MATTER OF OPINION

Not the ‘Best Start’ … for some

National has opened 2014 strongly with a substantive education policy announcement that even its more entrenched critics declared to be 'a good thing'.  At the same time, trespassing on Labour's traditional turf, National delivered up at least the prospect of rewarding a traditionally undervalued profession – or at least the high performers among them.  This, together with not-so-subtle reminders about the Government's and New Zealand's relative performance over the years since the Global Financial Crisis sees National on the front foot so far.  Love 'em or hate 'em, it was a confident entry into the election year lists.

Not so much for Labour.  Having only just affirmed its role as the leading party in any future administration and one to which the Greens would be an adjunct, the Party gave an over-hasty tick to the Greens' education policy.  As well as giving the appearance of giving ground to the Greens on a core area of policy, it was clear that Labour's strategists had given little if any thought to the substance of what was actually proposed.  With schools being converted into all-purpose community hubs, conflicting objectives and a lack of clarity about the role of principals and boards relative to the proposed 'service coordinators' the prospect of a mare's nest looms large, unpopular with parents and teachers to boot.  It was an offering from which Labour should have run a mile.

On the upside, the Labour leader was able to start the year by dumping the twin albatrosses represented by the proposed removal of GST on fruit and veg, and zero taxation on the first $5,000 of personal income.  Questions might still be asked about the analytical wisdom underpinning these policies and the merits of non-regressive tax-relief, but at least Cunliffe could start the year unencumbered by a policy straitjacket conceived in 2011.

This would have been all to the good, if Labour had not immediately found itself having to defend its first homegrown policy offering for 2014 - the baby bonus. 

This policy, and the questions about fiscal responsibility to which it has given rise are an unwelcome distraction for Labour, costing it – for now at least - the opportunity to attack the Government on its widely unpopular "privatisation" initiatives and fiscal policies.  Detracting too from the undeniably worthwhile policy objectives inherent in a 'Best Start' to childhood education and paid parental leave, it has meant that the task of presenting itself as a credible alternative to a National-led administration has become that much harder.

None of this was lost on John Key, whose statement to the House on Tuesday capitalised on questions about the fine print of Labour's policy announcements to contrast his National-led administration with any led by Labour. 'Trustworthy not tricky' is a sound-bite that will stick, as will the assertions that Labour has run true to form with a reliance on money that, according to Key, does not exist.

This became a solid platform for what otherwise would have been a dull restatement of National's four point management plan.  The goal of responsible financial management is a lot more compelling with the spectre of fiscal mismanagement dangled in front of the punters.

It also added zest to the already well telegraphed Government commitment to balancing the books, backing Christchurch and the film industry, enhancing workplace safety, investment in science and education, ultrafast broadband and road construction. 

In retrospect the fact that Cunliffe's state of the nation speech conflicted with the Grammys might have been a good thing for Labour.  The opportunity remains to wrap some policy substance around the vestigial ideas presented before too many questions are asked.  First though, it has to recover from what was far from the best start to Labour's election year.

IN POLITICS

New Year, Big Speeches

The Prime Minister's statement to open the first sitting of the House this year confirmed the policies and projects the Government has already begun, with the goal of stimulating economic growth.  Reflecting on actions undertaken and changes made by the National Government, and criticising the Opposition's spending intentions, the Prime Minister pledged to maintain the trust and confidence of the electorate by ensuring all details on policy and on spending were communicated to the public in full, and by maintaining a "walk the walk" instead of "talk the talk" stance to seeing policy through. 

The Government's policy agenda is centred on four priorities:

  • responsible management of Government finances;
  • building a more competitive and productive economy;
  • delivering better public services within tight budgets; and
  • supporting the Christchurch rebuild.

The economic agenda involves balancing the Government's books and keeping a growth rate of 3.5%, in the hope that 2014/15 would see a Budget surplus and the debt-to-GDP rate forecast for 2020 reduced from 60% to 17%.  Borrowing would still be at a net $78 million per week, and asset sales proceeds would be put into the Future Investment Fund.  The focus would be baseline rather than marginal capital expenditure, and a broad-base low-rate tax system would continue to be supported (though without a capital gains tax).  There would be legislative reform this year to stimulate capital markets by deterring cartel behaviour, strengthening the company registration system, targeting consumer credit vulnerabilities, and increasing accounting and audit industry efficiency.

