Tobacco Plain Packaging Enforcement Policy February 2013
This Department of Health and Ageing Tobacco Plain Packaging Enforcement Policy (the Enforcement Policy) contains general information only and should not be relied upon for the purposes of a particular matter. It does not provide legal advice and is not to be relied upon as a source of legal advice. It is provided as a general guide only and as such any person reading this Enforcement Policy should rely upon their own judgment and make their own inquiries including seeking relevant professional advice before entering into any arrangements or making any commitment on the basis of any of the material in this Enforcement Policy. Nothing in this Enforcement Policy shall be taken in any way to replace the provisions of the Tobacco Plain Packaging Act 2011 (Cth), the Tobacco Plain Packaging Regulations 2011 (Cth) or any other legislative instruments made pursuant to tobacco control.
© Commonwealth of Australia 2013
1. Purpose of the Enforcement PolicyThe Tobacco Plain Packaging Enforcement Policy (Enforcement Policy) sets out the principles adopted by the Department of Health and Ageing (DoHA) in its enforcement of the Tobacco Plain Packaging Act 2011 and the Tobacco Plain Packaging Regulations 2011 (together, the TPP Legislation). DoHA has responsibility to investigate and enforce the TPP Legislation on behalf of the Commonwealth. The Australian Government is committed to the full enforcement of the TPP Legislation. In doing so, it recognises that consideration may need to be given to the range of enforcement options available and has developed this Enforcement Policy to explain the options for enforcement of the TPP legislation and the strategies and priorities that will guide decisions about enforcement actions.
This Enforcement Policy is effective from 1 March 2013 and will recognise a supply chain sell-through period for non-compliant cigarette sticks in compliant packaging until 30 June 2013 (“sell-through period”). The sell-through period recognises that residual numbers of non-compliant cigarette sticks in compliant packaging may take longer than expected to flush through the supply chain, especially in small retail stores in suburban, rural and remote areas. Where the contents of the packaging are non-compliant because they perpetuate either concentric rings around or lines along the casing of cigarette sticks, or in respect of the alphanumeric codes applied to cigarette sticks, it is recognised that retailers will be unable to identify this problem without opening cigarette packaging.
This sell-through period will not be extended beyond 30 June 2013.
A. Tobacco Plain Packaging Act 2011In April 2010, the Government announced that it would introduce legislation to mandate the plain packaging of tobacco products. Alongside this measure, health warnings on tobacco products were also to be updated and expanded.
The Tobacco Plain Packaging Act 2011 (the Act) became law on 1 December 2011 and requires that:
- after 1 October 2012, all tobacco products manufactured or packaged in Australia for the Australian market must be in plain packaging; and
- after 1 December 2012, all tobacco products sold, offered for sale or otherwise supplied in Australia must be in plain packaging and be labelled with the new and expanded health warnings.
The objects of the Act are stated in section 3 of the Tobacco Plain Packaging Act 2011.
B. Health warningsThe Australian Government is responsible for mandating health warnings on the packaging of tobacco products sold in Australia.The health warnings have been updated and expanded under the Competition and Consumer (Tobacco) Information Standard 2011 (the Standard), which commenced on 1 January 2012. Under the Standard, from 1 December 2012, retail packaging of tobacco products must display the new warnings.
DoHA has policy responsibility for health warnings, while the Standard is administered within the Treasury portfolio and enforced by the Australian Competition and Consumer Commission, in collaboration with the state and territory fair trading agencies. The Enforcement Policy does not affect, in any way, the enforcement of the Standard by those agencies.
3. Principles underlying this Enforcement PolicyDoHA will exercise its enforcement powers in an appropriate manner using the principles of proportionality, transparency, consistency, confidentiality (where appropriate) and timeliness.
A. ProportionalityAny enforcement action undertaken will be proportionate to the seriousness of the non-compliance.
B. TransparencyGuidance material on compliance with the TPP Legislation together with compliance policies and strategies are publicly available so that regulated entities understand what is expected of them and how their compliance will be enforced. Regulated entities, where appropriate, will be informed of decisions made and the grounds for the decisions.
