Frequently Asked Questions
In April 2001, Australian, State and Territory industry ministers signed the Australian Industry Participation (AIP) National Framework with the aim of ensuring Australian industry has full, fair and reasonable opportunity to participate in major projects. The EPBS gives expression to this aim at the Australian Government level.
The policy objectives of EPBS are:
- encourage and enhance investment in the establishment of world class operations;
- encourage the involvement of Australian industry in supplying goods and services;
- lower input costs for industry where there are sound reasons for doing so; and
- facilitate Australian industry participation in domestic and international supply chains.
The benefit of the EPBS is that it allows eligible goods to be imported in separate shipments and from multiple locations.
Projects can save on the duty of imported eligible goods for which a concession has been granted.
The application process has two consecutive stages which must gain the delegate's approval before an AusIndustry determination is issued. These stages are:
- the project acceptance application (PAA) stage; and
- the implementation report (IR) stage.
During the PAA stage the applicant must provide full details of the project including the project's industry sector, the project's total eligible goods expenditure, an AIP plan and an indicative eligible goods list. The delegate must approve a PAA prior to an IR being accepted as lodged.
A complete IR must be lodged before goods are imported in order to establish the earliest date from which a concession can be made. The IR should detail:
- evidence of the overall progress of the AIP plan; and
- sufficient detail on eligible goods to be imported in order to allow an AusIndustry determination to be written.
Evidence is required to demonstrate that the proposed eligible goods fall within those permitted under the EPBS guidelines. If the delegate rejects an eligible goods list first submitted in the IR, the entire IR may also be rejected and will need to be resubmitted. In this case the earliest date a concession could be granted will only be established upon resubmission of a complete IR with a revised eligible goods list if it is subsequently approved.
No. A PAA must be approved by the AusIndustry delegate before an IR can be lodged.
EPBS operates on a prospective basis. It is important to lodge a PAA with AusIndustry early enough to demonstrate major procurement has not commenced, and to demonstrate how Australian industry will be provided with full, fair, and reasonable opportunity to participate in all aspects of the project.
An IR must be lodged before importation of eligible goods for which a concession will be claimed. IRs lodged after eligible goods have been imported will be deemed to be retrospective and will be refused concessional entry.
AusIndustry Customer Service Managers can provide advice on the development of applications. Applicants will be directed to a Customer Service Manager in the relevant state depending on the location of the project or project/procurement management. A Customer Service Manager will work with you from the initial inquiry through to completion of the project, including follow up compliance checks if required. EPBS is delivered in each AusIndustry state and territory office.
A Customer Service Manager can provide comment on draft application forms.
AusIndustry offices can be found at www.ausindustry.gov.au.
To qualify for an EPBS concession, projects must meet the following criterion:
- be in an eligible industry;
- have a total eligible goods expenditure of $A10 million or more on locally available and imported eligible goods;
- lodge a PAA, including AIP plans, at the very early stages of the project and prior to approaching the market for provision of goods and services. Preferably this should be at the design and engineering stage of the project;
- demonstrate eligible goods will be integral to the project once operational;
- provide evidence that the eligible goods for which a concession is sought are not produced in Australia or are technologically more advanced, more efficient or more productive than goods currently available from Australian production; and
- successfully implement an approved AIP plan.
Yes. The life of an EPBS project is defined as being until the project is commissioned. The commissioning date should be identified in the PAA and confirmed in the IR.
Yes. However, you need to request this with a formal letter to the delegate. The letter should outline the reasons and justification for this request. Evidence should also be provided where possible.
The total project expenditure requirement for EPBS projects must be $A10 million or more on all eligible goods for the project. This includes both eligible goods for which a concession will be sought and eligible goods which are locally made. The building costs, site preparation costs, and purchase of ineligible goods are not considered in meeting the eligibility threshold required for EPBS.
An EPBS project must be in one of the following industries:
- resource processing;
- food processing;
- food packaging;
- gas supply;
- power supply; and
- water supply.
