Plant Variety Rights Bill

Members, we come now to Part 2, which is the debate on clauses 14 to 20, “Plant variety rights”. The question is that Part 2 stand part.

Part 2 of the bill sets out exactly what rights a plant variety right (PVR) gives the breeder, the exceptions to those rights, and the term of duration of those rights. By aligning with the 1991 revision of the International Convention for the Protection of New Varieties of Plants, UPOV-91, the bill significantly expands breeders’ rights compared to the current legislation. And this, of course, is good for economic growth, good for intellectual property development, and has been the subject of some public debate about what the right terms of extension are.

Research commissioned by the Ministry of Business, Innovation and Employment during the review found that even under the current legislation, the plant breeding innovation system in New Zealand is in pretty good shape. So I should note that from the outset. Under the current Act, farmers do not have to pay to plant saved seed of protected varieties for the next season’s crops. Under the broader exclusive rights in UPOV-91, reflected in the bill at clause 14, farmers would have to pay for this. However, UPOV-91 permits countries to provide an exemption for farm-saved seed, and the bill gives effect to this exemption so farmers do not have to pay royalties when they’re using saved seed of a protected variety for that purpose.

Some stakeholders have argued that this decreases the return on the investment in breeding new varieties and might hamper, as a consequence, innovation. The research did not find any evidence in New Zealand that we’re missing out on innovative new crop varieties. I understand there are discussions going on between the relevant parties on this issue—Federated Farmers, the New Zealand Plant Breeding and Research Association, and United Wheat Growers. They are, as I understand it, ongoing conversations.

To speak to the term of a PVR, the term of a PVR broadly aligns with the minimum terms required by UPOV-91, which is 25 years for woody plants, their rootstock, and potatoes as well, and 20 years for all other plants. There was considerable debate on this issue, as I understand it, during the select committee process. Getting intellectual property settings right is a balancing act. If rights are too weak, New Zealand could be missing out on innovation. If they’re too strong, that can result in higher costs for users, for consumers, which outweigh any benefits from increasing innovation. Research, again, has not found any evidence that New Zealand has been missing out on innovative new plant varieties.

The bill expands the exclusive rights of PVR owners and extends the PVR term for woody plants and rootstock to 25 years from the 23 years allowed for under the current Act. This has the potential to increase the returns that PVR owners earn from the new varieties. In light of this, no case has been made to extend the PVR term beyond those required by UPOV-91. Indeed, that could actually leave growers and consumers worse off, because the increased benefits for rights holders will come at the cost of other groups.

One exception to this is the PVR term for potatoes, but this was because the Economic Development, Science and Innovation Committee was presented with compelling evidence that a 20-year PVR term for potatoes was not long enough to allow breeders to recoup their investment in light of the long time period required to bring a new potato variety to market. A shorter PVR term could, in time, reduce the number of new potato varieties entering the market. I think that’s a sufficient introduction to Part 2, and I look forward to some root and branch analysis of this part of the bill.

Thank you, Madam Chair. I don’t know why I bother asking the Minister any questions, because he didn’t bother to answer last time. What I’ve found with the Minister is that a few quips here and there doesn’t actually mean that he’s done his work on it.

We’ve seen in this particular bill—I’ve made submissions to the Minister. I wrote to the Minister on 16 June, seeking a meeting to discuss the changes to the Plant Variety Rights Bill proposed by both Zespri and T&G Global in their letter to the Minister on 22 March. I also sent him copies of three Supplementary Order Papers relating to those changes. I received a reply from the Minister 2½ months later, today—today; the day that the bill is being discussed—to say, “No, it’s not perfect. It’s not perfect, but it would take too long.” Well, it took 2½ months to write that letter, so I suppose it would probably take another 2½ years to discuss it with stakeholders.

The letter itself talks about “Revisiting the issues raised by Zespri and T&G Global would involve going back to stakeholders and conducting a further analysis of the impact of proposed changes.” OK, so we know we’re going to be back here again, having to fix this up again. It reminds me of the Credit Contract—what was it called? The Credit Contract Finance, or something—

Chris Bishop: The CCCFA.

Hon JUDITH COLLINS: The CCCFA—yeah—or something. We ended up back here, having destroyed people’s hopes of getting homes.

So, anyway, coming back to this bill and the Supplementary Order Papers, these are relatively minor changes—

Hon Member: It’s the same Minister.