C. ConsistencyA consistent national approach is taken in interpreting, applying and enforcing the TPP Legislation.
D. ConfidentialityGenerally, investigations are conducted confidentially and DoHA will not comment on matters it may or may not be investigating.
E. TimelinessDoHA will run all investigations as efficiently as possible to avoid costly delays and uncertainty.
4. Aims of Compliance and Enforcement ActivityIn enforcing the provisions of the TPP Legislation, DoHA’s primary aims are to:
- ensure the highest level of compliance with the TPP Legislation;
- deter future non-compliance;
- encourage the effective use of compliance systems; and
- encourage reporting of non-compliance.
To assist with these aims, it is necessary to ensure a balance between the appropriate use of resources and effective compliance with the TPP Legislation. The aim is to achieve the highest level of tobacco manufacturer and supplier compliance.
DoHA recognises that the introduction of the TPP Legislation has resulted in significant changes for tobacco manufacturers and suppliers. Accordingly, DoHA’s approach in the sell-through period for suppliers will continue to focus mainly on education and communication unless there are factors that indicate that this would not be an appropriate course of action.
The use of the word 'suppliers' in the Enforcement Policy is, for the purposes of the Enforcement Policy, intended to include all wholesale or retail suppliers of tobacco products, but shall not include manufacturers of tobacco products or related entities of manufacturers involved in the distribution or supply of tobacco products to arms-length wholesale or retail suppliers.
5. Enforcement optionsNot every contravention of the TPP Legislation must be prosecuted. A range of enforcement options are available, from education and warnings through to civil or criminal proceedings. These options are:
- education and communications;
- notice of alleged non-compliance;
- written warning;
- infringement notice;
- civil penalty; and
- criminal prosecution.
A. Enforcement CommitteeThe Tobacco Plain Packaging Enforcement Committee (Enforcement Committee) has been established, comprising representatives from DoHA and the National Measurement Institute (NMI).
The NMI, through its authorised officers, will undertake compliance and enforcement activities across Australia on DoHA’s behalf and will report potential contraventions to the Enforcement Committee.
The Enforcement Committee will consider reports of potential contraventions of the TPP Legislation and advise what actions, if any, should be taken in relation to the contraventions. The Enforcement Committee may recommend enforcement through use of administrative mechanisms (as set out in section 5B below), or recommend to DoHA decision makers that consideration be given to the commencement of civil or criminal proceedings (as set out in section 5C below).
Alternatively, the Enforcement Committee may consider that education already provided by the NMI’s authorised officers is sufficient or that the appropriate response to a contravention is to provide further education and communication or to issue a written warning. Where the Enforcement Committee considers that more serious action should be taken, it will recommend that action to the appropriate decision maker.
In considering what action, if any, DoHA should take in relation to a report it receives from the Enforcement Committee, DoHA will consider:
- the recommendation of the Enforcement Committee; and
- the seriousness of the contravention.
In assessing the seriousness of the contravention, DoHA may have regard to any evidence concerning:
- the extent of the contravention;
- the efforts, if any, made to comply with the plain packaging laws;
- the reason for the contravention;
- any history of contraventions;
- the previous provision of any educational information;
- any likelihood of future contraventions;
- any apparent willingness to comply with the plain packaging laws in the future; and
- any other matter it considers relevant.
B. Administrative enforcement1) Communications, information and education
Measures such as communications, the provision of information and education are designed to encourage compliance. To this end, DoHA has already employed a comprehensive communications and information strategy to ensure tobacco manufacturers and suppliers are aware of their responsibilities and obligations under the TPP Legislation.
Education will continue to be an important feature of DoHA’s compliance and enforcement approach during the sell-through period of the Enforcement Policy. However, DoHA's reliance predominantly on education as an enforcement tool will decrease over time as manufacturers and suppliers are expected to enhance their compliance mechanisms relating to the packaging and appearance of tobacco products.