Only eligible goods for use in projects in these industries are eligible for an EPBS duty concession.
Transport and infrastructure projects that simply service an eligible industry are not eligible for an EPBS concession.
An upgrade project in an eligible industry is eligible only where the primary purpose is to provide additional capacity, capability or efficiency to existing facilities which undertake eligible activities. Only the components of a functional unit being imported for an upgrade will be eligible for a duty concession. Ongoing maintenance and refurbishment projects, where the primary purpose is to maintain or restore existing capacity, are excluded from EPBS
Goods must be deemed eligible in order to qualify for an EPBS duty concession. Eligible goods are those goods procured for and that are integral to the project once it becomes operational. Eligible goods must be in place or immediately available on site at the time the project is commissioned. Eligible goods include both locally produced and overseas made goods, and must fall within one of the following categories:
- EPBS Functional Units consisting of one or more pieces of machinery, equipment or their components that are integrally connected to perform a discrete function;
- components of Australian produced or duty-free functional units;
- procurement or equipment packages, which consist of a quantity of the same type of machinery, equipment or their components to be used across the project (compressors, pumps, valves, electrical equipment, tanks, etc)
- pipes, pipelines, conveyors, power transmission lines, flexible flow lines, etc integral to the project and used to convey gas, liquids, minerals, electricity or other materials or goods;
- articles auxiliary to and designed to be permanently attached to the goods identified in points 1 to 4 above, such as pylons, supporting structures, staircases, ladders, railings etc; or
- stainless steel materials to be directly incorporated into the goods identified in 1 to 5 above.
Goods ancillary to the project, including office equipment, buildings, office/personnel accommodation and goods used in activities such as land preparation, road construction and maintenance, transportation (other than that listed in point 4 above) and the provision of telecommunications and other general services are ineligible. Materials, consumables and construction and servicing equipment, including all fuels, oils, lubricants, adhesives, filters, protective garments, tools, ladders (other than those specified in point 5 above), paint, varnish and the like are ineligible under EPBS, as are spare parts used for on-going maintenance beyond the commissioning of the project.
Applicants are required to submit an indicative eligible goods list as part of their PAA. Approval of a PAA should not be taken as approval of an eligible goods list.
Applicants are strongly encouraged to seek delegate approval of their eligible goods list prior to collecting evidence on their non-availability from Australian production and before lodging their IR. This is to avoid the risk of the delegate rejecting an item or items on the eligible goods list during the IR assessment which may delay the earliest date an EPBS determination could be made.
It is a mandatory requirement for project valued greater than $2 billion to seek early approval of eligible goods 6 months prior to the lodgement of an implementation report for which a concession is being sought for those goods.
An AIP plan is an important part of the EPBS and forms an essential part of the PAA and IR. The AIP plan supports the principles of the Australian Industry Participation National Framework. The AIP plan must demonstrate how a project proponent will provide full, fair and reasonable opportunity to Australian industry to supply goods and services to the project, and how they will endeavour to maximise opportunities for Australian industry to participate in all aspects of the project.
The AIP plan does not mandate local content requirements but requires applicants to demonstrate how they will provide full, fair and reasonable opportunity for Australian industry to participate in all aspects of their project.
Further information on developing and implementing an AIP plan is available at www.ausindustry.gov.au.
The terms full, fair and reasonable mean:
- Full: Australian industry has the same opportunity afforded to other global supply chain partners to participate in all aspects of an investment project (for example design, engineering, project management, professional services, and IT architecture).
- Fair: Australian industry is provided the same opportunity as global suppliers to compete on investment projects on an equal and transparent basis, including being given reasonable time in which to tender.
- Reasonable: Tenders are free from non-market burdens that might rule out Australian industry and are structured in such a way as to provide Australian industries the opportunity to participate in investment projects.
An AIP plan is a requirement of the PAA. A PAA should be completed and lodged with AusIndustry at the very early stages of a project. This must be prior to approaching the market for provision of goods and services, and preferably at the design and engineering stage of the project. When a PAA is approved this provides approval of the AIP plan.
