To Using Standards And Risk Assessments
Department of Industry,Innovation and ScienceBest Practice Guide toUsing standards and risk assessmentsin policy and regulationJuly 2016INDUSTRY.GOV.AU
ContentsIntroduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2What are standards?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2What are risk assessments? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Government policy for using standards and risk assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2What is the assessment process?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Section 1: Regulatory Impact Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Assistance for Regulatory Impact Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Section 2: Policy settings for standards and risk assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Use of standards and risk assessments in performance-based settings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Section 3: Standard or risk assessment selection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Identification of standards and risk assessments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Applicability to the Australian context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Assistance in selecting standards and risk assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Section 4: Assessing performance and outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Gathering information and evidence on performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Regulatory burden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Cost benefit analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Section 5: Adoption of standards and risk assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Assistance from standards and conformance infrastructure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Choosing policy or regulatory framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Referencing of standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Assessing compliance with a standard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Guidance materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Annex A - Australia’s standards and conformance infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Annex B - Types of standards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Annex C - Sources of standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Annex D - Cost considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Annex E - Benefit considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Annex F - Referencing of standards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Annex G - Information contacts and resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
IntroductionThe purpose of this guide is to assist policy officers inassessing the suitability of standards or risk assessmentsfor use in support of policy and programs. The use ofstandards or risk assessments should be considered asone of many policy options available. When consideringpolicy options, policy officers are required to conducta broad analysis of all suitable options with a view tominimising the regulatory burden.Government policy for usingstandards and risk assessmentsWhat are standards?The principle has been acknowledged in the RegulatoryReform Agenda and the National Innovation and ScienceAgenda. The principle is also consistent with Australia’sobligations under the World Trade Organisation’sTechnical Barriers to Trade Agreement. To abide bythis principle, policy officers who use standards or riskassessments in support of policies or programs shouldselect an appropriate international version where possible.Standards are documents approved by a recognised bodythat provides for common and repeated use. They arerules, guidelines or characteristics for products, processes,services and product methods, used to demonstrate aspecific function and quality. They can be used in all typesof policy settings and their compliance can be voluntary,compulsory or performance-based. The appropriate useof standards can facilitate trade, improve competitiveness,promote innovation and be an effective tool for reform.What are risk assessments?Risk assessments are a tool that policy makers may useto assess whether regulatory action is required or as thebasis for accepting a technology or product for where nosuitable standard or conformance framework exists. Theyinvolve a systematic process of analysis to determinethe extent and likelihood of occurrence of undesirableevents or situations as compared against benchmarksor standards. Risk assessments are well established inthe areas of public health and safety, pharmacology,toxicology, environmental regulation, defence, regulatorymanagement and novel technologies.The Australian Government has adopted the principlethat ‘if a system, service or product has been approvedunder a trusted International Standard or risk assessment,Australian regulators should not impose any additionalrequirements unless it can be demonstrated that there is agood reason to do so.’What is the assessment process?To consider the use of standards and risk assessments insupport of policies and programs, policy officers shoulduse the process chart listed in Figure 1.The process chart allows policy officers to consider thefollowing points: To consider whether a there is a need to complete aRegulatory Impact Statement (RIS) to support the useof standards and risk assessments The suitability of standards and/or risk assessments forachieving the policy objective The selection of the most appropriate standard or riskassessment to support policy or program objectives Evidence that specification of a standard or conductof a risk assessment will support the achievement ofpolicy or program objectives. The process of adopting the standard and/or riskassessment into the appropriate policy or programframework.Each section of this document relates to a stage of theprocess chart and provides specific guidance for use bypolicy officers to assist in decision making.2
Figure 1 - Process chart for using standards and risk assessments at the Department of Industry, Innovation and Science1. Regulatory Impact StatementDo you need to complete a RIS?Have you sought support from the Regulation Reform team?2. Policy settings for standards and risk assessmentsHave you considered your policy setting?Can standards or risk assessments be used in your policy setting?3. Standard or risk assessment selectionHave you identified a standard or risk assessment?Is the standard or risk assessment applicable in the Australian context?4. Assessing performance and outcomesDo you have evidence to support the use of a standard or risk assessment to achieve thedesired outcome?Have you assessed the regulatory burden of using the chosen standard or risk assessment?Have you calculated the net benefit of using the chosen standard or risk assessment?5. Adoption of standards and risk assessmentsHave you sought support from Australia’s standards and conformance infrastructure?What policy framework is standard or risk assessment being incorporated into?Is the standard or risk assessment clearly identified in supporting reference materials?Does the standard or risk assessment require a conformity assessment?Are any additional guidance materials required?3