Economic growth would also involve committing to the Business Growth Agenda in part by stimulating exports.  This would encompass concluding international trade arrangements, including the Trans-Pacific Partnership Agreement, and the Russian, Indian and Korean Customs Unions, and revising the current Customs regime to make processes more user-friendly. 

The Government plans to invest $750 million in oil and gas exploration in 2014 and $2.5 billion over the next three years, with an aim of completing another block offer round in 2014.  It also aims to encourage growth in the film industry.  Investment in research and innovation is planned to reach $1.36 billion in 2013/14.  The Government would continue to work with the Callaghan Institute and administer R&D grants totalling $566 million over four years.  Primary Growth Partnership funding up to $700 million would be accompanied by tertiary education-led research funding up to $300 million by 2016.

The economy would benefit from the continued use of asset sales proceeds to fund infrastructure developments, including rolling out ultra-fast broadband, building the Transmission Gully road, beginning the Christchurch Western Corridor and the Waikato Expressway, continuing with the Christchurch rebuild, and accelerating publicly funded housing projects elsewhere.  In Christchurch, focus would remain on the Justice and Emergency Services Precinct and on the DHB's hospitals.  115 Christchurch schools would also receive $1 billion over the next 10 years, and the university would receive $260 million.

In the education and skills sector, the Government proposes to invest in rewarding high performance by teachers and principals in the hope of encouraging higher quality education in schools.  It aims to create more spaces at skills academies, pledging to have 55% of 25 to 30 year olds with advanced diplomas or degrees by 2017.  It also aims to eliminate learning fees for 16 to 19 year olds at trade and service academies.  It would keep national education standards and the system of moderation amongst schools.

In terms of social security, the Government aims to implement policies aimed at reducing welfare dependency and lowering the unemployment rate.  It plans on using asset sales proceeds (instead of capital gains taxation) to subsidise social security spending.  Improving housing accessibility would involve the release of new land, the refinement of Resource Management Act 1991, and the enforcement of Council accords.  On the health agenda, the Government plans to increase accessibility to elective surgery and to life-saving treatments, and to combat the use of methamphetamine.

The Leader of the Opposition responded with a statement predicated on Labour's undertaking to change the direction of government policy with the aim of taking the country forward to a new future of fairness, equality and opportunity.  The Government's stance was criticised as being visionless and defenceless, creating a "trickle up" situation, and not doing enough to return the economy to a state of surplus. 

Other attacks on Government policy and action to date included insufficient funding to assist the most vulnerable, including disabled children and students of the lowest decile schools.  The Government's education policy of rewarding high-performance teachers and principals was undercut as a futile attempt at gaining public sympathy and in reality favouring elite private schools and not providing for all in equal measure. 

The Government was also criticised as having favoured the growth of major businesses (such as supermarket chains) over ordinary New Zealanders, and having favoured power companies' profit margins over the provision of heating to the most vulnerable.  Asset sales were criticised as having subsidised stockbrokers more than any social welfare schemes, and as having detracted from the stimulus needed for the manufacture and sale of New Zealand value-added goods.  Further criticisms focussed on a tax policy that was said to favour the few, already advantaged, and to penalise the bulk of ordinary New Zealanders.  The Government was also criticised as having turned its back on the Pike River families and the recently deceased forestry workers.  The Government's trade deals were also attacked as being kept secret unjustifiably. 

The Opposition's strategy centres on a joined-up policy package to rebuild and rebalance, which includes an economic agenda of lowering the dollar value (estimated at 15% over-valued), and introducing a capital gains tax.  It also includes freeing up $1.5 billion by dropping "untargeted policies".  Labour also plans to assist primary industries and to ensure exports from New Zealand are value-added, with returns realised in New Zealand.  It promises to reduce taxation on R&D for the most innovative, and to create 59,000 jobs for the next generation.  Labour plans to keep facilities such as broadband and basics such as electricity at a low cost.

In terms of welfare, Labour aims to ensure every New Zealander has an equal opportunity, and that wages and bills combine to make the spending of all New Zealanders fair and proportionate.  It introduced its Best Start plan, which involves giving families earning below $150,000 up to $60 per week for the first year of their child's life.  It pledges to ease the pressure on modest and middle income families by providing the weekly payment up to a child's third birthday, and giving up to 26 weeks' paid parental leave for all who need it.  It also plans to increase free early childhood education to 25 hours per week.

