Response 740596112

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Yes, I agree and would like to make a confidential submission
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Your details

Name and contact details

Name
John W Clark

I am submitting on behalf of

Submission for
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Myself
Ticked Business
Consumer association
Government department/agency
Industry association

Industry information - Business

Your industry

ANZSIC: div_name
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Agriculture, Forestry and Fishing
Mining
Manufacturing
Electricity, Gas, Water and Waste Services
Construction
Wholesale Trade
Retail Trade
Accommodation and Food Services
Transport, Postal and Warehousing
Information Media and Telecommunications
Financial and Insurance Services
Rental, Hiring and Real Estate Services
Ticked Professional, Scientific and Technical Services
Administrative and Support Services
Public Administration and Safety
Education and Training
Health Care and Social Assistance
Arts and Recreation Services
Other Services

Type of business

Type of business
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Servicing licensee (verifier)
Ticked Legal metrology authority
Measuring instrument supplier/distributor
Measuring instrument user
Other

Number of Employees

Number of Employees
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0-4
Ticked 5-19
20-199
200+

How many measuring instruments does your business interact with per year? (e.g. used/sold/verified)

Number trade instruments
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1-10
Ticked 11-50
51-100
100+

Submission process

How would you like to submit your response

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Ticked Through the online survey
Emailing a confidential response

Policy objectives for legal metrology in Australia

Are the following policy objectives appropriate for legal metrology in Australia?

Supporting confidence in the measurement system
Please select one item
Ticked Yes No Unsure
Facilitating a level playing field for business
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Ticked Yes No Unsure
Consumer (or the broader term customer) protection
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Ticked Yes No Unsure
Supporting industry development and technology innovation
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Ticked Yes No Unsure

What is the relative importance of the following policy objectives for legal metrology in Australia?

Supporting confidence in the measurement system
Please select one item
Not important Somewhat important Highly important Unsure
Facilitating a level playing field for business
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Not important Ticked Somewhat important Highly important Unsure
Consumer (or the broader term customer) protection
Please select one item
Not important Ticked Somewhat important Highly important Unsure
Supporting industry development and technology innovation
Please select one item
Not important Ticked Somewhat important Highly important Unsure

Further comments

Further comments policy objectives
We prioritise the objectives as follows: 1. MOST IMPORTANT: Supporting confidence in the measurement system: Sound evidential basis for legal and regulatory measurements. Properly designed policy about this objective will have a uniquely positive impact on all the other objectives. (a) Reduced disputation costs by making the dispute scientifically crystal clear (as possible/reasonable) (b) Facilitates a level playing field by putting objective science at the heart of the system (c) Consumer protection improved by putting objective science at the heart of the system (d) Properly designed principles-based policy will not create barriers to development/innovation 2. IMPORTANT: Customer protection (we prefer this over 'consumer' protection). This policy (via visible physical monitoring and enforcement) is essential to close the loop on the objective of supporting confidence in the measurement system. 3. IMPORTANT: Supporting industry development and technology innovation. I rank this higher than I would if the system were already ideal, because presently the system is far too prescriptive and therefore 'gets in the way' of development and technological innovation. A move towards 'principles based' regulation is the right way forward to address this issue. 4. LESS IMPORTANT: Facilitating a level playing field for business. The above priorities will mostly take care of facilitating a level playing field so that additional steps toward this goal may not be necessary. We would point out also that there is an (unintended or intended, I don't know) assumption that strictly level playing fields are always the best way. We disagree. Symmetry of MPE's is one example (see further comments below). 5. LEAST IMPORTANT: Reduced disputation and transaction costs in trade transactions. We rank this least important because disputes occur in a fractionally small proportion of cases and therefore by definition it should not be a high priority (as it seems disputation costs are not excessive presently anyway). As concerns transactional costs, moving towards a 'principles based' system will achieve the lion's share of transactional cost reduction.

Are there any other policy objectives for legal metrology that would assist in delivering successful outcomes for Australian businesses and consumer?

