Hazardous Substances and New Organisms (Approvals and Enforcement) Amendment Bill

Certainly, Part 2 is really the nub of this amendment bill. It deals with group standards. As section 96A, inserted by clause 20, states: “The purpose of this Part is to enable the Authority to issue, amend, and revoke standards (known as group standards) for groups of hazardous substances … that have a similar nature, are of a similar type, or have similar circumstances of use, so that the risks of the grouped hazardous substances can be effectively managed by 1 set of conditions.” In many respects, that concept has been supported widely by the industry. I understand, though I was not on the Education and Science Committee, that the 26-odd submitters to the committee certainly agreed that the concept was quite appropriate.

It is important to point out what the general policy statement in the explanatory note of the first copy of the bill brought to the House stated regarding that concept. It stated that the bill complements the amendments passed in March 2004 that addressed the urgent workability issues relating to the transfer of hazardous substances, and that it offers a means to reduce costs to businesses and the Government, and to reduce barriers to innovation, while not compromising appropriate management of risks. That is where the Labour Government needs to be taken to task, because of its track record. We know that this Labour Government has, over the last 5 to 6 years, an abysmal record in terms of adding costs to businesses and individuals right throughout the country—not only in terms of taxation and through the Resource Management Act but certainly through the Hazardous Substances and New Organisms Act.

This group standard provision is, indeed, one of the mechanisms by which the Government is hopeful that costs will be minimised. Once again I ask the Minister in the chair, David Benson-Pope, to take a call to tell us what mechanisms he has in place to ensure that the standards will be effective, that costs will be lower, and that the New Zealand public will be safe under the mechanism of transference in groups rather than as individual substances, when many of these substances have never had an appropriate risk management assessment. I hope the Minister is listening to this. I hope he will stand up and state whether the Labour Government will assure New Zealanders that transferring these substances in groups will indeed be good for the environmental sustainability of New Zealand.

Can he also tell us just how much it will cost the Environmental Risk Management Authority to make the appropriate risk management assessment? Will it be up to $1 million, as we are led to believe by the authority? How many substances, potentially, may require risk management assessment per year—is it five, is it ten, or is it 15, which would mean $5 million, $10 million, or $15 million? And will the Government make sure that those funds are indeed available to the authority? I hope the Minister takes note of those issues, and can indeed reassure the New Zealand public that those questions will be answered.

I think one of the other points that it is important to focus on is the submission brought to us by the Sustainability Council. In the submission the council said that New Zealand had not learnt sufficiently from its historical mismanagement of hazardous substances. It went on to say that failure to regulate adequately in the past had left a billion-dollar bill for the clean-up of contaminated sites that should be acting as a burning incentive to implement best practice for future activities. The council said that that issue had not been squarely confronted, and I am led to believe that the Labour Government once again has not squarely confronted that hugely important issue. Instead of agreeing that it will be the one to ensure the clean-up is paid for, it has put the cost on to individuals.

I thank Dr Hutchison for the contribution he has made and the assistance of his party in correcting, or bringing to fruition, this legislation—which, of course, was introduced by his Government in 1996, with Nick Smith as Minister. So it is appropriate that National is helping us to make the corrections and policy adjustments needed to meet the transfer deadline of 30 June.

In relation to the question raised earlier about polychlorinated biphenyls, I ask the Chair’s indulgence to explain. Dr Hutchison is apparently not aware that the reason for that clause in the Supplementary Order Paper is to enable the collection of polychlorinated biphenyls and their removal offshore. There is a legal circularity that needed to be corrected, which is one of the key things the Supplementary Order Paper does.

In terms of the reassessment process, I am absolutely confident that only the number of materials that need to be recommitted will be. I think that will be an open-ended question for the Environmental Risk Management Authority, and I am sure that the funding and budgetary arguments around that will be made to me very aggressively. I am also confident that that mechanism provides for the revisiting of any concerns that people may have about an individual application or approval, or a group standard, as new knowledge becomes available. I believe that that meets the concern expressed to me by the Green Party about the desire for a rotational re-approval process, which we believe would be extraordinarily unproductive—because there is no intellectual property involved in the consent itself, of course—and extremely costly. So, yes, I believe I can give the member the assurance he is asking for.

