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Edited version of private ruling

Authorisation Number: 1011597843092

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Ruling

Subject: product stewardship (oil) - category 8 benefit

Question:

Are you entitled to a product stewardship (oil) benefit under category 8 for the use of recycled or virgin paraffinic process oils in your timber preservative and timber finish products?

Answer:

No.

This ruling applies for the following period/s:

2003-04 income year

2004-05 income year

2005-06 income year

2006-07 income year

2007-08 income year

2008-09 income year

2009-10 income year

2010-11 income year

The scheme commences on:

1 July 2003

Relevant facts and circumstances

You are a discretionary trust.

You have a corporate trustee.

You are a manufacturer of remedial timber preservatives for domestic and commercial use.

Some of your preservative products use recycled or virgin light paraffinic process oils used as the carrier for the active ingredients.

You also use virgin paraffinic process oil for use in exterior timber finishes.

You state the virgin and recycled paraffinic oils are used as raw materials and not as lubricants.

You seek an exemption to the product stewardship oil programme for recycled and virgin multi-use oils.

You believe that the timber preservatives that use paraffinic oils as part of the formulation closely resemble an agricultural spray as provided for under Schedule 1 of the Product Stewardship (Oil) Declaration 2003 (Schedule).

You state the basis for this is because agricultural products are required to be registered for use with the APVMA under the Agricultural and Veterinary Chemicals Act 1994.

Section 4 of the Agricultural and Veterinary Chemicals Act 1994 provides for the definition of APVMA as:

It is your view that because timber preservatives fall under this legislation as an agricultural product, all products listed under this Act that use paraffinic oils as a raw material should be considered for exemption.

You also believe that the timber finishes and other products that use virgin paraffinic oils as part of their formulation closely resemble an ink, varnish or resin for printing as provided for in the Schedule.

It is your view that the formulations of inks, varnishes and resins are similar to other surface coatings such as paints and adhesives and are categorised as being similar in formulation by the industry association Surface Coatings Association Australia (SCAA). As such, it is your view that the use of paraffinic oils as raw materials should be considered for exemption.

Relevant legislative provisions

Product Stewardship (Oil) Act 2000 section 6

Product Stewardship (Oil) Act 2000 subsection 6(a)

Product Stewardship (Oil) Act 2000 section 9

Product Stewardship (Oil) Act 2000 subsection 9(3)

Product Stewardship (Oil) Declaration 2003 schedule 1

Reasons for decision

You have stated that you would like to apply for an exemption to the Product Stewardship (Oil) Programme (PSO) for recycled and virgin paraffinic process oil as currently an exempt use does not exist for your specific circumstance. As the Product Stewardship (Oil) Act 2000 (PSOA) does not contain any provision for an exemption in your circumstances we have interpreted your request as follows:

You would like to apply for a product stewardship (oil) benefit for the use of a gazetted oil in a gazetted use (category 8) on the basis that your use of the oil has aspects that are similar to other gazetted uses.

Category 8 benefit

Subsection 9(3) of the PSOA provides that you are entitled to a product stewardship (oil) benefit for:

Section 6 of the PSOA defines 'gazetted oil' as:

… oil of a kind that is declared by the Minister, by notice published in the Gazette, to be gazetted oil.

The term 'gazetted use' is defined in section 6 of the PSOA as:

… in relation to gazetted oil, means a use of the oil that is declared by the Minister, by notice published in the Gazette, to be a gazetted use, being:

(a) a use in the manufacture of a product:

(i) that will not permit the oil to be recycled; and

(ii) that constitutes only a low risk to the environment; or

(b) a use in a process:

(i) that will not permit the oil to be recycled; and

(ii) that constitutes only a low risk to the environment.

Schedule 1 to the Product Stewardship (Oil) Declaration 2003 (Schedule) lists those oils, and the use of the oil, that the Minister has declared to be a gazetted oil and a gazetted use for the purposes of subsection 9(3) of the PSOA. The Declaration is published in the Commonwealth of Australia Gazette No. S 437, and refers to a use that occurs on or after 27 March 2003.

Thus, where an oil is:

all the conditions of the definition of a gazetted oil and gazetted use under section 6 of the PSOA are met.

Where an entity uses the oil in the manufacture of the product in Australia, or uses the oil in a process that is done in Australia, the oil is consumed in Australia.

Column 2 of item 2 of the Schedule includes paraffinic process oil as a gazetted oil. Column 3 of item 2 of the Schedule explains that the gazetted use of the kind of oil listed in column 2 of item 2 of the Schedule is incorporation into any of the following:

You use paraffinic process oil in manufacturing your timber preservative and exterior timber finish products. You have stated that the virgin and recycled paraffinic oils are used as raw materials and not as lubricants.

Although paraffinic process oil is a gazetted oil, it is not incorporated into a product with a gazetted use. Rather, it is incorporated into timber treatment and finish products which are not gazetted uses listed in the Schedule.

While you say the timber preservative resembles an agricultural spray and must be registered for use with the Australian Pesticides and Veterinary Medicines Authority by virtue of section 6 of the Agricultural and Veterinary Chemicals (Administration) Act 1992 there is no discretion within the PSOA or the Schedule that allows us to consider a product that resembles a gazetted use. It must be one of the uses that the Minister has declared to be a gazetted use.

Further, you state that the formulations of inks, varnish and resins are similar to other surface coatings such as paints and adhesives and are categorised as being similar in formulation by the industry association Surface Coatings Association Australia.

You believe timber finishes closely resembles the gazetted use outlined at Column 3 of item 2 in the Schedule - an ink, varnish or resin for printing.

However, once again there is no discretion within the PSOA or the Schedule that allows us to consider a product that resembles a gazetted use. It must be one of the uses that the Minister has declared to be a gazetted use.

Accordingly, category 8 does not apply in this instance.

As such, you are not entitled to a product stewardship (oil) benefit under category 8 for the use of recycled or virgin paraffinic process oils in your timber preservatives and timber finishes as there would be no entitlement under subsection 9(3) of the PSOA.

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