Section 1: Regulatory ImpactStatementAssistance for Regulatory ImpactStatementsAll policy officers need to considerwhether their policy developmentrequires the completion of a RISThe first step in any policy development process is forpolicy officers to consider whether they need to completea Regulatory Impact Statement (RIS). A RIS allowspolicy officers to assess all viable policy options availableincluding non-regulatory alternatives, in a transparent andaccountable way. The RIS considers the impact a changein current practice will have upon Australian businesses,individuals and community groups.The use of standards and risk assessments to supportpolicy or programs is one option that should beconsidered amongst many in a RIS. As part of theirconsideration, policy officers should ensure thatnon-regulatory approaches are considered and thatregulation is not the default option. As policy officerswork their way through the RIS process, it should becomeclear which option has the least impact upon the broadercommunity and achieves the policy objective required.Not all policy circumstances and situations will requirethe completion of a RIS. To determine whether you needto complete a RIS, you must complete a preliminaryassessment and submit this assessment to the Office ofBest Practice Regulation (OBPR).4The department’s Regulation Reform team can providepolicy officers with assistance in completing bothpreliminary assessments and RISs and ensuring that theycomply with all government requirements. Policy officersshould make contact with the Regulation Reform teamat the beginning of any policy development process byemailing deregulationpolicy@industry.gov.au. Policyofficers can also refer to the Industry Officer’s Guideto Regulation Reform for further information.A link to this guide can be found in Annex G.If OBPR requires officers to complete a RIS, many of theevaluations, processes and tools described in this guide,are compatible with RIS processes, and will assist officersin considering whether the use of standards and/or riskassessments are an appropriate policy option.
Section 2: Policy settings forstandards and risk assessmentsStandards and risk assessments can be used in differentpolicy settings. This section will explore the three mainpolicy settings that occur within the department and howstandards and risk assessments have been used in each.Policy officers should consider whethertheir policy setting is suitable for usingstandards and risk assessments toachieve policy or program objectivesUse of standards and riskassessments in performance-basedsettingsIn a performance-based setting, policy officers specifyperformance goals and stakeholders can nominate astandard or risk assessment to demonstrate they canmeet performance requirements. Policy officers thendetermine whether the standard or risk assessment statedis adequate. This option provides a flexible complianceframework that eliminates the requirement for a tailoredresponse in the Australian market. Policy officers shouldgive preference to performance based standards wherefeasible and appropriate.STANDARDS IN ACTIONPerformance-based settingsNOPSEMAA prominent example of standards being used ina performance-based setting is the regulation ofenvironment and safety in Australia by the NationalOffshore Petroleum Safety and EnvironmentalManagement Authority (NOPSEMA). Principally theregime for the regulation of safety, well integrityand environmental management for the offshorepetroleum industry is ‘performance-based’. Theoffshore duty holder is required to specify, as partof their submissions any Australian or InternationalStandards applied in relation to the design of afacility, selection of a plant and equipment, or theconduct of an activity.In this regard, the regulatory regime administeredby NOPSEMA enables duty holders to utiliseany Australian and/or International Standard,international industry practices (such as thosedeveloped by the International Organisation ofOil and Gas producers, the American PetroleumInstitute) or company specific standards that areappropriate to the particular circumstance.5
Use of standards and riskassessments in prescriptivebased settingsIn a prescriptive-based setting, standards and riskassessments can be used as a definitive means forstakeholders to meet an outcome. Policy officers specifywhich standard or risk assessment is to be used tomeet a desired policy or regulatory objective. In suchcircumstances, the requirements are expressed in preciseterms through referencing the standard in legislation and/or regulation. The benefit of such is that stakeholderscan adhere to a policy or regulation with a resource thatis publicly available and is updated regularly to reflectcurrent best practice.STANDARDS IN ACTIONPrescriptive-based settingsAustralian Wiring RulesAS/NZS 3000:2007 Electrical installations(Australian/New Zealand Wiring Rules) is thejoint Australian/New Zealand standard that setsout the requirements for the design, constructionand installation of electrical equipment to protectpeople, property and assets from the hazardsthat may occur from an electrical installation.The standard is used in legislation and regulationsthroughout Australia. The standard providesuniform essential elements that constituteminimum safe requirements for a safe electricalinstallation as well as the provision of installationpractices that achieve certainty of compliancewith essential safety requirements.6Use of standards andrisk assessments in bothperformance-based andprescriptive-based settingsThere are circumstances in which policy officers willdetermine that it is appropriate to provide flexibilityand choice to stakeholders in their means to achieve ordemonstrate compliance. Such settings will compriseelements of both performance and prescriptivebased settings. In such settings, policy officers canprovide a choice to stakeholders by offering either a‘deemed to satisfy’ solution or an alternative method ofdemonstrating compliance of the stakeholders choosing.This approach has the benefit of providing a solution forthe stakeholder to use, but also allows alternative optionswhere suitable.STANDARDS IN ACTIONPerformance and prescriptive basedsettingsThe National Construction CodeThe National Construction Code (NCC) provides theminimum necessary requirements for safety, health,amenity and sustainability throughout Australia. TheNCC is a performance-based code that provides userswith a variety of methods to demonstrate compliance.A ‘Deemed to Satisfy’ provision is provided that is abenchmark to users on how to be compliant. Usersalso have the option of putting forward a PerformanceSolution (i.e. a new assessment method) to have thepractice properly evaluated against the performancerequirements. This encourages innovation amongstusers and provides flexibility in regulating how userscomply with the Code.