2) Notice of Alleged Non-Compliance
Authorised officers may issue manufacturers or suppliers a Notice of Alleged Non-Compliance recording the nature of the activity alleged to be contravening the TPP Legislation, and provide guidance on rectification or other education. Authorised officers may re-visit manufacturers or suppliers that have been issued with such a notice to ensure that the manufacturer or supplier is complying with the TPP Legislation.
3) Written warning
In some circumstances it may be appropriate for the Enforcement Committee to issue a written warning. Authorised officers may re-visit manufacturers and suppliers that have been issued with a written warning to ensure that appropriate action has been taken. Failure to comply following a written warning will, in most cases, lead to the issuing of an infringement notice or other enforcement action being undertaken against the manufacturer or supplier.
4) Infringement notices
Infringement notices may be issued when an authorised officer has reasonable grounds to believe that a manufacturer or supplier has contravened a strict liability offence under the Act. A strict liability offence is one which does not require proof that the manufacturer or supplier intended to contravene the TPP Legislation, only that the manufacturer or supplier committed the prohibited act.
Where an authorised officer has reasonable grounds to believe that a manufacturer or supplier has contravened a strict liability offence, the officer will seek advice and guidance from the Enforcement Committee on the issuing of an infringement notice.
An infringement notice may be issued where there has been a suspected contravention of the Act the seriousness of which requires a more formal sanction than a Notice of Alleged Non-Compliance or a written warning. For example, an infringement notice may be appropriate where:
- there is prima facie evidence of a contravention; and
- the nature of the contravention is not relatively severe (e.g. the packaging is substantially compliant) and there are no aggravating factors (e.g. intentional or reckless attempts to evade); and
- there have been no previous infringement notices for similar contraventions; and/ or
- a fine is a reasonable and appropriate penalty in the circumstances.
An infringement notice will include details of the amount payable under the notice, the time for payment and how payment is to be made. A person may choose not to pay the amount, however payment of the amount within the specified time will prevent civil or criminal proceedings being brought against the person in relation to the alleged contravention. Payment of an infringement notice is not to be taken as an admission of guilt for the alleged contravention.
An infringement notice must be issued within 12 months after the day on which the contravention is alleged to have taken place.
C. Court enforcementWhere there is a moderate to high level of non-compliance by a manufacturer or supplier of tobacco products, legal action will be pursued if, having regard to all the circumstances, DoHA’s decision makers consider it is the most appropriate way to achieve its compliance and enforcement objectives.
DoHA is more likely to proceed to litigation in circumstances where the conduct is egregious, where there is reason to be concerned about future behaviour or where the party involved fails to demonstrate a willingness to achieve complete compliance.
In these circumstances, DoHA may undertake one or more of the following actions.
An application for an injunction may be made to restrain a manufacturer or supplier of tobacco products from further conduct that may or would constitute an offence under the Act. An injunction may be applied for where the offence is serious and/or the impact of the offence is serious.
2) Civil penalty
A civil penalty is imposed by proving a contravention through a civil court procedure rather than through the criminal court process. A civil penalty is a purely monetary penalty, and does not result in any criminal conviction.
DoHA is likely to commence civil proceedings where the conduct is egregious, where prior enforcement actions have not led to rectification of non-compliance, or where there is reason to be concerned about future non-compliance.
3) Criminal prosecution
DoHA will refer an alleged contravention to the Commonwealth Director of Public Prosecutions (CDPP) for prosecution where there is prima facie sufficient evidence that an offence has been committed and one or more of the following applies:
- public interest considerations support prosecution action;
- other enforcement options are not appropriate, or have been employed but proved ineffective;
- the alleged contravention is of such a nature or magnitude that a strong disincentive to potential offenders is warranted and prosecution is considered to be an appropriate enforcement action;
- the compliance history of the non-compliant manufacturer or supplier demonstrates a high future compliance risk.
The decision to prosecute rests with the CDPP who will assess the information and determine if there is a reasonable prospect of conviction based on admissible, substantial and reliable evidence. The CDPP Guidelines on Prosecutions are available at Commonwealth Director of Public Prosecutions Office website.