The respective speeches were largely restatements of Key's and Cunliffe's speeches of the past two weeks.  Based on the rhetoric so far, this year's election campaigning is likely to focus on the areas of children and education, and economic stimulation.

IN THE NEWS

Minor Cabinet re-shuffle

On 21 January the Prime Minister announced a minor Cabinet re-shuffle, readying for election year:

  • Hon Peter Dunne has been appointed Minister of Internal Affairs (formerly Hon Chris Tremain), Associate Minister of Health, and Associate Minister of Conservation. As was the case before his resignation, he is a Minister outside of Cabinet.  Dunne's previous Revenue portfolio stays with Hon Todd McClay.
  • Hon Michael Woodhouse will fill the vacancy in Cabinet created by Chris Tremain's retirement as an MP at this year's election.  Woodhouse's responsibilities as Minister of Immigration, Minister of Veterans' Affairs and Associate Minister of Transport remain the same.
  • Hon Paula Bennett has added Local Government (formerly Hon Chris Tremain) to her current portfolios as Minister for Social Development and Associate Minister of Housing.
  • Outside of Cabinet, Hon Peseta Sam Lotu-liga has been given the ministerial position for Pacific Island Affairs and Associate Minister of Local Government. He is the MP for Maungakiekie and was first elected to Parliament in 2008.

The Ministerial List can be found here, and the datasets of Ministers and their portfolios can be found here.

Members of Parliament retiring at 2014 national election

In the past six months a number of MPs have announced their intention to retire at the general election later this year.

From the National Party, seven electoral MPs have indicated that they are leaving the House. These are Chris Tremain (Napier), Kate Wilkinson (Waimakariri), Paul Hutchinson (Hunua), Eric Roy (Invercargill), Phil Heatly (Whangarei) and Shane Ardern (Taranaki-King Country). Also retiring are list MPs Cam Calder and Chris Auchinvole.  Katrina Shanks resigned over the summer and has been replaced by National's new MP Joanne Hayes, who stood unsuccessfully for National in Dunedin South in 2011.

One consequence of Chris Tremain's departure is that Peter Dunne will take up the ministerial portfolio of Internal Affairs.  Bill English will retire from his electoral seat in Clutha-Southland, but will seek re-election as a list MP.

From the Labour Party, only Ross Robertson (Manakau East) has so far expressed an intention to leave the House.  

The Māori Party will lose both its co-leaders this election, with Tariana Turia and Pita Sharples retiring. Chris McKenzie, a former political adviser to the Māori Party, has been selected as the Party's candidate in the Te Tai Hauāuru electorate.  Labour will fight hard to win that seat, and the Tāmaki Makaurau electorate left open by Sharples.  If Labour is successful, that could leave National with only one Māori Party MP to call on.  ACT Party MP John Banks has also announced he will not seek re-election. 

Consultation on the governance of financial products

The Ministry of Business Innovation and Employment is consulting on the second stage of the Financial Markets Conduct Act (FMCA) draft regulations.

The staged process started in October 2013 with the release of the first set of draft regulations for comment.  This covered regulations needed to implement phase one of the FMCA, which comes into force in April 2014.  Stage two of the process is focused on parts four to six of the FMCA.  Submissions for the third and final set of draft regulations are expected to be called for in April 2014.

The consultation process is intended to assist with the core technical detail needed to implement the regulations, and to ensure that the FMCA can achieve its purpose of promoting confident and informed financial markets.

The stage two draft regulations are focused on three areas:

  • regulations needed to support the governance regime for debt securities and managed investment schemes.  This includes default procedures and other content requirements for debt securities and investment schemes;
  • regulations regarding dealing in financial products, including disclosure obligations; and
  • conduct obligations for discretionary investment management services.

A full set of the draft regulations can be found here, with the Ministry's commentary on the regulations and exposure draft here.  These regulations are scheduled to come into force with phase two of the FMCA in December 2014.

Feedback on the regulations closes on 14 March 2014.  More information on the process and the submission form can be found here.

