Companies and Limited Partnerships Government Bill

The Committee heard submissions on the Companies and Limited Partnerships Amendment Bill over the past two weeks.  The Bill would require a New Zealand-resident agent for companies and limited partnerships, create new rules about reconstruction of code companies and criminalise some breaches of directors' duties.

Most submitters, including the Institute of Directors in New Zealand, New Zealand Law Society, Institute of Finance Professionals New Zealand and a variety of law firms, raised concerns about the criminalisation of some directors' duties because other laws already did so and companies could become unduly risk averse.  Submitters noted that, if any, only dishonest acts should be criminalised.

In relation to the requirement for a New Zealand-resident agent, the Institute of Directors in New Zealand submitted that the resident agent would have similar liabilities but less decision-making powers than a director.  The Institute submitted that a resident director should be required.  The New Zealand Shareholders Association raised concerns about the ability of companies to be operated offshore with only a resident agent.  It also supported a resident director requirement.

Crown Minerals (Permitting and Crown Land) Bill

The Committee also heard submissions on the Crown Minerals (Permitting and Crown Land) Bill.  Submitters raised various concerns with the Bill, drawing on international experience.  For example, John Rutherford submitted that New Zealand should follow the Australian example in order to support the economy.  Roderick Young supported the Norwegian system.  He also submitted that thorium should be a Crown mineral under the Act, and that mineral royalties should be increased from one to 33%.

Commerce (Cartels and Other Matters) Amendment Bill

The Committee started to hear submissions on the Commerce (Cartels and Other Matters) Amendment Bill.  The Bill would criminalise cartel behaviour, and submitters focussed on that new operation of the criminal offence, for example:

The Commerce Commission sought the removal of the honest belief defence, to prevent well-resourced companies using the provision cynically to avoid prosecution.

The New Zealand Law Society submitted that an appropriate balance between cynical and genuine use of the honest belief defence must be found.

Other submitters stated that criminalisation was unnecessary because cartel behaviour was not a problem for New Zealand