Organic Products Bill

I present to the House a legislative statement on the Organic Products Bill.

💬 DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.

I move, That the Organic Products Bill be now read a second time.

Firstly, I want to say that it’s great to see the bill back in the House. Demand for organic products has grown markedly in recent years. In 2019, organics was estimated to be worth €106 billion worldwide—approximately NZ$184 billion—with an annual increase of 9 percent on the year prior. Industry estimates put the value of New Zealand’s organic sector in 2020 at $723 million, a 20 percent increase on the 2017 figure. An estimated 58 percent of New Zealand’s organic output in 2020 was exported. A robust and practical framework is needed to help facilitate and secure the ongoing growth of New Zealand’s organic sector.

The purpose of the Organic Products Bill is to increase consumer confidence in purchasing organic products, to increase certainty for businesses making organic claims, and to facilitate international trade in organic products. The bill delivers this by enabling the development of mandatory organic standards and ways to check that businesses selling organic products are complying with that standard. The bill sets out the high-level framework for the organic system and establishes roles, powers, and offences, while the regulations will set out the detail of what organic businesses need to do in order to call their products organic. Standards will set out the technical rules for producing and processing organic products.

The bill will also require a change to the way organic businesses operate. Businesses will be required to apply to the relevant ministry for approval of their status as an organic business instead of their certifier taking care of the whole process. This wouldn’t duplicate any functions of the certifier, but would transfer one step in the process from the certifier to the relevant ministry. Those certifiers, to be called “recognised entities” under the new regime, will continue to play a central and crucial role in the system.

I want to take the opportunity to thank the Primary Production Committee for their work in scrutinising the bill. The committee received nearly 350 submissions on the bill and heard over 60 oral submissions. I also want to thank all the submitters that took the time to share their views on the bill. I understand that many submitters have also provided comment on the draft regulatory proposals. I recognise that throughout the select committee process, submitters were concerned with the change to add ministry oversight. However, following the evidence presented on the benefits in detail behind ministry approval, the Primary Production Committee chose not to amend or to remove this element from the bill.

These benefits include, firstly, aligning the bill with other regulatory models in New Zealand which many businesses are already subject to, such as the Food Act 2014, helping create efficiencies in the system; and, secondly, building the organic sector’s resilience and integrity by bringing further consistency in approach and in decision making into the system. It will also make it easier for businesses to shift between recognised entities, which in turn allows for better market competition between recognised entities. And, lastly, it assists the Government to negotiate better market access to increase trade. Government oversight of the system is preferred by the Governments of major export markets.

The bill has been reported back with some amendments, and I want to acknowledge that the committee did not significantly change the bill, but the bill has a new title now: the Organic Products and Production Bill. Two of the other key amendments relate to how the organics sector can be involved in scrutinising the standard. First is the addition, in the bill, of a power to create an advisory council broadly representative of the sector. This council could provide crucial sector advice to relevant ministers or chief executives, including on the interpretation and ongoing maintenance of organic standards and implementation of the regulations.

The other key amendment related to the organic standard is a change in how organic standards can be made. The bill as reported back splits the standards-making process into two parts. The regulations will specify the scope, standards, and high-level principles, which should guide the technical parts of the standard, which can now be made by notice. This change is important because it will better allow the experts in organic production—those working in the organic sector—to play a greater role in the development of the technical rules around the organic standard. As a new instrument to set up a new regulatory system, the bill needed some tweaking to ensure it should operate as intended. I also saw an opportunity to clarify a number of provisions in the bill to provide greater transparency and clarity for organic stakeholders.

To make these adjustments, I developed a Supplementary Order Paper (SOP), which has just been released. The amendments made by the Supplementary Order paper will make this Act a stronger and more robust piece of legislation. I’ve introduced a clause to recognise and respect the Crown’s responsibility to give effect to the principles of Te Tiriti o Waitangi, and a clause to strengthen consultation requirements in the bill, including for Māori.

