Wool Industry Restructuring Bill

Clauses 5 to 17, in Part 2, set up the new companies that I was referring to before. There is movement of the same people from the old Wool Board structure into the new one, Wool Equities. From Wool Equities flow all these companies that one could suspect people apart from growers—and I am being very careful with my words here—might benefit from.

💬 Ian Ewen-Street: You’re privileged.

R DOUG WOOLERTON: The Green member tells me I have privilege, but I assure the Committee that I do not intend to get into anything controversial. We suggest that the members of the Committee should show caution, and should look at the amendments I am promoting, because we believe that once the money flows to Wool Equities it will be a case of “out of sight, out of mind”, and the institutions that are picked up beyond the scope of this bill are put in place by there being agreement that the money go to Wool Equities.

We believe that a person should be put in a position of some power, to look not only forward but back at what has happened leading to this point. In other words, were the farmers fully informed of what will happen in the future? Are the farmers happy to go forward into these companies, which everybody has said go into uncharted territory? I think the ACT member referred to them as a leap of faith. We in New Zealand First believe that leaps of faith are not something that should be promoted by this House. We do not believe that leaps of faith are something that it is in farmers’ natures to take. There are enough leaps of faith with God’s gift of the weather in this country without their taking commercial leaps of faith.

So we believe that a note of caution needs to come in here. We believe that a statutory manager needs to be put in place, to look backwards and to the future in order to give some clarity, and to unravel what every member has said is an extremely complicated set-up. I recommend that course to the Committee, and I can only ask that the other members, namely the Labour, ACT, and National members, will consider at this point changing their vote and supporting what I believe are very, very worthy amendments.

The National Party has given consideration to the amendments in the name of Doug Woolerton of New Zealand First. We will not be supporting his amendments. We have given them a lot of thought. The issues he raises are not new to us. The bill, when passed, requires the Wool Board to present a restructuring plan to the Minister of Agriculture. We entrust this matter to the Minister, and expect him to do his job. We will be watching him very closely. Even though the issues have been firmly put to us on a number of occasions, we do not believe that there is a conspiracy, as many are led to believe. We did beef up the bill to ensure that no share exchange takes place for 2 years, and that fewer directors are on the board, and there are other issues that address that. So we entrust this matter to the Minister and to the industry as a whole.

I am very pleased to have this opportunity to speak on this part. I refer to a comment made by my colleague Mr Doug Woolerton. He, like all the members on the Primary Production Committee, took very seriously the submissions received from a whole range of people. At this late stage, it appears there is a divergence of opinion about where we should be heading. In all honesty, at one stage in the early formation of the bill, I was opposed.

Sitting suspended from 1 p.m. to 2 p.m.

As I recall, I was reflecting on the fact that at the early stages and the preliminary hearings of the submissions I, too, along with Mr Woolerton and Mr Ian Ewen-Street, believed that we just send the receivers in and they dispose of the assets of the board as the receiver sees fit. That seemed to me to be a pretty sound concept at that time. But I have changed my mind, after listening to people like Richard Bentley, who is now the chair of Wool Equities. I listened to him, and indeed had a private meeting with him so he could better explain his thinking. I came away from that meeting thinking, yes, I could accept the proposal that the Government has come up with, because I believe in the strength of that particular individual.

The board has to divest itself of its assets. Some will go to the growers; and the information technology, the technology that the board owns, has to go somewhere. It is better if it is going to an organisation that is essentially controlled by the farming community.

I make the point that the Wool Research Organisation of New Zealand is an incorporated society, and it has been the research vehicle for the wool industry. But it is an incorporated society, and it cannot raise capital. There is a huge demand for the technologies, and the new research and development, that the organisation had come up with—for example, Karatec is just one. New and equally exciting opportunities have been developed, and there is a huge demand for capital to ensure that these developments take place. Mr Bentley assures me that with the structures now in place, we will not have to go overseas to find capital, that it can be financed in a local sense. That is something that should please us all.

Under the new structures that Part 1 will authorise, it is important to recognise that the Wool Research Organisation now has a new business plan, and Wool Equities has rewritten the business plan for Ovita, the biotech company. That company will be looking at ways of ensuring that the protein, that is wool, can be used in perhaps the pharmaceutical industry in a whole host of biotech ways. That needs money, expertise, and, just as important, it needs a business plan to ensure that those processes take place.

I know there have been some real concerns about the “sudden” development of Canesis Network Ltd. We are confusing the two roles here. It is not the role of Parliament to get into the management of this industry. That is for the commercial arms to develop. There are very distinct roles here. One role is governance, and one role is management. If we are to get into the micro-detail of determining in the Wool Restructuring Bill that this or that should happen to parliamentarians’ satisfaction, then I think we are limiting the ability of these commercial organisations that will happen, to best reflect the nature of the workplace, and indeed the demands of the commercial world.

I understand the good intent of the member’s amendment, the principles of which were discussed at the select committee. The proposal, which is very similar to one put forward to the committee by Mr Phil Verry, is one that was considered. The background to it was put very thoroughly to the committee. As the previous speaker has said, on balance the committee—and the Government is happy to support that position—decided that the proposals as laid out and put to the select committee, and the process for dissolution of the board, are sound, and have the backing of the farmers, and to intervene at this late stage with such a proposal is simply not warranted. That is why the Government will not be supporting Mr Woolerton’s amendment.

The question was put that the following amendment in the name of R Doug Woolerton to clauses 14 and 15 be agreed to:

to omit these clauses and substitute the following clauses:

14 Administration and governance of company

The Minister must appoint a statutory manager to the company, on the restructuring day, to take full control of the company.

15 Powers and responsibilities of statutory manager

The statutory manager shall have all the powers of the directors of the company and, in addition, shall have these powers and responsibilities:

(a) to review the conduct and policies of the former Wool Board, since 1996, to determine whether or not the actions taken by the Board, and/or entities controlled by the Board, including Wool Research Organisation of New Zealand (WRONZ), conform to the provisions, intent and spirit of the Wool Board Act 1997;

(b) to take such action as is necessary to remedy any actions or omissions that do not conform to the provisions, intent and spirit of the Wool Board Act 1997;

(c) to forthwith resolve all outstanding issues affecting the Board, including claims against it, on a fair and equitable basis, respectively, preferably by mediated negotiation, but failing that by court processes pursued expeditiously;

(d) to review whether or not the past and intended treatment of and/or disposal of assets of the Board and/or WRONZ, including intellectual property assets, has given proper consideration to: prior rightful proprietary interests in those assets; the best utilisation of those assets on behalf of their rightful owners; and such rightful owners’ entitlement to fair recognition of and recompense for the value of such assets;

(e) to resolve any issues arising from these reviews, as he/she shall deem appropriate;

(f) to institute an appropriate procedure, as he/she shall determine, whereby wool growers: are fully informed of the options for the future structure of their industry that are practicably possible; are informed of the relative merits of each option; and are allowed to freely make an informed decision, by referendum, of the structure they prefer for their industry;

(g) to facilitate and oversee the introduction of the industry structure preferred by wool growers; and, to the extent that he/she deems appropriate, to make available the assets of the former Board to support the establishment of that new structure.