WELS Scheme Independent Review

Background WELS scheme commenced in 2005 s76 of WELS Act 2005 requires an independent review after 5 years Dr Chris Guest appointed in Nov 2009 to undertake the review

Terms of Reference Independent Review terms of reference included consideration of: –Appropriateness, efficiency and effectiveness of scheme to date –Opportunities for improvement Terms of reference also required stakeholder consultation

Review Process Commenced in Dec 2009 Concluded June 2010 Stakeholder consultation included: –53 stakeholder meetings Feb & Mar 2009 –Discussion paper and call for written submissions in Apr & May submissions received –4 additional roundtable meetings in Apr 2009

Review Findings A good public policy Strong stakeholder support Scheme’s objectives continue to be appropriate National scope is appropriate and efficient

Review Findings Scheme provides considerable benefits to a broad range of stakeholders including consumers, industry, utilities and governments Scheme used across all states and territories in programs and regulations, and by water utilities in supply plans A similar initiative to WELS would be needed if the scheme didn’t exist

Review Findings Four significant issues require attention to improve the delivery of the WELS scheme: 1.Governance –WELSAC and Ministerial Council –Stakeholder engagement 2.Compliance –Civil offences/sanctions needed –Offences should be recast –Increase checktesting

Review Findings 3.Administration –Appropriateness of arrangements with E3 program and WaterMark certification scheme 4.Level and source of funding –Scheme under resourced –Current model / funding strategy inappropriate Review makes recommendations across 12 areas

Summary of Recommendations 1.Governance: –WELSAC develop 3-year strategic plans and budgets for Ministerial Council approval –Decision making within 3-year plans delegated to WELSAC –WELSAC renamed WELS Officials Group and level of representation increased

Summary of Recommendations 1. Governance continued: Establish WELS Stakeholder Advisory Group: –WELSAG to comment on 3-year strategic plans –WELSAG members invited by Minister

Summary of Recommendations 2.Objects of Act: –Review recommended no changes be made to the objects of the Act at this time

Summary of Recommendations 3.WELS Standards: –Retain Standards Australia process –WELS Regulator more actively manage Standards Australia processes –Further grandfathering provisions

Summary of Recommendations 4.The WELS Regulator: –Merge administration of WELS whitegoods products with E3 scheme administration –Transfer administration of WELS plumbing products to body responsible for WaterMark certification

Summary of Recommendations 5.Registration: –Limit family of models provision to cosmetic variants –New registration required for re-branded models –Remove gazettal requirement for new registrations –Annual notices to verify registration data and remove 5-year registration renewal requirement –Remove provision for voluntary registration

Summary of Recommendations 6.Labelling: –Consistent labelling showing: Brand Model name and number WELS registration number Star rating and water efficiency

Summary of Recommendations 7.Compliance: –Civil and criminal –New / additional sanctions Apologies Corrections Suspensions and deregistration Recalling Compensation

Summary of Recommendations 7.Compliance continued: –Recasting of offence provisions –Cooperative agreement with ACCC –Increased checktesting –Advertising information not required

Summary of Recommendations 8.Communications: –Adopt a range of new communication activities including training programs for retail sales staff

Summary of Recommendations 9.Product expansion and minimum WES: –Undertake CBA on removing ratings and substituting with minimum WES on plumbing products

Summary of Recommendations 10.Cost Recovery: –Cost recovery limited to costs of registration –Governments contribute funds needed to meet the gap between registration income and scheme costs

Summary of Recommendations 11.NZ WELS Scheme and TTMRA: –WELSAC monitor the impact on Australian market of the NZ WELS scheme

Summary of Recommendations 12.Relationship to other schemes: –Single web portal for WELS, WaterMark, and Smart-Approved WaterMark (SAWM) –MOU between WELS and SAWM

Next Steps Release of independent review report Release of initial response for consultation Staged process for developing / implementing a final response Target – new arrangements in place by 1 July 2012

Initial Response Not final – dependent on further consideration and consultation Indicative responses – 3 categories: –Agreement expected (Cat 1) –Agreement likely but issues to finalise (Cat 2) –Noted: open position with further detailed work required (Cat 3)

Overview: Initial Response Categories 1 & 2 Governance: mostly category 1 WELS Standards: categories 1 and 2 Compliance: mostly category 2

Other Category 1 Other areas of mostly category 1: –Objects of Act –Communications –Product expansion and minimum WES –NZ WELS scheme

Other Category 2 Other areas of mostly category 2: –Relation to other schemes Single web portal MOU with SAWM

Overview: Initial Response Category 3 WELS Administration (E3, WaterMark) Registration (family of models, re- branding, voluntary registrations) Labelling (full information / details) Cost recovery

Process Ahead: Action Plan Next 2 – 3 months: –Receive and consider initial feedback –Progress initial category 1 positions –Commence detailed evaluation of contestable positions – especially funding and registration

Process Ahead: Action Plan months: –Progress update to partners and stakeholders –Consult on detailed evaluations / options –May 2011 EPHC: Update joint governments’ position, including at least in-principle agreements to contestable positions and commence statutory processes –Establish WELSAG –Advance strategic plan development

Process Ahead: Action Plan : –Consult on and progress required statutory processes and draft legislation –Nov 2011 EPHC: Finalise 3-year strategic plan Finalise outstanding policies –Finalise legislation / legislation instruments.

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