I am also happy to assure him that the discussion about the funding and the delivery capacity of the Environmental Risk Management Authority will be robust as we move into the next Budget round, and one of the issues I am concerned about as a consequence of this bill is that we do have the capacity in our communities—with no added cost to local government, if that can be achieved—to ensure enforcement of the regulations we are passing.

I would like to take a call on Part 2, and particularly on some elements of clause 20, which make some significant amendments to the whole process of the Hazardous Substances and New Organisms Act. I thank the Minister for his contribution. He responded to some issues on which we do have some concerns. I do not think there is any doubt that any reasonable and considered position would say that we must adopt a best-practice approach in giving assurance to the process of using hazardous substances. Although it may be our desire to minimise or have no involvement with hazardous substances, that simply is not practical. They are a part of several elements of New Zealand’s production systems. They are certainly used right through the primary production system, and in industry and a whole range of places. So it is essential that we can say we have a reasoned process—a process that is robust and withstands scrutiny.

We certainly want to support some elements in clause 20 going forward, so we are here to support the legislation today. But we have some questions. One implication of any legislation like this is the cost of compliance. The more we seek to create a trace-back or an audit process, or to give an assurance, the greater the implication is that users will have to comply, and in compliance there is a time cost and in some ways a financial cost. For example, I found to my surprise about 18 months ago, when going into a service agency to purchase some chemicals, that I was required to sit a test to certify I was an appropriate person to purchase those chemicals.

💬 Simon Power: Did the member pass the test?

Well, I cheated—not really; I am joking. But we just go on and on, and in the assurance process we have to comply with a whole lot of things for a practice some of us have been involved in for a long, long time. Yet we need to have some kind of certification in order to give that assurance. That has implications in terms of cost and a whole lot of difficulties surrounding what has been normal practice. It makes for a level of grumpiness in the consumers of the products concerned, so we need to be absolutely assured that we are taking them with us.

I just draw the Minister’s attention to new, unanimous subsection (6) of section 96C, inserted by clause 20. It states: “As soon as practicable after issuing, amending, or revoking a group standard, the Authority must do the following:”, and the notification elements in the provision then follow. I wonder why there is the phrase “As soon as practicable …”. I would have thought that notification would be an element in establishing the new group standards. I wonder whether the Minister could take a call and explain to us why there is not some immediacy about that. We live in a very vibrant landscape in the hazardous substances and new organisms area, where things are moving, and keeping up to speed with all of the changes is a significant issue. So I would like an explanation as to why there is that sort of little step back, in that there is an out that may not have immediacy associated with it.

I am encouraged though, on looking through a number of the subsections in that particular provision, to see that there is a test, because one of the concerns I have regarding the compliance issue is that we have tended to just make changes for the sake of change. So I am pleased to see the test that applies in some of the new, unanimous provisions in clause 20. For example, subsection (1) of new section 96D, inserted by clause 20, states: “… (a) in the case of any hazardous substance … to which section 96C(1A)(a) applies,” the authority must “be satisfied that issuing or amending (as the case may be) …”. So we actually have the test that there is to be an advancement—an improvement. I am not sure about the factors that surround the decision on whether there is—

Speaking to clause 20, I say it is interesting to look at what the group standards allow, because there are two different ways in which this happens. Section 96A in clause 20 states the purpose is “to issue, amend, and revoke standards … for groups of hazardous substances … that have a similar nature, are of a similar type, or have similar circumstances of use, so that the risks of the grouped hazardous substances can be effectively managed by 1 set of conditions.” A number of submitters did recognise that there was, perhaps, a saving in that regard—that it would not increase compliance costs but would actually reduce them. It is a bit of a surprise that the current Government has come up with something that might be useful, but perhaps it was the participation of the National members on the select committee that brought that about.