I have also made amendments to the information-sharing provisions to better reflect Cabinet’s original intent to ensure the interoperability of the regime with other legislation. The SOP incorporates more robust enforcement mechanisms through requiring recognised entities to follow corrective action, as well as giving recourse to the relevant Government department if a regulated party ignores corrective action or breaches other parts of the Act. I have proposed changes that allow the bill to operate as intended—for instance, several adjustments have been made to provide further clarity and transparency to the bill’s regulation-making powers. Finally, I’ve also clarified the transitional arrangements to further support our continued export of organic products while businesses move into the new system.

As I’ve previously said, it is great to see this bill progressing. I look forward to the discussion today and to debating the bill in more detail during the committee of the whole House. Thank you, Mr Speaker.

The question is that the motion be agreed to.

Thank you, Mr Speaker. I’m happy to take a call on the Organic Products Bill.

Interested to note the Minister’s comments there; I just want to pick up on a few of those. Obviously, the key one being the Supplementary Order Paper (SOP) that has now just been delivered to the House. This bill has been years in the making—2012, I believe: a decade-odd now, in the pipeline. And yet, at the very last minute, the Minister drops a substantial SOP—90-something pages—right as we are having the second reading, without there being any opportunity to have read through that prior to having this reading.

So on that basis, we will be reserving our comments on that until we’ve had the opportunity to discuss it or look at it more fully. But noting the Minister’s comments around allowing specific consideration for Treaty aspects within the SOP, my expectation would be that everyone has an equal opportunity in terms of the organic sector, and indeed that should be based on their particular sector needs rather than the ethnicity of any particular group. So it’s interesting to see that—and we saw that with the fair pay agreements as well—where there’s the risk of distorting or creating uneven opportunities for different groups.

So we will consider that as we go through the committee of the whole House stage as that comes up. I don’t know how many years we might wait before we get to the committee stage. Perhaps it will be less than that now that we’ve finally seen it shocked back into life for its second reading here in this Parliament. But indeed, it may be the next Parliament before we see the committee of the whole House stage. Who knows?

Look, I did just want to touch on a few of the amendments that were reported back from the select committee as well, because ultimately what we’re looking to achieve here is standardising a system for organic products in New Zealand. On the face of it, we support that intent. It is a mechanism that will help, I think, add some confidence to the system domestically. But also for our trade partners internationally: if they can look at our standard system set at a Government level with clear regulations outlining how participants can or cannot operate within that—depending on their sector and depending on the products and the broader supply chain—then that helps to give confidence to those international markets.

We heard the Minister say we’ve just had an increase now—I think $723 million worth of organic products in New Zealand, with some 58 percent of that exported. So that is a significant value add for our food and fibre sector, and that’s the sort of opportunity that we can continue to exploit here in New Zealand. We have a fantastic reputation internationally, and anything we can do to further enhance that—to add value to our economy here—is well worth pursuing.

So that intent of standardising the system, creating the regulatory framework around the production, processing, labelling of organic products all make sense. We support that intent. As I said, it helps to, I think, give that confidence internationally, but particularly also when it comes to having future discussions or potential discussions around additional trade opportunities, which I hope we will see. Again, we would like to see more focus on expanding our trade access—our market access—globally. Hopefully, this will help to broaden some of that discussion; we may need a change in Government to see a strong focus on trade, but nevertheless, 12 months to go, we shall see.

But on that basis, you know, one concern I do have, though, is around the risk of added compliance. And there’s a couple of the clauses that I do just want to pick up on in relation to that, because we have seen changes through the select committee process here—amending clause 13(1), for example, allowing for a time frame to be placed on an organic approval. So in some instances, that may be appropriate; in others, that may just be unnecessary compliance having to continually renew that certification. Presumably, if we have an appropriate offences and penalties regime in place that can have a regular ongoing audit process in place, then there shouldn’t necessarily be a need to continually renew if that adherence—or not—with the standard can be measured through that auditing process. So interested in exploring that one a little bit more.