Hon JUDITH COLLINS: The same Minister—the same Minister. Too clever—by words—to have a meeting, too clever to talk to the industry, and too clever to consult with the actual stakeholders, who, by the way, we’re very lucky to have. They’re able to still export, despite the fact that they couldn’t get enough workers in to actually pick the fruit in the first place, and they’re now paying a penalty for that because fruit was picked too late. Those same people, who he doesn’t have time to meet with—maybe they should have talked about a biking trip or something, and he could have been there and met you on the biking track.

They’ve asked to extend the term of the actual licence from 25 to 30 years, and the Minister has come back and said, “Well, that could affect other people.” Yeah, it might well affect other people who want to compete against our New Zealand interests. The amendment to clause 14 that I’ve put up on Supplementary Order Paper 200, inserting subclause (2A), is: “to ‘authorise another person’ includes where—(a) the authorising party was outside New Zealand at the time of authorising; but (b) the restricted act occurred in New Zealand.” Well, this all comes from that court case, the Court of Appeal decision in Gao v Zespri Group Ltd [2021] NZCA 442. That clarified that restricted acts occurring in New Zealand, even if authorised by parties overseas, are within both the scope of New Zealand courts’ jurisdiction and the territorial nature of plant variety rights as contemplated in the actual treaty.

So if we think about it, that is actually that case where New Zealand plant stock was stolen and taken to China and then used to compete against us, and this Minister thinks Zespri doesn’t know what it’s talking about. I think it does know what it’s talking about, and I think it is something where the Minister writing to me and saying, “Well, we need to get it through because everything else is too late on our response as a Government to UPOV-91.” Well, too late—whose fault is that? Is it Zespri’s fault? Is it T&G’s fault? Is it the New Zealand producers’ fault? No, it’s his fault, and they’re having to pay for it.

Instead of taking notice of them, in March this year—which was followed up by a letter from me because they couldn’t get to him—he was too busy to meet on that, too. Maybe he should just give up his portfolios and give them to one of these other young thrusters they’ve got over there, like Glen Bennett. He’s a nice young person. I’m sure he’d be keen for it. Jamie Strange—he’d be keen for it—or Ginny Andersen. These people—I’m sure they’d love to have the job if he’s too busy to meet with some of the senior stakeholders, not only in this area, but actually in the country.

Chris Bishop: What about Rachel Boyack?

Hon JUDITH COLLINS: What about Rachel Boyack? She’d be brilliant, for at least two months. Thank you.

I would be delighted to respond to the honourable member’s contribution—if I can call it that; a somewhat lazy contribution that neglected to mention the parts in the letter which addressed her concerns.

Perhaps it was convenient not to mention that the arguments she is raising have been considered; that I did meet with the industry and carefully listened to their concerns, despite advice that their concerns might have merits but probably didn’t stack up. Certainly the National Party members of the select committee who approved the select committee report did not agree with those findings. The Hon Judith Collins, here, obviously tried to undermine her own colleagues across Parliament—not something unusual; we’ve seen it before as she undermines other National Party colleagues and their work on the select committee. But then again, she likes the podium.

So there we are, but I will clarify because I think it’s important to put these things on record for the committee that I did respond to the Hon Judith Collins; that I have laid out the reasons why what, on the face of it, are concerns that do warrant consideration we have, on balance, decided to allow the regime to fall where it lies now.

That is because revisiting these issues—the ones that have been raised by the Zespri and T&G Global—would involve going back and doing further thorough consultation, because they have already been thoroughly consulted on a particular proposal.

Given the findings of the previous review and also the work of that committee—and I do take on good faith the hard work of those members on the committee, be they National Party members or Labour members, although Judith Collins is now calling that into question—I do think they went through it thoroughly. I have seen the work that they’ve done, I’ve seen the previous review, and I then further wanted to hear the concerns directly from Zespri and T&G Global, because I think they are things that warrant consideration. I think that’s why they were given full consideration.

The other thing to say is that if we do go through another exercise of repeating this exercise, again, it would delay the benefits of a new plant variety rights regime, including the benefits that it would bring to plant breeders—those who are doing the innovation in this country, those who want to seek the rewards of innovating for New Zealand. I don’t think that that is a good idea—that we delay further—when there is opportunity here to reward our innovators through protecting their intellectual property better.