Reserve Bank consulting on LVR restrictions

The Reserve Bank is currently consulting on the operation of its loan-to-value ratio (LVR) restriction scheme.

LVR restrictions were introduced in October 2013 as part of the Reserve Bank's macro-prudential 'toolbox' to deal with financial system risk. The so-called 'speed limit' on home lending requires banks to restrict their new mortgage lending at LVRs of over 80 percent (deposits of less than 20 percent) to no more than 10 percent of the dollar value of all new residential mortgage lending.

Following feedback from banks and the construction industry, the Reserve Bank announced an exemption from the high LVR restrictions for new residential construction, and is now taking submissions on its operation.  The purpose of the exemption is to support the supply of new houses.  The Reserve Bank has released a draft revision of the chapter of the Banking Supervision Handbook (BS19) that sets out the terms of the LVR restriction, including the proposed details of the exemption.  It can be found here.

The Reserve Bank's Deputy Governor has commented that, while high-LVR borrowers made up a relatively small portion of the new-build market, the exemption was expected to support new building and help to moderate house price pressures. No other exemptions are currently being considered.

In formulating the exemption, the Reserve Bank has sought to provide clear boundaries in order to monitor and enforce the exemption effectively, and to provide clarity for banks, industry and households on exactly what is or is not exempt.

The Reserve Bank does not propose to exempt residential mortgage lending for the following purposes:

  • purchasing newly built houses;
  • discretionary expenditure, such as furnishings;
  • where the buyer commits when construction is already underway;
  • remediation and renovation;
  • loans to buy land only; and
  • loans to buy land to move a house onto.

The Reserve Bank is inviting submissions on how the exemption will operate until 14 February. The consultation paper can be found here.

Takeovers Panel issues Guidance on Offer Documents

The Takeovers Panel has issued a Guidance Note on Offer Documents.  The Guidance Note aims to consolidate and update a large amount of previous guidance given by the Panel on selective issues, and includes some guidance on new rules in the Code. More specifically, the Guidance Note provides information on:

  • Offer conditions, including: restrictive conditions; conditions relating to the approval of the offer by the offeror's shareholders; third party finance; waivable offer conditions; and "material adverse change" conditions and unreasonable reliance;
  • Offer terms and consideration, including: scrip offers; variable pricing; payment of consideration; changes to the capital structure of the target company during the offer period; payment of takeover consideration in foreign currency; calculating the specified percentage for a partial takeover offer; broker handling fees; and conditional acceptance facilities;
  • Disclosure requirements under Schedule 1 of the Code, including the offeror's requirement to disclose their intentions for the business activities of the target company; and
  • Other general issues relating to offer documents, including the signing of certificates for offer documents, the requirements for "particulars" in offer documents, and offer acceptance and transfer forms and powers of attorney.

The Panel notes that any examples referred to in the Guidance Note are illustrative only and that the Panel is not bound by its own precedent.

The Takeovers Code came into force on 1 July 2001. It creates a general rule that no person can:

  • Acquire more than 20 per cent of the voting rights in a Code company; or
  • Increase an existing holding of 20 per cent or more of the voting rights in a Code company.

A Code company is a company with 50 or more shareholders and 50 or more share parcels. The Code also outlines various exceptions to the general rule.  

A copy of the Guidance Note can be found here.

PROGRESS OF LEGISLATION

New Bills

Smoke-free Environments (Tobacco Plain Packaging) Amendment Bill

Type of Bill: Government
Member in Charge: Hon Tariana Turia

This Bill amends the plain packaging regime for tobacco products.  The primary aim of the Bill is to go further towards reducing the appeal and social approval of tobacco use, particularly among young people, by imposing stricter controls on the marketing of tobacco products.  The changed regime would limit the use of tobacco trade marks on any non-tobacco article, limit the sale of loose cigarettes and tobacco, further specifying the required labelling and health messages on tobacco products, and increase the maximum penalties for breach to $600,000 (manufacturers, importers and distributors), $200,000 (large retailers), and $50,000 (any other person).