One of the changes that I am comfortable with—clauses 33 and 34 being amended, allowing for suspension not just of an entity, but of a class. And I think this is a worthwhile distinction in that it enables for a particular issue if it’s been identified across sectors, for example, at the same point in the supply chain, rather than impacting the individual entities—of which there may be many—that are flowing through that system, it can actually identify that cog in the chain and say, “This is not currently fit for purpose; we need to withdraw recognition for that until it is amended appropriately.”

In terms of the use of personal information, that’s one that I just want to highlight as well. Because we’ve seen, obviously, a lot of concerns over the last few years—data breaches—that personal information in particular is a really important area that we need to protect as much as possible. Obviously, it’s important in the process of providing information around their adherence to the regulatory regime for compliance with organic products. That information is provided, but of course it should only be used for that purpose, and the amendment specifies that under new clause 44A as well.

I think just a nice common-sense—which is not particularly common over the last few years, it seems—change inserting the word “intentionally” into clause 84(1), which basically talks to the offence of resisting, obstructing, or delaying an organic products officer. So obviously, having some level of intent behind that obstruction is an important consideration that previously wasn’t there, which could have ended up with someone being in breach of it. For example, by being late to a meeting with that officer—which may have been caused by some issue on farm; things that can pop up from time to time that need to be dealt with immediately—that could lead to some inadvertent non-compliance and therefore being subject to the offences regime. So bringing in the ability to have some common sense with the intentionality aspect is an appropriate change there.

Also around the standardisation in terms of making sense—standardisation giving effect to the legislative intent of the conversion period. And that, I think, is an important one to note as well, being able to set in regulation the time to convert a property, depending on what sort of industry it may be in from its current practices through to achieving the organic status as defined under the regulations flowing from this legislation. So being able to determine what time frame that might look like, as well, I think is an appropriate step in acknowledging that transition and, again, giving confidence to our trade partners in that regard as well.

But I am concerned that the regulation setting and notices for organic standards may be somewhat restrictive, in that it says the standard that we’re looking to set up here could include specifics on what products would be covered; how the production, processing, and preparation of organic goods must be carried out; and the correct practices for the packing, storage, and handling of those goods would also be included in the standard.

On the face of it, that sounds appropriate. My concern with that aspect is around the potential for innovation to come into the industry. And we have a very proud history in New Zealand—in our food and fibre sector—of continuing to innovate over time. How we operate now is not how we did 10, 20, or 50 years ago, and it won’t be how we operate 10, 20, or 50 years into the future.

It’s important that we allow scope for that sort of innovation to come through and in particular, some of these products—they may be smaller, niche categories—if a particular operator in that space can come up with an innovative new way of doing business whilst, of course, maintaining quality throughout that, then that should be their competitive advantage. And I would just be concerned that there is a risk where you could potentially be stymieing some of that innovation by being so prescriptive with that particular aspect around the regulation setting.

The high-level guidance, I think, is an important consideration as well. Because obviously setting the regulations here is done in confidence—it’s legally privileged—but it is now allowing for the insertion of subclause 3(b) to ensure that high-level guidance is provided to help guide those standards. And again, we’re seeing a lot of examples over the last few years where legislation coming through just isn’t fit for purpose. So it’s really important to be able to connect with the sector, understand exactly what their needs are, and ensure that we are providing the right outcome here.

So, look, on that basis, we are supporting it at the second reading—noting, of course, my concerns around the very late tabling of the SOP the Minister has just done—and we’ll be considering the details of that over the course of this passage through until the committee of the whole House stage. But some good changes made at the select committee, commend their work on it, and we look forward to supporting this bill, hopefully, through the remaining stages, subject to that SOP. Thank you.

I am so pleased to take a call on this, the second reading of the Organic Products Bill. I think it’s probably fair to say we’ve probably made Minister Shaw’s day by having this piece of legislation come into the House today!

What this piece of legislation does is pretty much bring confidence to the consumer, in so far as when they purchase a product that says it’s organic, that it actually is and that it meets certain standards to ensure that it is organic.