Following implementation of an approved AIP plan, applicants must show evidence that the actions outlined in the approved AIP plan were carried out as described. The IR should report against the actions and activities approved in the AIP plan and show how full, fair and reasonable opportunity has been given to Australian producers to be involved across all aspects of the project.
The AIP plan criteria are in many cases similar to those covered in local industry participation plans required by some state governments. In some instances the requirements from one jurisdiction may exceed those of another. In such instances applicants should address the most comprehensive level of detail needed. This will ensure that the requirements of other programs are also covered.
The EPBS allows for the submission of local industry participation plans in lieu of an AIP plan specifically prepared for EPBS. If a local industry participation plan is submitted it must adequately address each criterion expected of an EPBS AIP plan, and provide a summary of actions addressing each EPBS AIP plan criterion as set out in the EPBS PAA and IR forms.
More detailed information on AIP plans can be found in the Australian Industry Participation Plan Guide for the Enhanced Project By-law Scheme at www.ausindustry.gov.au.
In addition to the existing EPBS requirements you will be required to:
- publish an executive summary of your AIP Plan;
- provide a breakdown of the anticipated local content in your project; and
- provide details on the goods and services for which companies can compete.
If your project has a value of $2 billion or over you will also be required to:
- provide evidence of how your AIP plan will cascade to tier one (EPCM) companies;
- incorporate information on prequalification into publically listed opportunities; and
- participate in regular reporting (6 monthly) on AIP actions and contracts awarded.
No. There will be a template to help you write your executive summary but you will be able to decide what goes into it. It is not expected that the published AIP Plan executive summary should include commercial in confidence information
Greater detail will be required regarding how the AIP Plan has been implemented at the tier 1 In particular projects over $2 billion in value will be required to report on a 6 monthly basis on:
- activities taken to implement the AIP Plan;
- contracts awarded in the last reporting period and where Australian companies were not successful why;
- information on Australian Industry capability gaps; and
- a summary of forthcoming major contracts.
Where EPBS applicants are making regular reports to State Governments covering similar issues AusIndustry will endeavour to work with the State Governments to align our processes to avoid duplication.
The PAA application form will ask you to give your overall project value. There may be a requirement to verify that value by reference to publically available announcements of the value of the project.
On 6 October 2011 the Prime Minister made an announcement at the Jobs Forum about the extension of AIP measures for projects accessing Federal Government assistance.
In line with the Prime Minister's AIP commitment these measures apply to projects accessing an EPBS concession.
On the 11 April 2012, following stakeholder consultation through a Working Group appointed by the Government, the Minister for Industry and Innovation, the Hon Greg Combet announced that the changes would commence on the 1 July 2012.
New applications submitted from 1 July 2012 will be managed under the new arrangements.
All EPBS projects submitted from the time of announcement of the EPBS changes on 11 April 2012 will be administered under the revised EPBS guidelines and be subject to comply with the new AIP plan requirements.
These projects will at a minimum be required to produce and publish an executive summary of their AIP Plan. In addition AIP Plans may require some restructuring in order to meet the new AIP plan requirements. Customer Service Managers will be available to assist with this transition.
Applicants who have lodged and had approved a Project Acceptance Application between the April 2012 announcement and 1 July 2012 implementation will also be required to comply with the new arrangements when they come into force. AusIndustry will inform these applicants in writing that the new arrangements will apply to their application.
Applicants who have had a Project Acceptance Application approved before the April 2012 announcement, but have not submitted or had approved their first IR by 1 July 2012 may also be subject to the new program requirements. The Program Delegate will consider projects that cannot meet the new requirements on a case by case basis.
Applicants who have submitted their first IR before 1 July will not be required to meet the new program requirements and will continue to be managed under the guidelines which were applicable at the time of approval.
