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 2009• 28 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 Findings3. 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 Recommendations7. 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• 4 - 6 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• 2011-2012:

– 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.

Questions?

Thank You