This piece of legislation also provides details to businesses of what they need to do in order to be able to call their product “organic”. We heard the Minister talk before about the fact that the ability to trade or sell our organic products overseas is increasing—this, I’m sure, will help to increase it even further.

One of the things I wanted to mention is that this bill brings our practice in line with other countries overseas, our major trading partners, and what they already do to regulate their organic products. It’s going to assist us in growing our organics industry exports, which is what I just alluded to before.

The Primary Production Committee heard from 350 submissions. It feels like a lifetime ago that we were going through this process, so it’s been a bit tricky to try and recall. But we had 60 submitters that submitted orally.

We heard the Minister talk about the fact that there were some concerns raised over the change to add ministry oversight. The committee did hear those concerns and consider those concerns, but, ultimately, we decided to continue with that as well because it does align this bill with other regulatory models in New Zealand, such as the Food Act.

We did change the title of this bill from the “Organic Products Bill” to the “Organic Products and Production Bill”. That just allows to ensure that the production of organics is done in such a way that it meets those standards.

We’ve heard the Minister mention Supplementary Order Paper 262 that he has introduced, which, simply, recognises the Crown’s responsibility to give effect to the principles of Te Tiriti o Waitangi.

I have no hesitation in commending this bill to the House.

Thank you, Mr Speaker. I too rise in support of the Organic Products Bill, and I just want to make a couple of comments in line with my colleague Tim van de Molen. We do support this bill to the extent that it will certainly increase the confidence for consumers who are looking to buy organic products. We often talk about organic food products, but then, of course, there are the fibre products as well. I know a number of people like to ensure they’re wearing organic cotton or organic wool, or even organic silk, but it does certainly give some confidence to the consumer industry in a day and age when retail is in an incredibly competitive environment, as is the food and beverage sector. For a long time, New Zealand producers of organic products have traded on their reputation, which is richly deserved, but at least now, in an international environment particularly, there will be a framework set in place whereby offshore consumers can also recognise the same standards that our growers and producers are required to meet.

It is quite extraordinary that organic growers and producers have relied for so long entirely on private certification regimes, with private standards, and, of course, with no particular set of governing rules. This could have meant that anything and everything could have been considered an organic product. There have been those who have simply been able to self-certify. I often think of the wine industry, purchasing their gold stars, and I, as a consumer, automatically go for the cheap row, but those with the gold stars, because I like to think I’m getting a good deal. But who am I to know that it’s actually a gold star wine?

💬 Simon Court: Does it taste good?

It always tastes good, Simon!

💬 Simon Court: That’s the test!

Now, now—we’re not here to talk about the gold stars and my lack of knowledge around wine. But the Organic Products Bill will also implement—[Interruption] Anna Lorck, I could talk about wine and Berocca all day if you’d like, but not for now.

This bill will also, of course, implement a framework that will allow those businesses themselves, let alone the consumer, certainty around the processes that are needed for them to claim organic status or that their products are of organic origin. As many people have acknowledged, this is a large and rapidly growing industry. I understand it’s growing at about 9 percent a year, I think, worth a quarter of a billion dollars to our domestic market and closer to $700 million in the offshore market, which, as we all know, is incredibly competitive. We’ve just seen in recent months the signing of free-trade agreements with the likes of the UK and the EU. We know these are highly discerning markets, and, of course, we must as a legislator do everything we can to increase the competitive edge.

💬 Rachel Brooking: Wonderful Minister of Trade.

They were wonderful deals. Thank you very much to the Labour colleague across there. And isn’t it great that the National Government started the process of those free-trade agreements. But, of course, it has been an enormous frustration to growers and producers that this legislation has taken so long. Indeed, a couple of Parliaments ago it was begun. It’s taken this long to come into law. I do also acknowledge Minister James Shaw, and I’m very surprised that he’s not down in the House this afternoon to celebrate the second reading, because I know he’s been like the proverbial dog with a bone on this one. Anyway, I digress again.

