This audit assessed the effectiveness of the Australian Radiation Protection and Nuclear Safety Agency's management of the regulation of Commonwealth nuclear, radiation facilities and sources, including its compliance with its legislative requirements.
Radiation and nuclear technologies have diverse applications in the government, commercial, health and research sectors, including x‑ray scanning for security purposes, the use of lasers for scientific research and the production of radioactive substances at Lucas Heights. While the risks to human health and the environment posed by such technologies have long been recognised, they can be effectively managed through the appropriate use and care of equipment and materials by operators and the application of an effective regulatory framework. Australian Government entities’ use of radiation and nuclear technologies is regulated by the Australian Radiation Protection and Nuclear Safety Agency (ARPANSA), while state and territory based regulators are responsible for administering radiation protection legislation in their jurisdictions, covering operators such as hospitals, universities and industry.
ARPANSA has been generally effective in managing key aspects of the regulatory framework applying to the possession and use of radiation and nuclear sources and facilities by Australian Government entities. ARPANSA has developed and implemented procedures for licensing and monitoring regulated entities, supported by a suite of guidance materials for staff and regulated entities. ARPANSA also continues to develop and apply a risk‑based approach to regulation which, if further expanded to the assessment of licence applications and its inspection program, could improve the focus and cost‑effectiveness of its administration. However, shortcomings identified in an earlier (2005) ANAO performance audit, relating to the management of potential conflicts of interest and the application of cost‑recovery arrangements, have not been fully addressed and have detracted from ARPANSA’s overall performance in administering the regulatory framework.
To support the administration of its licensing responsibilities under the framework, ARPANSA has, since 2005, published a range of guidance materials, forms, and assessment templates that align with the relevant legislative requirements. The ANAO’s analysis of a sample of licence applications indicated that licensing decisions were, with one exception, supported by an appropriate level of evidence. There has also been a significant improvement in the average time taken to assess applications for source licences, from 153 days in 2007–08 to 42 days in 2012–13. However, the licence assessment process could be further improved by providing clear advice to applicants on ARPANSA’s expectations relating to supporting information, to avoid repeated ARPANSA requests for additional information and often lengthy delays in the application assessment process. There is also scope for ARPANSA to extend its risk‑based regulatory approach to the licence assessment process, to enable staff to focus on the hazard of each source or facility and the applicant’s compliance history. Further development of the risk‑based approach would help streamline the licensing process, better target available resources and reduce the regulatory impost on applicants.
ARPANSA’s approach to monitoring entities’ compliance with regulatory requirements focuses on regular entity reporting and a periodic schedule of inspections, including unannounced inspections. Since 2005, ARPANSA has established procedures for monitoring entities’ compliance with their reporting requirements and assessment of entities’ reports, addressing a shortcoming identified in the ANAO’s earlier audit. Further, between 2008–09 and 2012–13, ARPANSA has mostly met its target of 60 planned inspections per year, and the inspections observed by the ANAO largely followed the documented procedures.
To address identified non‑compliance, ARPANSA applies a graded approach, which requires entities to report on corrective action undertaken to remediate breaches, and which may trigger additional inspections in the event of identified non‑compliance. However, aspects of the inspection process, particularly unannounced inspections, are largely driven by geographical convenience rather than risk, and ARPANSA’s risk‑based approach should also be extended to this aspect of its operations.
The ANAO observed in 2005 that ARPANSA’s legislated functions, including its role as both a regulator and a licence holder, create scope for potential conflicts of interest. While ARPANSA continues to exercise functions which may give rise to such conflicts, only recently, in 2011, did it formally enter into an arrangement for an outside body to undertake independent inspections of its compliance with its own licence conditions. To date however, only one external inspection has been conducted, and an ongoing program of independent reviews would strengthen confidence in ARPANSA’s arrangements for managing potential conflicts of interest and its compliance with licence conditions. ARPANSA has also released a Chief Executive Instruction (CEI) to provide guidance to staff in managing their self‑regulatory role and when providing scientific and advisory services, including those on a fee‑for‑service basis, to regulated agencies—aspects of ARPANSA’s work which can also give rise to conflicts of interest. However, there is no evidence that the CEI is actively implemented or monitored, nor is any training provided for staff on conflicts of interest issues. ARPANSA should strengthen its approach to managing conflicts of interest, assisted by its Audit and Risk Committee.
While ARPANSA’s cost‑recovery arrangements have evolved since 2005, several aspects remain inconsistent with better practice. Since 2008–09 ARPANSA has under‑recovered its regulatory expenses by almost $4 million, and has used revenues from its scientific and advisory services functions to cross‑subsidise its regulatory function. Further, ARPANSA’s calculations indicate that there is cross‑subsidisation occurring between licence holders. While intra‑government charging is excluded from the Australian Government Cost Recovery Guidelines (the Guidelines), ARPANSA has informed stakeholders that it has adopted the Guidelines as a basis for implementing a better practice approach to cost recovery, which includes the avoidance of cross‑subsidisation between business activities. In the course of the audit, ARPANSA initiated a review of its cost recovery arrangements to better align them with the Guidelines.
The ANAO’s 2005 performance audit of ARPANSA’s regulatory function made 19 recommendations. Between 2005 and 2007 there was limited work to implement the recommendations, with significant delays experienced. Despite several assessments of progress in recent years and regular monitoring by ARPANSA management and the Audit and Risk Committee, in the course of this audit the ANAO assessed that only 11 recommendations have been adequately implemented, with six partially implemented. By not implementing agreed recommendations in a timely manner, ARPANSA has foregone opportunities to enhance its performance.
The ANAO has made four recommendations aimed at strengthening ARPANSA’s management of potential conflicts of interest and expanding the risk‑based approach to regulation.