Section 3: Standard or riskassessment selectionThis section provides a simple assessment process thatcan be used to identify an appropriate standard or riskassessment to support policy and programs objectives.Policy officers should familiarisethemselves with the different types ofstandards and risk assessmentsavailable and their respective sources.A list of the types of standards and risk assessments thatcan be used is provided at Annex B. Different sources ofstandards and risk assessments are provided in furtherdetail at Annex C.Policy officers should work through each considerationin consultation with their stakeholders. As policy officerscomplete these processes, any analysis undertakenshould be documented. Further information on assessingthe performance and outcomes of standards and riskassessments is detailed in Section 4.Identification of standards andrisk assessmentsThe first step is to identify an applicable standardor risk assessment that already exists to achieve thedesired policy or program outcome. There are manydifferent sources of standards in use throughout theworld. Standards may be developed by internationalorganisations, regional groupings, nation statesand industry. It is Australian Government policy to accepttrusted International Standards where appropriate.Officers should commence their search for an applicableInternational Standard or risk assessment in consultationwith stakeholders. If an applicable International Standardor risk assessment cannot be found, then a regional,national, industry or other standard can be used.When searching for standards, policy officers shouldconsider the current status of the standard. Policyofficers should always search for and use the latest(or amended) version of the standard or risk assessment.If policy officers have not been able to identify a standardor risk assessment for the desired outcome, they havethe option of initiating a new standard through astandard development process. The Trade Facilitationteam can provide assistance to policy officers identifyingthe applicable standard or risk assessment and can becontacted at TradeFacilitation@industry.gov.au.Applicability to the AustraliancontextOnce policy officers have identified a standard or riskassessment they need to determine if it can be applied oradopted to an Australian setting. When considering whichstandard to use, officers should preference those that arealready in wide circulation and use. The list at Annex Chighlights the general hierarchal order in which preferenceshould be given for use in Australian policy settings.There are five criteria that should be used to make thisassessment. If it is determined that the standard or riskassessment cannot be used in an Australian context, itis recommended that policy officers seek an alternativepolicy response.Figure 2 on the next page describes the criteria thatshould be used by policy officers to make an assessment.Assistance in selecting standardsand risk assessmentsThe department’s Trade Facilitation team managesthe Australian Government’s relationships with thestandards and conformance bodies and can assist ifyou have questions regarding the selection of standardsand risk assessments to be used in support of policy andprograms. The Trade Facilitation team can be contactedat TradeFacilitation@industry.gov.au.7
Figure 2 - Criteria to assess applicability of standards and risk assessments to the Australian contextFeasibility & appropriatenessCan the standard or risk assessment be used by stakeholders?Policy officers should ask stakeholders whether the standard or risk assessment is easy to access and whether therequirements can be performed without significant organisational change or investment.Accepted best practiceIs the standard or risk assessment in wide circulation and use?Policy officers should ensure that the standard or risk assessment is widely accepted amongst stakeholders andcan be used and followed.HarmonisationDoes the standard or risk assessment have an impact on state/territory procedures?Policy officers should work with their counterparts in State and Territory governments to ensure the standard orrisk assessment can be applied across jurisdictions and that practices and procedures are harmonised.InfluenceHas Australia had some involvement or influence in the development of the standardor risk assessment?Policy officers should confirm whether Australia has been involved or influenced the development of the standardor risk assessment. This will provide assurance that the standard is from a credible source and can be used in anAustralian context.International obligationsDoes the use of the standard or risk assessment allow Australia to meet its international obligations?Policy officers should ensure that the standard or risk assesment does not create a barrier to trade or animpediment to other international agreements or treaties that Australia is a signatory to. i.e. Australia is a party tothe World Trade Organisation Agreement on Technical Barriers to Trade.8