The certification system I mentioned earlier has, in a funny old way, been organic itself, but it has seen vastly different requirements and standards that have meant both the grower/producer and the consumer haven’t been able to identify what exactly that claim on organic has meant. I think that this inconsistency and this confusion has led to a certain amount of distrust, and I think, from a consumer perspective, we must do everything we can to dampen that distrust, because I think, in a world where food security and food safety is paramount, we’ve got to do, here in this House, all that we can to engender trust in food and product that comes out of this country, because, as we know, our export industry is so vitally important to us as an economy and as a society. But we do, of course, need to stay ahead of the curve. We do know that demand for organic product is growing. I understand the global market itself is well in excess of $100 billion annually, and, as that growth continues, New Zealand has to be in as firm a position as our offshore trading partners. By having a widely recognised certification system, anyone shopping in an offshore supermarket—or, indeed, an offshore retail outlet—is going to be able to immediately recognise that our producers are using similar and recognised standards to our offshore partners.

As I said, and a lot of people have acknowledged this, this has not been a fast-moving piece of legislation. It started with good intentions over a decade ago, but we do, on this side of the House, feel that it’s lost its way a little bit in that policy development area and, indeed, in the regulation setting role that the Ministry for Primary Industries (MPI) will take. I also note that the Minister’s Supplementary Order Paper, if I can just borrow my colleague’s copy of it here, is as big as the bill itself. I just can’t help but wonder, with all these very clever policy makers that we have in this precinct, why on earth this was not brought to the select committee at an earlier date so that it could be discussed and it could be debated. We on the Primary Production Committee have a very collegial relationship, and I would have thought this could have been implemented in the primary legislation itself rather than coming to the House as a very late Supplementary Order Paper, whereby we haven’t had the opportunity to discuss it, let alone read it, from my perspective.

National has made it very clear in our minority view that, despite the fact that we do welcome this bill and we are pleased that it is giving the industry a little bit of certainty, we are concerned, as we’ve outlined in our minority view, that the costs of this regulation are going to prove yet another onerous burden on growers and producers. And we do feel very much that MPI plays a role in being aware—and I should just quote—“of the costs of regulation on some organic farmers” and “It may lead to much higher costs on some producers, and MPI should be ensuring the most cost-effective regulation process.” And secondly—and I again quote—“MPI has given no indication of the costs involved.” That, I think, is the crux of the matter for us, and hence our reservation about supporting the bill entirely. It’s that this lack of transparency on this issue has created a divided reaction amongst organic producers, and I think that some are quite correct to fear that they don’t know what they’re heading into in the likes of an audit process. They don’t know what they’re heading into and the costs that will ultimately come off their bottom line.

I think the really important point to observe here is that we’ve all agreed this country is in the grips of a cost of living crisis. The more costs and the more compliance issues we pour on to our growers and producers ultimately does get fed downstream to the consumers. When we look to families who are looking to put good, wholesome, nutritious food on the dining table three times a day—or, indeed, at night, when families sit down to dinner, as is tradition—we want families to be able to eat the best of what New Zealand can produce, and, of course, if this does become an onerous cost on growers, that does get passed on as an onerous cost to families.

So the National Party, as I’ve outlined, has reservations about the lack of guidance about how this bill will be implemented—how it will be enforced—but we do support it because it does serve the wider interests of the sector and, indeed, of making New Zealand’s organic sector more transparent and, of course, internationally competitive. So I do commend this bill to the House.

Thank you, Mr Speaker. It is my absolute pleasure to stand and take a short call on the Organic Products Bill. As a member of the Primary Production Committee, it is great to have the opportunity to speak on this bill, today, in the House. In fact, I think this might be the first piece of legislation that I considered as a new member of the House. I came in as a new MP at the tail end of the oral submissions on this bill, so it was great to be able to hear from those submitters, to also get the thoughts of the advisers and officials, and then be part of that report back to the House process.