The Environmental Risk Management Authority issues group standards by notice in the Gazette, and a notice is a regulation for the purposes of the Regulations (Disallowance) Act 1989, but is not a regulation for the purposes of the Acts and Regulations Publication Act 1989. As a consequence, group standards are a type of instrument commonly referred to as deemed regulations, and are subject to the following requirements: presentation to the House within 16 days of being made, scrutiny by the Regulations Review Committee, and disallowance. So I guess that raises the question about their being issued within a reasonable time frame, which was mentioned by my esteemed colleague Eric Roy. He made a fantastic contribution, and it was very perceptive of him to have picked that one up. So there is a time frame around when that notification is required to be made. Group standards would not be subject to other requirements that apply to statutory regulations, which include drafting by parliamentary counsel, Cabinet approval, and inclusion in the statutory regulations.

So, yes, this move will reduce the costs to industry by lowering the number of applications businesses would have to make to the Environmental Risk Management Authority, which is a good thing, and it will provide simpler prescriptive alternatives to the technical controls and regulations, which have been difficult to implement to date. In turn, that will give industry a lot more certainty on exactly how to comply.

But there was some concern about consultation with affected parties, and a recommendation was made around that issue to ensure that industry and other affected parties have an opportunity to comment during the development of group standards. I am unsure whether that is actually being considered and recognised within the provisions of this bill, so perhaps the Minister might like to take a call and let members know whether he has supported the ability for affected parties to be part of the consultative process in the establishment of group standards. Of course, that move will result in a more robust outcome, which is what we all want to see, as it helps to encourage compliance in the industry. So I hope those concerns are noted.

One of the other concerns raised was the duplication of the Resource Management Act with regard to group standards for regulating waste that has hazardous characteristics. As was mentioned in one of the submissions, under section 31 of the Resource Management Act territorial authorities are required to control any actual or potential effects of the use, development, or protection of land, including the implementation of rules for the prevention or mitigation of any adverse effects of the storage, use, disposal, or transportation of hazardous substances. The Resource Management Act has a broad definition of “hazardous substance”, which includes but is not limited to any substance defined as a “hazardous substance” in section 2 of the Hazardous Substances and New Organisms Act 1996. Therefore, that definition would include imported and manufactured hazardous substances registered under the Hazardous Substances and New Organisms Act, but would not be limited to them. So that whole section of the Resource Management Act refers to hazardous substances, and we now have the Hazardous Substances and New Organisms Act. Perhaps the Minister might like to take a call to clarify that relationship between the two Acts, so that the responsibilities and the use are clearly defined, because we do not want to see any confusion about who is responsible for what and where. I think it is very important that those matters are clarified, and perhaps the Minister could take a call on that.

It is pretty disappointing that the opportunity was not taken during the process of this bill to perhaps streamline some of the provisions for increasing our biodiversity in this country, because we cannot develop our entrepreneurial skills in our agricultural sector if we cannot import.

I would like to take this opportunity to speak to Part 2 of the Hazardous Substances and New Organisms (Approvals and Enforcement) Amendment Bill, but before doing that, I want to review the purpose of the bill. This bill aims to improve the workability of the hazardous substances provisions of the Hazardous Substances and New Organisms Act. When I was doing some research prior to this, people were telling me that it was a droll bill to be considering, but as a new member of Parliament I thought that the hazardous substances may have had more to do with recalcitrant members of this House. But, as time went on and as I looked through the pages of the bill, I did not see the names of Rodney Hide or Winston Peters there. So as I got deeper into the research on the bill, I found it had more to do with chemicals and a vast variety of other hazardous substances.

Putting that aside, let us look at Part 2, which provides for the insertion of a new Part 6A, “Group standards”, into the Hazardous Substances and New Organisms Act. Today I would like to address five areas within Part 2. Firstly, I will address new section 96C, regarding the notification of group standards, and, secondly, new section 96D, regarding the issuing of group standards; thirdly, I would like to focus on the efficient and effective management of group standards, in new section 96D, which is a very key issue; fourthly, I will look at the most effective means of dealing with the standard, which is in new section 96D(1)(b); and, lastly, I will focus on considering the best use of group standards in terms of international practice.