Transitional arrangements will be in place for those EPBS applicants who have Project Acceptance Application approval before 1 July 2012 but at that time have not submitted their first Implementation Report. Applicants will have 3 months, to 1 October 2012, to amend their Australian Industry Participation Plan and ensure full compliance with the new arrangements. AusIndustry Customer Service Managers will help EPBS applicants through this process.
If an applicant believes they cannot comply with the new requirements then the AusIndustry Delegate will consider their case.
The changes to the EPBS will be implemented in line with the other AIP measures, on 1 July 2012.
Stakeholder consultation on these program changes was conducted as part of the AIP Working Group consultation process. A discussion document was made available in late 2011 and a wide range of responses were received.
A functional unit may consist of one or more pieces of machinery, equipment or their components that:
- are integrally connected to perform a discrete function (for example, cutting, separating etc. in a chain of operations, or a single transformation process);
- are collectively recognised as a distinct item of capital equipment according to current industry engineering and procurement practice; and
- ensure a balanced outcome in terms of EPBS policy objectives (that is, represent a fair and practical approach for both project proponents and Australian producers).
While integration is a necessary pre-requisite for an EPBS Functional Unit, the degree of integration will not be determinative.
A plant or project delivered under a single "turnkey" contract would not normally be considered as a single functional unit. It is not intended that whole projects or complete plant encompassing several items of capital equipment which together perform multiple functions would be considered as a functional unit for EPBS purposes. These would not be regarded as delivering a balanced outcome for EPBS policy objectives.
Peripheral items to a process or function preformed by the EPBS Functional Unit (e.g. fittings, conveyors or pipelines connecting functional units to each other or to other parts of the project, or auxiliary articles such as support structures) will not be considered to be part of the EPBS Functional Unit and will be assessed in their own right.
Yes. Previous decisions made on functional units under the old EPBS Policy and Administrative Guidelines may be used as guidance but will not necessarily be regarded as precedence.
Because every project is different, EPBS Functional Units for each project will be assessed case by case.
More detailed information on EPBS Functional Units can be found in the Functional Unit Guide for the Enhanced Project By-law Scheme at www.ausindustry.gov.au.
The eligibility of a functional unit will be determined by an AusIndustry delegate. A functional unit will be assessed as performing a discrete function. Other considerations in determining eligibility of a functional unit include:
- the continuity of the process performed by the functional unit;
- how the equipment will be procured by the project constructors;
- how it is procured by other project constructors in the industry both in Australia and overseas;
- the size and type of the project (including whether it is an upgrade project) and functional unit; and
- reference to the Functional Unit Guide for the Enhanced Project By-law Scheme, read in conjunction with the EPBS Policy and Administrative Guidelines.
In order to establish eligibility of a functional unit, three forms of evidence are accepted:
- advice from the ICN;
- advice from an independent technical expert, such as a professional engineer, at arm's length from the project and not usually employed by the applicant company; and
- reference to the Functional Unit Guide for the Enhanced Project By-law Scheme, read in conjunction with the EPBS Policy and Administrative Guidelines.
Customers are encouraged to use the ICN in their state or territory to assist in procurement. The ICN will be able to provide evidence demonstrating eligibility of goods for EPBS (including that functional units claimed meet standard industry practice) and one of three forms of evidence to demonstrate non availability from Australian production.
Consulting the ICN is encouraged to demonstrate that a bona fide effort has been made to source eligible goods from an Australian supplier. The national body, the Industry Capability Network Limited, maintains an extensive database of Australian industry capability which the state ICNs can access to report on eligibility of goods for EPBS and non-availability from Australian production.
Upon approval of an IR an AusIndustry determination allows concessional entry for eligible goods to be imported if:
- no equivalent goods are produced in Australia in the ordinary course of business; or
- the eligible goods are technologically more advanced, more efficient or more productive than the goods currently available from Australian production.
Applicants must nominate all equivalent goods currently available from Australian production, and submit an independent written technical assessment. The assessment must be carried out by a suitably qualified engineer, or other suitably qualified person, at arm's length from the project. The assessment report must demonstrate to the AusIndustry delegate's satisfaction the degree to which the imported goods are technologically more advanced, more efficient or more productive than goods currently available from Australian production of similar age and condition.