So I meet and hear with Zespri and T&G Global, who presented, I thought, a compelling case but not a case so compelling that it was immediately obvious that the balance that the previous review and the select committee had found was not the best balance right now; certainly, also, the Gao v Zespri Group case. I mean, evidence has been presented to me that, again, how the law is now described is the best outcome. I’ll read out that paragraph just for the benefit of the committee in the letter that I’ve provided to the honourable member. The authorising issue, which is the one that the Hon Judith Collins has raised, I have stated clearly I don’t see the need for any changes here. If an unauthorised act takes place in New Zealand, there is clear ground for infringement proceedings to be commenced. If an unauthorised act takes place outside New Zealand, then this is outside the jurisdiction of the New Zealand plant variety rights regime, as set out in the Court of Appeal’s decision in the Gao v Zespri Group case.

I further note that the New Zealand Law Society initially supported Zespri and T&G Global’s position on this issue, and that was partly why it was the subject of such fierce debate. But the Law Society has since withdrawn its position following that Court of Appeal decision.

So the matters do lie where they fall. It is something that has been thoroughly debated and I do respect the work that the select committee members did and I want to acknowledge those members—both the Labour members and the National members—that did that work. I don’t think, unfortunately, that the argument that Judith Collins brings to delay the bill further, for further consideration of their work, is the best way forward here.

But, of course, we will see how all of this legislation works through and we will make sure that we continue to learn and amend bills and Acts as we always do in this Parliament. Thank you, Madam Chair.

Point of order. I seek leave of the House to table a letter I received today, dated today, from the Hon Dr David Clark, relating to the matter that we’ve just been discussing.

Leave is sought for that purpose. Is there any objection? There is none.

Document, by leave, laid on the Table of the House.

Thank you, Madam Chair. I’d just like to start off my contribution on Part 2 by perhaps reminding the Minister—I guess he hasn’t actually sat in a select committee for a little while, so he has forgotten how it actually operates—the select committees do a job, and I think the Economic Development, Science and Innovation Committee actually does quite well. We work collegially, and I see the chair across the room, my good friend Jamie Strange, who does wonderful work. But the things is that, on select committees, Opposition members are often outnumbered, and often things actually do get past select committee. I’m not suggesting that we oppose the bill—we support the bill—but there are things that need to be done in the committee stage in the House, where members can actually ask questions of the Minister as well as make suggestions.

I think the Hon Judith Collins actually made a wonderful contribution and actually made suggestions through her Supplementary Order Paper (SOP) where she proposed to extend the plant variety right licence years in clause 18(3)(a), to replace 25 years with 30 years. That actually comes, as she said, from the recommendations from the industry. When the Minister suggests that, well, the consultation is over and it’s far too late, why are we sitting in the committee stage in Parliament if it’s too late and what the select committee did is end of story? Why don’t we actually just wipe out the committee of the whole House stage and just get on with it? I just don’t see the point of a committee of the whole House stage, when members should be able to question the Minister and actually make recommendations.

The reason why I believe the Hon Judith Collins actually recommended this is that even I, not a plant grower, not a breeder, but an amateur gardener, who actually—

Chris Bishop: Don’t you have green thumbs?

MELISSA LEE: Not quite! But I planted my favourite fruit tree in my garden—persimmons. I bought a plant—persimmons. It wasn’t actually a small thing or grown from a seed, but it takes years before it will fruit. For a plant breeder who might get a new variety, it might be from a seed or from a stone. I don’t know—they do a cutting and they actually create a new breed or new variety of fruit. Let’s say a persimmon. They plant it in the ground and it takes years for it to actually start fruiting. If that is the case, if that breeder is to make any money from the new variety of fruit that they’ve just done, 25 years may not be long enough, because 10 years might already have been taken up for the tree to actually grow. If that’s the case, what’s the point of them having that right? I think extending it so that they actually do take some benefit from having the right to grow the plant and actually gain the fruit of their labour is something that we need to actually look at.

If the industry, who actually came to the Hon Judith Collins—and, I mean, Zespri is one who do amazing work. I mean, Zespri is where kiwifruit—I love the gold ones; I’m not quite sure about the green ones. But they actually expanded their reach by going to other countries, like South America and Korea, where they actually license them to grow it so they can expand the lifecycle of the export market, so we’re not just reliant on our growing season, but also another part of the world that has opposite seasons to take benefit. I think this SOP by Judith Collins on clause 18 is a wonderful example of how we can improve this legislation, and I would hope that the Minister would take heed of our suggestion, because I think it’s a good one.

The question is the Hon Dr David Clark’s amendment to Part 2 set out on Supplementary Order Paper 132 be agreed to.

The question is that the Hon Judith Collins’ amendment to clause 14 set out on Supplementary Order Paper 200 be agreed to.

The question is that the Hon Judith Collins’ amendment to clause 18 set out on Supplementary Order Paper 202 be agreed to.