Bills Awaiting First Reading

Building (Earthquake-prone Buildings) Amendment Bill
Education (Breakfast and Lunch Programmes in Schools) Amendment Bill 
Education (Food in Schools) Amendment Bill
Electoral (Adjustment of Thresholds) Amendment Bill 
Electronic Data Safety Bill 
Energy (Fuels, Levies, and References) Amendment Bill 
Healthy Homes Guarantee Bill
Land Transport (Safer Alcohol Limits for Driving) Amendment Bill
New Zealand Superannuation and Retirement Income Amendment Bill
Ngā Rohe Moana o Ngā Hapū o Ngāti Porou Bill 
Smoke-free Environments (Tobacco Plain Packaging) Amendment Bill
SuperGold Health Check Bill
Overseas Investment (Owning our Own Rural Land) Amendment Bill
Underground Coal Mining Safety Bill
Waitangi National Trust Board Amendment Bill 

Bills before Select Committee

Submissions open

Click here to view table.

Submissions closed

Click here to view table.

Bills Awaiting Second reading

Bills that have recently been reported back to the House from a Select Committee are in bold and the Select Committee reports on these Bills are linked.

Border Processing (Trade Single Window and Duties) Bill
Commerce (Cartels and Other Matters) Amendment Bill 
Construction Contracts Amendment Bill 
Defence Amendment Bill 
Electoral Amendment Bill (report of the Justice and Electoral Committee)
Electronic Transactions (Contract Formation) Amendment Bill 
Employment Relations Amendment Bill 
Fisheries (Foreign Charter Vessels and Other Matters) Amendment Bill 
Housing Corporation Amendment Bill
Maungaharuru-Tangitū Hapū Claims Settlement Bill (report of the Māori Affairs Committee)
Ngā Mana Whenua o Tāmaki Makaurau Collective Redress Bill (report of the Māori Affairs Committee)
Ngā Punawai o Te Tokotoru Claims Settlement Bill (report of the Māori Affairs Committee)
Public Health Bill
Radio New Zealand Amendment Bill
Reserves and Other Lands Disposal Bill
Resource Management (Restricted Duration of Certain Discharge and Coastal Permits) Amendment Bill 
Raukawa Claims Settlement Bill (report of the Māori Affairs Committee)
Social Security Amendment Bill (No 3) 
Spending Cap (People's Veto) Bill
Student Loan Scheme Amendment Bill (No 3) 
Sullivan Birth Certificate Bill (report of the Government Administration Committee
Tasman District Council (Validation and Recovery of Certain Rates) Bill 
Taxation (Income-sharing Tax Credit) Bill
Te Tau Ihu Claims Settlement Bill 
Therapeutic Products and Medicines Bill
Victims of Crime Reform Bill

Bills Awaiting Third Reading

Airports (Cost Recovery for Processing of International Travellers) Bill 
Appropriation (2012/13 Financial Review) Bill 
Arts Council of New Zealand Toi Aotearoa Bill
Companies and Limited Partnerships Amendment Bill 
Families Commission Amendment Bill 
Gambling Amendment Bill (No 2)
Heritage New Zealand Pouhere Taonga Bill 
Insolvency Practitioners Bill 
Kaipara District Council (Validation of Rates and Other Matters) Bill
Natural Health and Supplementary Products Bill (formerly the Natural Health Products Bill) 
Subantarctic Islands Marine Reserves Bill 
Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill
Trade (Safeguard Measures) Bill

Acts Assented

Auctioneers Act 2013

This Act was part of the Consumer Law Reform Bill.  It repeals the Auctioneers Act 1928, and provides for a system of registration for auctioneers, including the requirements, the application process, the duration, and offences for practising without having been registered.

 

Carriage of Goods Amendment Act 2013

This Act was part of the Consumer Law Reform Bill.  It amends the Carriage of Goods Act 1979 by increasing the limitation of the amount of a carrier's liability from $1,500 to $2,000.

 

Consumer Guarantees Amendment Act 2013

This Act was part of the Consumer Law Reform Bill.  It amends the Consumer Guarantees Act 1993 by changing the purpose statement to include consumer protection, effective business competition, and confident market participation.  It also makes changes to the delivery of goods, to gas and electricity services, to auctioneers, and to collateral credit agreements.

 

Fair Trading Amendment Act 2013

This Act was part of the Consumer Law Reform Bill.  It amends the Fair Trading Act 1986 to provide new rules around contracting out, unsubstantiated representations, false or misleading representations, unsolicited goods and services, unfair contract terms, consumer information standards, disclosure of trader status and product safety.  It also makes changes to the regime applying to auctions and certain consumer transactions (layby agreements, uninvited agreements, and extended warranty agreements).  