Any other policy ogjectives
We think there must be a regular feedback mechanism where the NMI surveys industry and consumers to understand how they view the current monitoring and enforcement activities. This is essential in order to achieve the goal of having effective monitoring and enforcement, for no other reason that *perception* of the quality of monitoring and enforcement is just as important as the actual number of door-stops. In case it's not already on the agenda, the move to 'principles based' regulation should (as concerns metrology) start at the root and prescribe the MPE's/metrological performance requirements for measurements in objective quantified terms and leave the rest to industry to innovate as much as possible. Obviously these quantified limits will include specification of the environmental limits and product (being measured) variations over which the prescribed measurements must maintain the required performance. If not already assumed, we believe the NMI needs to have a program of critical technical assessment of new technologies for any performance 'gaps' due to possible limitations of a new technology or approach, and to put in place safeguards and/or properly account for these. A classic case (in our industry) of where this problem exists but NMI to date has taken no action on (and in fact by its inaction has facilitated a weakening of confidence in the national measurement system) is in the matter of coriolis flow metering of LPG. Coriolis flow meters 'achilles heel' is external vibration. Various techniques, both physical and in software, are employed by coriolis meter manufacturers to try and minimise errors caused by (fundamentally unpredictable) external vibration. Our understanding is that software techniques are very complex and manage to reduce vibration errors dramatically however when the software fails, the resulting errors are significant. In outcome is that even best-in-class coriolis flow meters exhibit the behaviour where they mostly perform well but exhibit occasional 'shockers' (typically relatively large, seemingly random errors). The present situation (as I understand it) is that the NMI has observed this phenomena yet (because NMI has not yet devised a method to reliably trigger the error) has succumbed to pressure to approve these meters for measurement of LPG because it could not repeatedly reproduce the fault. If NMI had access to the software source code for the coriolis meter it would significantly improve the chance of being able to understand what was likely causing the phenomena and then craft a means for reproducing it, but the manufacturer denied access on the grounds that it was commercial-in-confidence information! So NMI's "hands were tied" by the manufacturer! Whilst the manufacturer should have the right to withhold commercial-in-confidence information it is perfectly reasonable that in such a situation the testing body can withhold approval. Defaulting to an "innocent until proven guilty" approach might be the correct approach for human court cases but should not be the default position where objective scientific testing is concerned. Stated another way, the manufacturer rejected NMI's requests and tied NMI's hands and NMI repaid this behaviour by issuing an approval! Our understanding is that this matter was compounded by the fact that the supplier obtained an OIML approval for their coriolis flow meter from a foreign testing organisation - an organisation that no doubt was either ignorant of this phenomena or also chose to look the other way - and then used that approval to pressure NMI to capitulate on the matter. There is another specific area of our industry where systemic faults exist (and have done so for decades) but have not been completely addressed: LPG vapour elimination. Some positive steps were taken by NMI in prior years - our understanding is that pattern approval testing now includes a test which simulates entrained vapour bubbles. This is a step in the right direction, but is only one aspect of the vapour problem. The most common vapour scenario is for service stations where LPG delivery systems are inactive for extended periods (such as low turnover service stations and service stations that shut down overnight). During inactivity large pockets of vapour develop that some dispenser designs are completely unable to remove, resulting in the situation where the first customer (after a long period of inactivity on the site) gets delivered (and unfairly charged for) a large pocket of vapour. This may also involve presentation of "golden samples" for pattern approval testing, to 'pass' the tests that do attempt to simulate this issue. This phenomena can be readily verified in the field via simple tests yet nothing is being done about it. This phenomena always results in overmeasure.

International cooperation and harmonisation

What should be the criteria for Australia's participation in the development of international documentary standards relevant to legal metrology?

Your response on criteria for Australia's participation in international standards
Criteria 1. Are there Australian manufacturers of measuring equipment covered by that standard? If yes, this argues in favour of involvement. 2. Are the measurements addressed in the standard popular in Australia? If yes, this argues in favour of involvement. 3. Are there Australians that possess particular expertise that would positively contribute to the ongoing development/improvement of that standard? If yes, this argues in favour of involvement.

What should be NMI’s approach to determining Australia’s pattern approval requirements where documentary standards from organisations such as the International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC) more fully account for recent developments in technology and operation of measuring instruments than equivalent OIML standards?

NMI's approach to pattern approval requirements
The principles should be: 1. Excepting national security/important national strategic considerations, Australia should seek to harmonise as much as possible with international standards and to encourage other countries to harmonise also. This should be seen as constructive long term policy. 2. In addition to the policy aspect, it makes sense to minimise duplication of effort wherever possible, therefore Australia's pattern approval processes should refer/defer to ISO/IEC/OIML standards wherever it is reasonable to do so (see particular examples of exceptions below). 3. A guiding principle should be to ensure, wherever practicable, that the minimum requirements established by the pattern approval requirements permit a wide enough range of competing products to create a functioning competitive market. 4. With regard to OIML standards that overlap in scope with IEC/ISO standards, we recommend a pragmatic approach of adopting whichever standard is superior or even a mix of both. As long as industry is given adequate notice (typically 5-6 years transition periods to allow for product development cycles) industry should be able to cope with changes to requirements.

