissions) with the exception of one respondent. Respondents held the view that re-verification was to relieve operator costs and to protect the public, consumers, and businesses. Most agreed that any less than one year to re-verify a measuring instrument would be burdensome. Many respondents suggested periodic verification should apply to all trade approved weighing instruments.

2.5.4 Respondents were in favour of training / assessment and the ongoing monitoring of public weighbridge operators. The use of online materials was suggested to facilitate remote assessment of competency and patterns of non-compliant instruments should trigger an audit.

2.6 Legal Metrology Authorities2.6.1 Respondents were in agreement that Legal Metrology Authorities (LMAs) should continue to be appointed by

the Chief Metrologist. In supporting this position, some respondents noted that LMAs help reduce unnecessary litigation, and provide greater access to and competition in services leading to increased market choice.

2.6.2 The majority of respondents were of the view that the current appointment and competency requirements for LMAs should be maintained. One respondent with expertise in the field was supportive of certifying authorities for reference materials to hold accreditation of ISO / IEC 170343 instead of ISO / IEC 170254 depending on the required activities.

2.6.3 Respondents were not adverse to additional NMI reporting requirements and noted reporting should be based on the existing ISO standards (International Organisation for Standardisation). There was consensus that NMI and NATA play a role in the monitoring / audit process.

2.6.4 Those respondents appointed as an LMA indicated that this appointment was significant for their business and provided confidence to their customers and industry that a high level of rigour is applied to their activities.

3 Specifies general requirements for the competence and consistent operation of reference material producers.4 Specifies the general requirements for the competence, impartiality and consistent operation of laboratories.

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3. Paper 6 – Compliance ArrangementsSummary of respondents:

Stakeholder type Business Industry association

Consumer association

Government Individual Total

Number of submissions 6 2 1 2 1 12

Comments received on the Compliance Arrangements discussion paper indicated:

3.1 Current Compliance Arrangements3.1.1 Various concerns were raised regarding the current focus of NMI’s compliance arrangements:

• Several respondents perceived that the NMI had current resource limitations and insufficient education and assistance campaigns. They noted that this was contributing to an overall lack of measurement awareness in the community. Suggestions came predominantly from the weighing industry and included:

– Increasing the current level of market surveillance and conducting additional periodic audits.

– Undertaking more consultation and providing further education to stakeholders and consumers.

– Modelling a campaign on Canada’s “Spot the Sticker” initiative.

• The weighing industry raised concerns that the current focus of compliance arrangements was restricted to certain areas of measurement and suggested that there was an opportunity to expand the scope of the measurement legislation to include other high-risk non-trade areas. A separate submission noted a need to consider the growth of digital and online trade, as well as changes in consumer behaviour, as these will present future challenges for regulators.

• The weighing industry called for mandatory re-verification intervals, with one member suggesting that instrument owners could be granted audit leniency if they demonstrated regular maintenance programs in partnership with servicing licensees. No statistical, economic, or other evidence was provided to demonstrate the costs or benefits. However, some of the reasons for re-verification put forward included that it would:

– Prompt instrument owners to get instruments checked.

– Increase confidence in the measurement system.

– Result in fair trade.

• An alternative suggestion (external to the weighing industry) was to incentivise compliance using a compliance mark certifying the business has met specified minimum standards.

3.1.2 A number of respondents did not support using legislation outside of the current measurement framework for remedies and compliance (e.g. relying on the Australian Consumer Law, or other overlapping legislation, for compliance and enforcement of some aspects of the measurement framework). Justification for this included the specialisation and complexity of measurement and a potential shortfall in resource allocation.

3.1.3 Both the weighing industry and respondents from other industries reported positive individual experiences with NMI’s compliance options and compliance monitoring with the following observations:

• Some respondents indicated support for the current escalating approach to compliance.

• There were suggestions that there should be a greater use of infringement notices, civil penalties and other types of enforcement and penalty options for serious or repeated non-compliance, and that the NMI should act more swiftly in these circumstances.

• There were concerns that traders are currently willing to risk enforcement action and to push the compliance boundaries rather than proactively complying with requirements, although no specific examples or other evidence was provided to support these claims.

• There was agreement among some respondents that compliance monitoring upheld consumer confidence, performance standards, increased the regulator’s visibility and provided opportunity for external review.

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• Submissions bundled compliance monitoring costs with other cost burdens like NATA (National Association of Testing Authorities) and LMA (legal metrology authority) fees, as well as staff resourcing requirements. Cost burdens from staff resourcing requirements were explained as the costs incurred by business to train and mobilise verifiers for instruments requiring periodic re-verification, particularly where the instrument owner could demonstrate through documentation that the instrument was still accurate.