Mokomoko (Restoration of Character, Mana, and Reputation) Act

This Act gives legal effect to the agreement between the Crown and te whānau a Mokomoko (29 September 2011).  This agreement relates to the statutory recognition of the free pardon of 15 June 1992 granted to Mokomoko by the Governor-General in exercise of the Royal prerogative of mercy.  The Act also restores the character, mana, and reputation of Mokomoko and that of its uri.  It does not prevent te whānau a Mokomoko from seeking through the Treaty settlement process the settlement of their historical Treaty of Waitangi claims.

Royal Succession Act

This Act implements a number of changes in respect of Royal succession.  These include the changes to the rules approved in principle at the Commonwealth Heads of Government Meeting in Perth on 28 October 2011.  They also include the specific new policies that succession will be determined without regard to sex; and that Crown succession and possession will not exclude people who marry a person of Roman Catholic faith.

Secondhand Dealers and Pawnbrokers Amendment Act 2013

This Act was part of the Consumer Law Reform Bill.  It amends the Secondhand Dealers and Pawnbrokers Act 2004, by adjusting the definition of secondhand dealer for the purposes of licensing.  A person is presumed to be a secondhand dealer if they deal in secondhand articles on six or more different days within a 12-month period, or if within that period they obtain over $2,000 revenue for the sale or such articles.

Subordinate Legislation (Confirmation and Validation) Act

This Act prevents the lapse of certain subordinate legislation that would lapse but for an earlier confirmation by Act of Parliament.  The Act lists the instruments prolonged, categorised by the statute they had been made under.  There are nine such statutes, and include the Biosecurity Act 1993, the Civil Aviation Act 1990, and the Customs and Excise Act 1996.

Weights and Measures Amendment Act 2013

This Act was part of the Consumer Law Reform Bill.  It amends the Weights and Measures Act 1987 by making various changes including those to the purpose of the Act, infringement notices, and penalties.

Legislative Instruments

Care of Children (Parenting Information Programme) Regulations 2014 
Family Courts Amendment Rules 2014 
Family Courts Amendment Rules 2014 (No 2) 
Family Courts (Prescribed Proportion of Professionals’ Costs) Regulations 2014 
Fisheries (High Seas Fishing Notifications—Commission for the Conservation of Antarctic Marine Living Resources) Amendment Notice 2014 
Fisheries (High Seas Fishing Notifications—Commission for the Conservation of Southern Bluefin Tuna) Amendment Notice 2014 
Judicial Salaries and Allowances Determination 2013 
Securities Act (Directors' Certificates—Collective Investment Schemes) Exemption Amendment Notice 2013 
Social Security (Childcare Assistance) Amendment Regulations 2014
Takeovers Code (Equity Partners Infrastructure Company No. 1 Limited) Exemption Notice 2013

IN THE WEEK AHEAD

The House had its first sitting for 2014 on Tuesday 29 January.  Its first sitting week will end on Thursday 30 January, and the next sitting week will be Tuesday 11 February to Friday 13 February, following Waitangi Day.

IN COMMITTEE

Select Committees resumed their meetings this week on Tuesday.  Most Committees are undertaking financial reviews of the various bodies they are responsible for.  On Wednesday the Finance and Expenditure Committee considers the Budget Policy Statement for 2014 and the Half-year Economic and Fiscal Update of December 2013, and the Government Administration Committee continues its inquiry into the accessibility of services to Parliament.  The Privileges Committee considers the Privileges Bill, and it continues with its inquiries into the use of intrusive powers within the parliamentary precinct and into the functions and actions of the NZSIS.  

On Thursday the Commerce Committee will consider the Credit Contracts and Financial Services Law Reform Bill and the Regulatory Standards Bill.  The Justice and Electoral Committee will consider the Human Rights Amendment Bill and the Register of Pecuniary Interests of Judges Bill.  The Local Government and Environment Committee will consider the Report of the Parliamentary Commissioner for the Environment on Water Quality in New Zealand.  The Primary Production Committee will consider the Food Bill.

