Section 2: Policy settings for standards and risk assessments

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.

Use of standards and risk assessments in performance-based settings

In a performance-based setting, policy officers specify performance goals and stakeholders can nominate a standard or risk assessment to demonstrate they can meet performance requirements. Policy officers then determine whether the standard or risk assessment stated is adequate. This option provides a flexible compliance framework that eliminates the requirement for a tailored response in the Australian market. Policy officers should give preference to performance based standards where feasible and appropriate.

Standards in Action - Performance-based settings - NOPSEMA

A prominent example of standards being used in a performance-based setting is the regulation of environment and safety in Australia by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA). Principally the regime for the regulation of safety, well integrity and environmental management for the offshore petroleum industry is ‘performance-based’. The offshore duty holder is required to specify, as part of their submissions any Australian or international standards applied in relation to the design of a facility, selection of a plant and equipment, or the conduct of an activity.

In this regard, the regulatory regime administered by NOPSEMA enables duty holders to utilise any Australian and/or international standard, international industry practices (such as those developed by the International Organisation of Oil and Gas producers, the American Petroleum Institute) or company specific standards that are appropriate to the particular circumstance.

Use of standards and risk assessments in prescriptive-based settings

In a prescriptive-based setting, standards and risk assessments can be used as a definitive means for stakeholders to meet an outcome. Policy officers specify which standard or risk assessment is to be used to meet a desired policy or regulatory objective. In such circumstances, the requirements are expressed in precise terms through referencing the standard in legislation and/or regulation. The benefit of such is that stakeholders can adhere to a policy or regulation with a resource that is publicly available and is updated regularly to reflect current best practice.

Standards in Action - Prescriptive-based settings - Australian Wiring Rules

AS/NZS 3000:2007 Electrical installations (Australian/New Zealand Wiring Rules) is the joint Australian/New Zealand standard that sets out the requirements for the design, construction and installation of electrical equipment to protect people, property and assets from the hazards that may occur from an electrical installation. The standard is used in legislation and regulations throughout Australia. The standard provides uniform essential elements that constitute minimum safe requirements for a safe electrical installation as well as the provision of installation practices that achieve certainty of compliance with essential safety requirements.

Use of standards and risk assessments in both performance-based and prescriptive-based settings

There are circumstances in which policy officers will determine that it is appropriate to provide flexibility and choice to stakeholders in their means to achieve or demonstrate compliance. Such settings will comprise elements of both performance and prescriptive-based settings. In such settings, policy officers can provide a choice to stakeholders by offering either a ‘deemed to satisfy’ solution or an alternative method of demonstrating compliance of the stakeholders choosing. This approach has the benefit of providing a solution for the stakeholder to use, but also allows alternative options where suitable.

Standards in Action - The National Construction Code

The National Construction Code (NCC) provides the minimum necessary requirements for safety, health, amenity and sustainability throughout Australia. The NCC is a performance-based code that provides users with a variety of methods to demonstrate compliance. A ‘Deemed to Satisfy’ provision is provided that is a benchmark to users on how to be compliant. Users also have the option of putting forward a Performance Solution (i.e. a new assessment method) to have the practice properly evaluated against the performance requirements. This encourages innovation amongst users and provides flexibility in regulating how users comply with the Code.

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