6. Enforcement ApproachAs stated at the beginning of this Enforcement Policy, the use of the word 'suppliers' is, for the purposes of the Enforcement Policy, intended to include all wholesale or retail suppliers of tobacco products, but shall not include manufacturers or related entities of manufacturers involved in the distribution or supply of tobacco products to arms-length wholesale or retail suppliers (‘manufacturers’).
A. Suppliers1) Substantial compliance with minor or anomalous non-compliance
Where a tobacco supplier is substantially compliant with the plain packaging laws but has committed a relatively minor or anomalous contravention, DoHA will consider a range of enforcement actions including the provision of education and information to the supplier, the issue of a Notice of Alleged Non-Compliance, a warning and/or an infringement notice. If appropriate, authorised officers may re-visit the supplier at a later date to ensure compliance.
2) Sale of a tobacco product with a non-compliant appearance (e.g. cigarette sticks)
DoHA recognises that, particularly in the sell-through period, it will be difficult for suppliers to confirm that the contents of tobacco packaging (eg cigarette sticks) comply with the TPP Legislation. In the event that suppliers contravene the legislation in relation to the appearance of tobacco products (such as in relation to non-compliant paper casing or the alphanumeric codes on cigarette sticks ) contained in otherwise compliant external packaging, DoHA will, during the sell-through period seek to educate suppliers. Authorised officers may revisit the supplier at a later date to ensure compliance, if DoHA considers it appropriate.
3) Significant non-compliance
Suppliers selling or offering for sale tobacco products in non-compliant packaging will be issued a Notice of Alleged Non-Compliance and be provided with education and information, and may be issued with a written warning or an infringement notice. The Enforcement Committee may recommend to DoHA decision makers that court action be initiated against the supplier.
Factors to be taken into account in deciding the appropriate enforcement approach include the seriousness of the contravention and whether the supplier has previously been educated about a similar contravention.
B. ManufacturersManufacturers who are non-compliant with the TPP Legislation for any reason will be issued with a Notice of Alleged Non-Compliance, a warning or an infringement notice, or court action initiated against the manufacturer.
Nevertheless, a manufacturer’s efforts to ensure compliance by facilitating the removal of non-compliant stock from a non-complying retailer’s premises within a reasonable period (as defined in section 7, below) will be taken into account by the Enforcement Committee when deciding what enforcement action may be appropriate.
7. Supply chain issues after the sell through periodIn relation to supply chain issues that arise for non-compliant cigarette sticks (either concentric rings around or lines along the casing of cigarette sticks, or in respect of the alphanumeric codes applied to cigarette sticks) manufactured in Australia for the domestic market prior to 1 February 2013, but that are found in the retail market after 30 June 2013, the Enforcement Committee will consider the various enforcement options and respond appropriately.
In its deliberations concerning the conduct of manufacturers, the Enforcement Committee will consider the conduct of the manufacturer in relation to the alleged non-compliance, particularly whether the manufacturer facilitated the return of non-compliant stock from the retailer in question within a reasonable period. For the purpose of this and the following paragraph, a reasonable period will be regarded as seven (7) business days for the Major Cities of Australia (RA1) and fourteen (14) business days for Inner Regional Australia (RA2), Outer Regional Australia (RA3), Remote Australia (RA4) and Very Remote Australia (RA5) under the Australian Standard Geographical Classification- Remoteness Area
In its deliberations the Enforcement Committee will consider the conduct of the suppliers in relation to the alleged non-compliance, particularly whether they have ensured the removal of all non-compliant stock from the store in question within a reasonable period.
8. Referral to another agencyMatters that do not fall within the jurisdiction of DoHA may be referred to another Commonwealth or state and territory agency with the appropriate jurisdiction.
1 Further information on the Australian Standard Geographical Classification – Remoteness Area (ASGC-RA) is available at Department of Health and Ageing website.
The Tobacco Plain Packaging Information Kit provides practical information on the responsibilities and obligations of retailers and other suppliers of tobacco products under the new Tobacco Plain Packaging Act 2011.
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