• Some respondents suggested monitoring powers should be more consistent throughout all Australian regulatory agencies and across industry sectors, with one respondent proposing adoption of the Regulatory Powers (Standard Provisions) Act 2014.

3.2 Risk Management3.2.1 Most respondents were supportive of a risk-based approach to compliance arrangements but opinions differed

in terms of how this should apply. Common feedback identified the need to:

• Have a well-defined and clear assessment matrix: Respondents suggested that this matrix would need to involve an assessment of instrument accuracy, application, and the consequences of incorrect measure in order to minimise variability based on the assessor’s perspective.

• Consider impact and material detriment (risk and harm) of incorrect measure.

3.2.2 In relation to how the legislation should deal with risk, suggestions from respondents included fast-track pathways in the legislation based on risk categorisation for accepting reputable overseas approvals for new / innovative technology, and where the risk is deemed low. One respondent suggested looking at the approaches contained within the Regulator Performance Framework.

3.3 Compliance Monitoring3.3.1 Several administrative compliance options were suggested as alternatives to the current framework, including:

• Issuing public warning notices.

• Implementing recall provisions.

• Putting Industry Codes of Conduct to greater use.

• Creating a register of paid infringement notices:

– Respondents suggested this would help increase accountability for traders.

– One respondent suggested this register should be for high level, repeat offenders and that register entries should expire after a set timeframe.

• Increased use of notices to remedy.

• One respondent suggested the legislation could enable leniency where a trader is trialling a sustainability measure (e.g. customers using their own containers or bags when purchasing produce or deli items) and inadvertently breaches the legislation. In these circumstances a notice to remedy could be issued rather than a breach notice.

3.3.2 There was a marked split in opinions regarding a move to a more principles-based approach and increased flexibility within the measurement system.

• Consumer associations and the weighing industry were not supportive of a principles-based system, preferring to maintain or increase the prescriptive nature of the legislation. They raised concerns regarding the impact of a principles-based approach on the integrity of the measurement system and on consumer confidence, noting the potential for a drop in quality assurance standards and conflicting test procedures between inspectors and verifiers. Conversely a separate respondent felt a more modern approach would provide more assurance to the public on the fairness of measurement and improve national consistency. No data was provided to support any claims for or against.

• Other respondents, including industry bodies, were supportive of a principles-based system. They suggested prescriptive elements be placed in supporting regulations and ministerial rules. These respondents claimed that this would introduce the flexibility needed to adapt to changing technology and the evolving digital economy, while allowing for more appropriate and workable guidelines. One respondent also recognised that the current prescriptive rules were deeply entrenched and noted that this may present a challenge moving forward.

• Government agencies who responded raised concerns about the impact of less prescriptive rules on successful prosecutions, through the introduction of ambiguity in interpretation associated with a principles-based approach and the challenges this may create in court.

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3.3.3 Opinions were divided regarding whether the Minister should be given the power to exempt certain classes of instruments from parts of the measurement framework. Some respondents supported the idea with the proviso that any decision made by the Minister was justified by a risk assessment and clearly communicated with stakeholders. Other respondents were concerned by the perceived possibility of collusion or favouritism and subsequent weakening of the measurement framework. However, there was support expressed among some members of the weighing industry and respondents from other industries for a form of interim / temporary approval, or revised pattern approval for new measurement technology. Suggested changes included:

• Conducting a risk assessment on new technology.

• Accepting overseas approval (mutual recognition).

• Allowing industry to submit an application addressing specified risks for consideration.

• Documenting special conditions in any form of interim / temporary approval.

• Allowing field trials of new technology.

3.4 Compliance Options3.4.1 Among most respondents there was a consensus that a blanket five penalty units was inappropriate for

infringement notices for all offences. A majority of responses suggested that penalties be apportioned using a risk-based assessment that takes into account the severity of the offence and whether or not there was financial detriment.

3.4.2 There was support from a number of respondents for the legislation to include both civil and criminal penalties as it would provide flexibility, round-out compliance options, and still provide sufficient deterrence for more malicious offender(s).

3.4.3 There were reservations voiced regarding the introduction of statutory defences / exemptions. One respondent expressed concerns that statutory defences would introduce uncertainty and may have unintended or unanticipated consequences.

3.4.4 A range of stakeholders suggested implementing a new automated reporting system and / or online portal. Various formats were suggested however the general theme was for a portal to deliver the following:

• Reporting capabilities

• Information on compliance activities

• Quality assurance information

• General record keeping

• Regulation updates / consultations

• Verification reminders

• Training information

• General communication.

3.4.5 A consumer group voiced the opinion that any modification to current regulatory compliance and enforcement approaches should result in high levels of consumer protection and should contain provision for a review, which should be conducted within five years of introduction.

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