IN THE COURTS

Supreme Court clears MPI's pork meat import decision

New Zealand Pork Industry Board v The Director-General of the Ministry for Primary Industries[2013] NZSC 154

At the end of last year the Supreme Court, agreeing with the High Court and Court of Appeal, found that the Ministry for Primary Industries (MPI) followed a proper decision-making process before it allowed imports into New Zealand of raw pork from countries where the highly contagious Porcine Reproductive and Respiratory Syndrome (PRRS) (blue ear pig disease) is found.  

The Biosecurity Act 1991 empowers MPI to decide on biosecurity measures to protect against high-risk imports.  The relevant provisions also prescribe the matters MPI must consider in making such decisions.  In 2011 MPI's Director-General produced biosecurity standards (Standards) that would permit the importing of raw pig meat from countries where PRRS is present (where importing was previously restricted).  The decision followed consultation with interested parties and a consideration by a statutory independent review panel.

The New Zealand Pork Industry Board (Board) objected to the Standards during consultation and sought judicial review of MPI's decision-making process, alleging MPI did not comply with the Act and acted with procedural impropriety.  The Board argued it was improper for officials, whose work was the very subject matter of the disputed issues, to prepare the decision paper of such issues.  It also argued the issue was predetermined because of a lack of further consultation on a revised model of risk analysis.  The High Court restricted the introduction of the Standards pending the case's outcome.  The High Court and Court of Appeal both found in favour of MPI, and the Board appealed further to the Supreme Court.  

The Supreme Court found that MPI's risk analysis, reports, expert working group, and consultation procedure met the standard required of MPI under the Act.  Risk assessments were inevitably subjective, and focussed on minimisation rather than elimination, and it was impossible to demand precision in the face of differing expert reports.  All reports had adequately been considered, including those critical of MPI's policy choice.  Above all, the Act was interpreted as not demanding each and every review or report be considered separately.  The process was to be considered as a whole.  Subsequently, the interim restriction initially placed on the Standard has been lifted.

Chief Justice Elias gave a separate minority opinion, agreeing largely with Justice White (Court of Appeal minority) that strict adherence to procedures is essential to decision-making in areas of acknowledged risk, complicated factors and the possibility of significant adverse consequences if the wrong decision were made.  MPI's failure to consult on the revised risk analysis fell short of the standard required of MPI, because it meant that the novel and sensitive model had not been informed by sufficient empirical information and scientific knowledge before it was adopted, and the risk was resultantly not appropriately calculated.  Her Honour ultimately found that the Act's procedures were not followed and that the Standards were invalid.

This case illustrates the nature and procedure of the Courts' judicial review function.  In spite of the favourable outcome for MPI, however, the case effectively postponed the issuance of the Standards, and led to a sustained minority opinion on the function of public decision-making, which is testament to the gravity and importance of any judicial review process.

IN TARDE

Update on Trans-Pacific Partnership Negotiations

On 15 January, WikiLeaks published further documents relating to the confidential Trans-Pacific Partnership Agreement (TPPA) negotiations.  The leaks are a draft text of the environment chapter of the TPPA, as well as the Chair's Report of the Environment Working Group following the Salt Lake City round of negotiations, which concluded on 24 November. 

The leaks follow earlier leaks of the draft intellectual property chapter in November and a chart and commentary outlining the negotiating positions of various countries in December. 

The environment chapter covers various issues including biodiversity, conservation, climate change, indigenous knowledge and resources, over- fishing, and illegal logging.  The chapter also outlines how disputes arising after the TPPA's implementation are to be resolved.  The Chair's Report notes that the main area of contention is whether the TPPA should oblige member States to adopt, maintain, and implement measures contained in other multilateral environmental agreements, such as the Montreal Protocol.  The chapter has been criticised by numerous conservation groups for not going far enough to protect the environment.

New Zealand's Trade Minister's spokesperson has said the TPPA environment chapter would promote high standards of environmental protection, and enhance the capacity of TPP members to address trade-related environment issues.  In spite of the disagreements between the parties, the final TPPA is expected to be signed sometime this year.

The leaked environmental chapter can be found here and the Chair's Report here.

Tariff Concessions   

The following applications for tariff concessions have been made in the past two weeks:

Click here to view table.

IN CONSULTATION

New

Click here to view table.

Current

Click here to view table.