A suggested template for independent technical expert's advice is available on the AusIndustry website or from your state office Customer Service Manager.
Non-availability from Australian production is restricted to equivalent goods not produced in Australia in the ordinary course of business.
Applicants must demonstrate goods are not available from Australian production in the ordinary course of business, using one of the following forms of evidence:
- statements from an ICN office to the effect that there is no Australian producer, or capability of producing equivalent goods for the applicant's project exists; or
- a Tariff Concession Order (TCO) covering the eligible goods that has been made under Part XVA of the Customs Act, and that is still in force when a complete IR for those goods is lodged with AusIndustry; or
- methods which must involve genuine consultation with potential manufacturers of eligible goods and industry associations. A detailed report on the outcome of such consultations must be provided to AusIndustry. The consultations and report must be undertaken by a suitably qualified professional engineer (or similar) who is at arm's length from the project, demonstrating to the AusIndustry delegate's satisfaction that equivalent goods are not produced in Australia.
Not necessarily. Functional unit definitions vary between the Tariff Concession System and the EPBS. A TCO must meet the requirements of both the Tariff Concession System and the EPBS to be acceptable as evidence of non-availability of Australian production. Talk to your Customer Service Manager for further advice.
You may request an internal review of a delegate's decision. This request must be accompanied by reasons why you want the relevant decision to be reversed and address the reasons given for initial refusal. Requests to review a decision must be made to AusIndustry within 28 days of the date of the decision and an internal review is undertaken by a delegate other than the delegate who made this decision. Any internal review will be made on the basis of the information originally submitted to the delegate, and except where AusIndustry determines that extraordinary circumstances apply, decisions will only be reviewed once. With the exception of any points of clarification that the delegate may request, no additional information will be considered during the review.
You should also note that you are entitled to seek judicial review of decisions regarding determinations for the EPBS. Such decisions are subject to judicial review by the Federal Court under the Administrative Decisions (Judicial Review) Act 1977. You should seek your own legal advice in this regard.
Yes. Customers should advise AusIndustry of major changes to information provided in the project acceptance application, including the AIP Plan. Early contact with a Customer Service Manager is advisable to ensure the project is still eligible for a concession. You may be required to seek a formal variation in which you must make a case as to why the change is necessary. The delegate will decide whether to approve a variation on the basis of the changes continuing to achieve or exceed the original outcomes anticipated.
If the delegate approves your application, they will issue one or more AusIndustry determinations to permit the concessional entry of eligible goods under the EPBS by section 273 of the Customs Act 1901 and item 71 of the Customer Tariff Act 1995 for nominated importers.
The wording of the AusIndustry determination in respect of eligible goods will match the description used in the advice by the applicant that the eligible goods are not available from Australian production. The determination will cover the goods to be imported and listed in that advice. Applicants need to ensure that the advice provided is appropriate for the concession sought. Evidence of non-availability from Australian producers must be at the appropriate level to match the goods to be imported.
Concessions are available for eligible goods used in the project whether imported by the project proponent or a third party supplier. Concessional instruments are issued to the project proponent who is responsible for arrangements to claim the concession.
Importers using an EPBS duty concession must comply with normal Australian Customs and Border Protection Service requirements and other requirements such as quarantine.
Applicants must ensure goods, imported using an EPBS concession are eligible. For example, applicants must verify the goods are dutiable at a substantive rate at the time of lodging an application for a concession and when entering the goods for home consumption. To monitor compliance, imports may be subject to the Australian Customs and Border Protection Service's post-benefit audits and customers must therefore retain all documents relating to the goods for up to 5 years.
Information on the Australian Customs and Border Protection Service related matters can be obtained by contracting the Australian Customs and Border Protection Service information centre on 1300 363 263 in Australia; +61 26275 6666 from outside Australia; or by visiting the Australian Customs and Boarder Protection Service at www.customs.gov.au.
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