To what extent should NMI consider flexibility to allow for particular circumstances in Australia when adopting international standards for pattern approval?

Further comments
It is standard practice for national standards to consider local conditions/circumstances when adopting international standards. This provides scope for national standards differ from their international counterparts to account for specific Australian conditions or local legal requirements. The overriding principle is always to minimise such deviations and to have processes in place to ensure that commercial interests are not influencing these deviations for commercial reasons. We are also very familiar with specific cases where standards were inadequate and local/national amendments were necessary to address these deficiencies. This occurs uncomfortably often, and is (in our view) due at least in part by the fact that although international standards technical committees are represented by many national representatives, those representatives often do not develop the technical content of the standard itself - that job is delegated to working groups which are comprised of (hopefully) experts active in that particular industry, but those experts have primary allegiance to their employer. Therefore, the working groups that draft international standard text exercise considerable control over the initial perspective the standard takes, and this can result in a sub-par and unbalanced standard which can remain thus for decades. The prior paragraph serves to highlight that NMI should always approach its involvement with standards with it's "eyes wide open", so to speak, fully cognisant that commercial influence is an ever-present issue. NMI, having technical experts available that are at "arms length" from industry, offers a valuable counter-balance to the commercial interests on standards technical committees. A real example of where Australia has done the right thing by deviating from pattern requirements in other jurisdictions in LPG. It is a basic scientific fact that reasonable MPE's cannot be attained for LPG metering systems without accounting for the composition of LPG (composition significantly affects expansion/contraction with temperature). Australia identified that technology was available to manage this issue and added requirements mandating that composition be measured and temperature correction factors incorporate this variable accordingly. Most other countries overlook the availability if this technology and either implement incomplete/half-baked LPG metrological systems (pretending the composition problem doesn't exist or mischaracterise it) or permit unnecessarily large MPE's for LPG measuring equipment.

Principles-based approach to regulation

What are the key principles that should drive Australia’s regulatory approach to legal metrology?

Key principles
1. First and foremost, appropriately verified fully traceable performance on all instruments operating for a legal metrological purpose 2. Enshrining the principle of clear understanding between parties of the performance limits of the legal measurement. What I mean by this is each party to a transaction should be able to easily (and at low/no cost) determine the metrological requirements (on the seller) and reasonable expectations (of the buyer). 3. Penalties that are commensurate with the scale of the infringement, so as to provide suitable deterrent without being excessive. The penalties should be sized so that business can see it is counterproductive/not profitable to try to cheat customers. 4. Adequate resources assigned to monitoring, enforcement and communication activities to ensure that industry is sufficiently encouraged to comply and consumers feel confident they are being protected. 5. All requirements are available for FREE and not behind paywalls. It is unethical to impose legal requirements on citizens behaviour but require those citizens to pay significant sums of money to unlock the details of those specific legal requirements (such as by by paying, often many hundreds of dollars, to obtain standards which are mandated by legislation). If it's important enough to be mandatory, then those requirements must be freely available. Shifting law behind paywalls is preposterous.

What concerns, if any, could there be for a business when managing compliance in a principles-based regulatory environment?

Business concerns managing compliance in principles-based envirnment
We disagree with the suggestion made by the discussion paper authors that a principles-based regulatory environment might necessarily make it difficult for some businesses (particularly small businesses) to comply. We would counter that only a poorly designed/impractical principles-based regulatory environment would have that problem. Within a principles based regulatory environment, the appropriate body (such as NMI or an industry association) can provide precise/prescriptive requirements/specifications (that are not legally binding) for one (or more) particular methods (or classes of instrument) that are suitable for a particular purpose and demonstrate why it complies with the regulatory principles. This allows small businesses that prefer a prescriptive template to choose to use those "standard" methods and instruments, but leaves innovators free to find new ways to achieve the same outcome.

What level of guidance material, if any, should be available to ensure stakeholders have sufficient understanding of the policy objectives and outcomes being sought?

Level of guidance material
The regulations should be comprehensible on their own. How much guidance material surrounds those regulations depends on the particular measurement and the state of the industry around it. Naturally, within industries where NMI's routine inspection/policing program identifies higher rates of non-compliance, more resources should be directed to bringing non-compliance rates into line with the rest of industry.