As we’ve heard from colleagues across the House, including my good colleague Jo Luxton here—you know, people are wanting certainty. Ultimately, that’s what this bill comes down to. The organic industry is a rapidly growing industry. It is increasing year on year by about 9 percent. About 58 perfect of the organic products that we produce here, in New Zealand, are exported overseas. And where we see a rapidly growing industry, often what we can see across the board, looking back in history, is opportunity for people to get in on what they think is the next quick buck without necessarily going through all of the proper processes and channels.

What this bill does is make sure that we have a consistent, proper process in place, which will then give consumers, both here in New Zealand and our consumers overseas, the certainty that they have asked for, especially with our trading partners overseas. What they have indicated very clearly to us—from foreign Governments—is that they want some certainty, they want to see consistency in our process, and they would like Government oversight in the process—hence why part of the process is being removed from private certifiers and will now be undertaken by the Ministry for Primary Industries. So that will provide the certainty and the independence and transparency that our overseas consumers have been demanding.

So it is with absolute pleasure, as I said, that I commend this bill to the House.

E te Māngai, tēnā koe. Tēnā koutou e te Whare. What a glorious day for this House—a glorious day in that it appears as though there is consensus from all parties across the aisle here; obviously from the ACT Party soon, who are just giggling behind me about Big Brother or something. But it appears as though, at the very least, the majority of the parties are agreeing on the side of common sense that it makes sense that we have a standardised universal process for certifying organic standards of products and production in Aotearoa New Zealand.

It’s a glorious day because, as others have also acknowledged, this has very much been the bone that the dog, that being our co-leader the Hon James Shaw, has raised consistently with our Leader of the House in his many queries about the business of the House throughout the past two years. And I note, as many others have also said, that this bill has been in incubation since, at the very least, when it was made public in 2018 with a press release from Minister Damien O’Connor.

I want to acknowledge not only the Primary Production Committee, which obviously did a great job, as others have also acknowledged, in the process of considering this bill and a substantive amount of submissions. I want to acknowledge the chair, Jo Luxton, but also those who have helped to advocate for this along the way. Of course, I need to acknowledge Organics Aotearoa New Zealand, particularly Brendan Hoare and Doug Voss, but I also need to acknowledge my Green forebears who’ve been banging this drum for a very long time. That goes back to Sue Kedgley, to Steffan Browning, and of course to Gareth Hughes. It was Eugenie Sage who gave the speech at the first reading on this legislation towards the end of last June, and I’m sorry, to members, that I am subbing in for the Minister, the Hon James Shaw, in our contribution today.

Of course, as others have also mentioned, organics are a huge and growing part of our economy, particularly for our exports. Organics make up $650 million, but $400 million of that is in export product, giving you just a sense of how large that currently is, but also the potential for growth. It might perhaps make more sense to consider this legislation as making sure the products do what they say on the tin, because we have had for a very long time, as others have outlined, rather more—I don’t want to imply that it’s been ad hoc by those who’ve been making a really big effort inside of the sector, but not a universalised and standardised approach to certification.

Consistent labelling is really important not only for producers in terms of having actually arguably, to a certain extent, lesser compliance costs because of that universal type of approach but also for consumers, particularly when we’re in an age of greenwash and concern about a disconnect from labelling, particularly from private companies, and, as National MP Nicola Grigg raised, where it is the case that certain companies can purchase labelling or certification for their products to imply that they’re better than others. Again, this is the importance of having that backstop and that certainty and that guarantee for consumers but also for producers that everybody is reaching the same standards.

As others have also raised, there’s going to be a lot to pick over in the Minister’s Supplementary Order Paper 262—a weighty one that it is. So I’m looking forward to that committee of the whole House stage.

I don’t want to keep members from their lunch break, but I do want to say that this has been a long time coming and we won’t stand in the way of any further progress. The Greens are incredibly stoked to be supporting this legislation at second reading.

The House stands adjourned until 2 p.m. today.

Debate interrupted.

The House adjourned at 12.57 p.m.