Consistency and certainty in measurement supports fair and open competition. It provides a level playing field for business by ensuring that all market participants, irrespective of their size or financial strength, follow the same rules and have equal opportunity to compete.
Studies in Australia, the USA and Canada have estimated that the total value of trade transactions involving measurement (including packaged goods and utility metering) accounts for at least 50% of Gross National Income (GNI). Of this amount, around a quarter is accounted for by retail transactions. The remaining three quarters are business to business transactions.
Based on these estimates, more than $750 billion worth of goods and utilities are traded each year in Australia on the basis of their measurement. Reliable representations of measurements help consumers and businesses make informed purchasing decisions. More broadly, they support the efficient operation of the market.
Confidence in accurate measurement also delivers:
- reduced disputation and lower transactions costs in commercial dealings
- a sound evidential basis for legal and regulatory measurements
Australia’s legal metrology system provides a reliable framework to support confidence in accurate measurement. The system includes elements that ensure:
- measuring instruments are fit for purpose
- measurements are made correctly
- representations about measurements are accurate
The system is also underpinned by the necessary scientific and technical infrastructure to support correct measurements (traceability).
The National Measurement Institute (NMI), a division of the Australian Government Department of Industry, Innovation and Science, is responsible for the regulation of Australia’s legal metrology system.
In planning and undertaking its regulatory responsibilities, NMI recognises that reducing the burden on industry of inefficient regulation can lower costs to businesses and facilitate innovation. We also note the importance of ensuring that the regulatory environment strikes the right balance between efficient markets and community expectations.
NMI participates in formal processes that develop international documentary standards for measuring instruments and adopts relevant international standards to support market efficiency and to ensure Australia’s regulatory environment is harmonised with international best practise.
In order to maintain delivery of best practice regulation, NMI recognises that as an organisation it must adapt, be proactive and innovative as we work with stakeholders to find new approaches in a changing environment.
Regulation of legal metrology
A measuring instrument is being used for trade if it is used in determining the consideration in respect of a transaction or in determining the amount of a tax. In Australia, all measuring instruments used for trade must be pattern-approved and verified.
Pattern approval confirms that a measuring instrument’s design meets relevant documentary standards and performs as intended over a range of environmental and operating conditions. NMI examines trade and other legal measuring instruments against relevant standards and issues certificates for pattern approval that are internationally recognised. NMI may also appoint Approving Authorities to examine measuring instruments and produce test reports for pattern approval.
When reviewing applications for pattern approval of trade measuring instruments where certification has already been issued in another country, NMI recognises test reports issued in accordance with the International Organisation for Legal Metrology’s framework for mutual acceptance arrangements and can also accept certain other test results based on a risk analysis.
Verification is the testing of measuring instruments to ensure that they operate in accordance with pattern approval requirements and are accurate. Verification of trade measuring instruments is usually carried out by NMI appointed organisations, known as Servicing Licensees or Utility Meter Verifiers. These organisations verify instruments against standards that are aligned with international practice, including National Instrument Test Procedures (NITPs) determined by NMI.
Traceability is being able to demonstrate that a measurement result is related to a primary measurement standard through a documented, unbroken chain of calibrations. To ensure traceability of reference standards used for verification of trade measuring instruments, NMI appoints Verifying Authorities in areas such as length, mass, area, volume, density, and temperature.
NMI also appoints Certifying Authorities to ensure that certain legal measuring instruments are of an approved pattern and accurate. Certifying Authorities may also be appointed to produce reference materials used in the verification of trade measuring instruments and certification of legal measuring instruments.
NMI has a national network of trade measurement inspectors who audit traders and licensees to assess their regulatory compliance, and take appropriate enforcement action where there have been breaches of the law.