What should be the legislative status of such guidance material?

Source of guidance material
We disagree with the recent trend of government taking over and mandating Codes of Practice. It is another form of prescription. The courts are capable of handling problems arising from breaking the law, even if that law is written in terms of required outcomes. Workplace Health and Safety laws have been largely outcomes-based for a very long time and the courts have demonstrated ability to enforce that law. The way the NMI and the associated legal environment can most practically help, in our opinion, is by directing more resources to direct communication with stakeholders - providing channels to connect them with their areas of interest/work so that they can be better informed of their rights and responsibilities. This assists the court process by ensuring people are more informed to begin with (thus keeping them out of court) and empowering them to make better choices (which also keeps them out of court).

Risk-based approach to compliance monitoring

What are the appropriate factors to inform risk management related to setting priorities for regulation of legal metrology, including compliance and enforcement activity?

Factors to inform risk management
The regulations will achieve very little without enforcement regimes that create the belief amongst stakeholders that if they intentionally cheat they are likely to be caught and the penalties are a sufficient deterrent. This implies more than just a sufficient monitoring and enforcement system, but also an effective communication system (including reporting on monitoring and enforcement) to give all parties (both sides of a transaction) confidence that the system is being adequately monitored. The system as outlined in the discussion paper seems to be going down the right track.

Regulatory approaches for legal metrology - Fit for purpose

How important is it that NMI considers the broader context of 'fit-for-purpose' when developing requirements/policies in relation to measurement?

Please select one item
Not important
Ticked Somewhat important
Highly important
Unsure
Further comments
Is not monitoring and enforcement of "fitness for purpose" the role of the ACCC? We are not in support of duplication/overlap of legislation of roles here. At first blush, we see Legal Metrology as an expert subcategory of the broader concept of "fitness for purpose". With that in mind, it makes more sense for the NMI to act in an expert advisory capacity to the ACCC concerning technical performance of instruments or service providers regarding claims under consumer protection law concerning "fitness for purpose".

How should NMI focus its regulatory activity in relation to conformity to type assessment?

Focus of regulatory activity in relation to conformity
Much like the way it monitors existing legal measurements, we see the NMI being "on the lookout" for new/changing transactions or areas of commerce that would benefit from regulation, monitoring and oversight. By "benefit", we mean there is significant evidence of ignorance or intent leading to fraud/misrepresentation of technical measures that have a material economic impact. The same principle applies to type assessment. Where there is an industry presently not under a regulatory type-assessment regime and there is significant evidence that significant adverse economic impact is occurring due to inadequate designs of equipment then that industry should be considered for inclusion in a conformity assessment regime. There should also be a mechanism for sunsetting/unwinding type assessment regimes after a period of time should an appropriate assessment determine that the system is no longer necessary for various reasons.

Regulatory approaches for legal metrology - Compliance and enforcement

How should NMI focus its compliance activities to ensure businesses are meeting their obligations under trade measurement law?

Comments-NMI focus of compliance activities
We are in broad agreement with the approach described in the discussion paper. However, we'd add that there ought to be a regular audit/review process where the industry/community is surveyed for feedback to ascertain the level of awareness of NMI's monitoring and enforcement activities (and their attitudes about the present regime) as a useful gauge of what the appropriate levels of resources are to commit to monitoring and enforcement.

What relative weight should NMI give to: identifying that certain thresholds have been breached; and individual risk assessments, before financial penalties are imposed?

Comments-relative weight
No comment.

What are the appropriate circumstances for NMI to consider referral for prosecution as a regulatory response?

Appropriate circumstances for prosecution
No comment (the present regime seems to work reasonably well). We would, however, point out an area which NMI is currently overlooking - fuel quality. Our industry (automotive LPG) remains in the middle of an ongoing (multi-year) situation of regularly contaminated LPG. NMI presently does quite a good job of ensuring that consumers are receiving the correct VOLUME of fuel, but are exercising little to no oversight as to the QUALITY of that precise volume of fuel. Measurement (via various scientific tests and measurements) is absolutely fundamental to ensuring fuel quality. NMI already conducts extensive testing of other products for quality (such as foodstuffs), but is conspicuously absent from the subject of fuel quality. Our role in industry means that we can pinpoint the exact location of contaminated LPG within a few days of it being delivered to a service station. We stand ready to assist the NMI to commence monitoring and enforcement activities in this space.