Section 4: Assessingperformance and outcomesThe next assessment is designed to provide assurancethat the standard or risk assessment will perform asexpected to support the policy or program outcome. Itis recommended that any analysis completed by policyofficers is documented.Policy officers should gathersupporting information and evidencethat demonstrates that the chosenstandard or risk assessment is themost effective response to achievethe objective.Gathering information andevidence on performancePolicy officers should gather a wide range of informationabout how the standard or risk assessment has beenused previously and what were the resulting outcomes.It is recommended that policy officers gather informationfrom a variety of sources including feedback fromstakeholders; and analysis and research from otherjurisdictions.Regulatory burdenPolicy officers need to be cognisant that the chosenstandard or risk assessment should seek to limit theregulatory burden for stakeholders. Policy officers areencouraged to make a determination in consultationwith their stakeholders through the completion of theRegulatory Burden Measure online tool. Policy officerswho need further assistance identifying the regulatoryimpact of using standards should contact the RegulationReform team at deregulationpolicy@industry.gov.au.If the use of a standard does increase the regulatoryburden, officers will need to identify a regulatory offset.Cost benefit analysisDepartmental policy officers must demonstrate thatthe use of a standard or risk assessment to support apolicy or program will provide an overall net benefit tostakeholders. If net benefit cannot be demonstrated, itis likely to be rejected by the decision-maker, and otherpolicy options may need to be considered.The degree, depth and detail of the analysis must becommensurate with the magnitude of the problem andthe size of the potential impact of the proposal. Wherequantitative data is readily available, policy officers shoulduse this data and state its source. Where quantitative datais not available, officers can use qualitative descriptions.Any assumptions from trusted-third parties must bestated in the analysis.Guidance on how policy officers can calculate costs andbenefits of using a particular standard or risk assessmentcan be found in Annexes D and E of this guide.9
Section 5: Adoption ofstandards and risk assessmentsThis section states the steps that need to be taken toincorporate the standard into a policy or regulation.Once a standard or risk assessmenthas been found to be appropriate, aplan for adoption must be developedand then implemented.Assistance from standards andconformance infrastructureDepartmental policy officers should liaise with standardsand conformance bodies early in the adoption process.Each organisation can assist policy officers to ensurethat the standards and conformance frameworks beingapplied are contributing effectivelyto the intended policy and regulatory objectives.The website of each organisation can be found atAnnex A or alternatively the Trade Facilitation teamcan be contacted for further information atTradeFacilitation@industry.gov.au.Choosing policy or regulatoryframeworkFor a standard or risk assessment to be effective inpolicy or program, it needs to be adopted within a policyor regulatory framework. The selection of the mostappropriate policy or framework needs to be supportedby the associated RIS for the proposal.10Frameworks that can be used include: referencing a standard or risk assessment in an Act ofParliament or a regulatory instrument which wouldmake its use mandatory; referencing a standard or risk assessment within anAct of Parliament or regulatory instrument as a ‘meansof compliance’, which does not prevent the use of analternative method providing that it meets the specificcriteria; using a standard or risk assessment in contracts thatoutline conditions with suppliers; using the technical information within a standard orrisk assessment and incorporating this into guidancematerial.In selecting the appropriate framework, policy officersneed to make a determination as to whether the chosenstandard or risk assessment should be mandatory orvoluntary. Standards and risk assessments are voluntarydocuments and only become mandatory when containedin legislation or regulation.Referencing of standardsIt is important that policy officers correctly reference thechosen standard or risk assessment. The referencing of astandard or risk assessment is crucial as this is the mainmeans of identification for stakeholders. There are threedifferent aspects to consider when referencing a standardto support a policy or program. Policy officers shouldwork through each aspect detailed in the following figureto ensure proper referencing.Policy officers can also gain more information on how toreference a standard correctly in Annex F of this guide.
Figure 3 - Referencing considerations for standards and risk assessmentsIs the standard properly identified?The chosen standard should be properly referenced in all supporting materials in a prominent position so that it canbe easily identified by stakeholders.Will the standard be dated or undated?Departmental policy officers need to consider whether the chosen standard will be ‘dated’ or ‘undated’. If astandard is ‘dated’, it refers to a particular version of that standard, which may need to be monitored to ensure itdoes not lose its currency. If a standard is ‘undated’, it refers to the latest version of the standard, therefore it maybe subject to change over time.Will the standard be adopted fully or partially?Policy officers should consider their intended policy or program outcome and ask whether it would be best metby using the standard as a whole or only specific parts. Policy officers should consider the ramifications of notadopting the standard as a whole, as it may impact the technical integrity and understanding of a standard.Assessing compliance witha standardThe desired policy or regulatory outcome will determinewhich form of certification is appropriate if required.A risk assessment or conformity assessment involves a setof processes that shows that a product, service or systemmeets the requirements of a standard. The ma
Standards and risk assessments can be used in different policy settings . This section will explore the three main policy settings that occur within the department and how standards and risk assessments have been used in each . Policy officers should consider whether their policy setting is suitable for using standards and risk assessments to
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