I turn firstly to new section 96C to look at group standards in general, and the issue of group standards. I believe that this provision, which allows group standards to be put by notice into the Gazette, will improve the efficiency with which we are able to bring hazardous substances into the marketplace generally. I think it will speed up the process significantly, and will allow for our farmers, our manufacturers, and our entire economy to put hazardous substances into the marketplace quicker, which is generally a good thing for the Act and for the economy.

I move to new section 96D, which covers when group standards may be issued or amended, and I will focus on new section 96D(1)(a), which provides that the authority must be satisfied that issuing or amending group standards is a more efficient and effective way of managing the risks of all hazardous substances. I think it is a very important point that before those substances are brought into the marketplace, the Environmental Risk Management Authority, which is responsible for making the decisions, seriously takes heed of this particular point. In issuing group standards, it must be certain that there is a more efficient and effective way of managing the risks posed by those substances. New section 96D, which provides that the authority must be satisfied that issuing or amending group standards is a more efficient and effective way of managing the risks of those hazards, is pointless. All that provision does is to increase the bureaucracy and the costs of bringing those materials into the marketplace, rather than improve the ease of bringing new hazardous materials into the marketplace, which would allow our businesses to be innovative and grow.

I move to new section 96D(1)(b), the fourth point I will focus on, which states: “(i) the benefits associated with a reduction of environmental and health risks outweigh the economic costs associated with complying with the group standard;”. That is a very important point. When we bring new hazardous substances into the marketplace we should consider whether they will have a much better economic benefit for our farmers or for ourselves. So bringing them in is as important an issue as the compliance costs or the regulations that we put on bringing those hazardous substances into the marketplace.

Lastly, I would like to focus on new section 96D(d), which raises a point that Nick Smith brought up early in the debate on this bill. When we bring in hazardous substances, we need to focus on the best international practices and standards for the safe management of hazardous substances. I think that point, out of anything, is very important. Nick Smith talked a lot about having joint standards across New Zealand and Australia.

I rise to talk to Part 2. In particular, I would like to bring to the attention of members section 96D(1)(b)(i), inserted by clause 20, which states: “the benefits associated with a reduction of environmental and health risks outweigh the economic costs associated with complying with the group standard;”. That is a significant point. What it means, I believe, is that although we have to be mindful of the environment, that comes at a cost. I think we all need to be very much aware of that. If this amending legislation goes through today, it will actually come at a cost.

It was interesting to hear the Minister talk, when he took a call, about whether there is actually a time line for a review. I cannot see it anywhere in this document, and I think that is significant. It sounds to me—and Dr Hutchison agrees—as though this legislation is a bit like an experiment. Where is the review? Will it happen in 2008? Will it happen in 2010? Or will it never happen?

💬 Dr Paul Hutchison: Or will it happen after a disaster?

That is right, Dr Hutchison; that is a very valid point. I believe that we actually need to think seriously about putting a date in here for a review, so that this experiment does not go wonky and end up becoming a disaster for this country.

💬 David Bennett: You had better make sure that they do not change the results, either.

That is exactly right. The member from the Waikato has some first-hand experience with the hazardous substances legislation as a farmer, and he knows that this amendment will be extremely costly on his business and on the businesses of his peers, right across New Zealand.

So I say again that I believe we need to be very cautious about this experiment. We should consider the efficacy around the bill and how it could potentially be costly and cumbersome for this country. We know that the costs will flow from the importer through to the retailer, and on to the end-user. I talked about that previously—about the costs and about how farmers will bear the brunt of them. The costs will be passed down, when the legislation is passed in this Parliament, without thinking about the end-user. We know it will cost another $3,000 for arable farmers.

We have heard about $2 million of savings here today, but I cannot see where the $2 million of savings are. Where are they? The member for Rangitikei, who, I believe, might have sat on the Education and Science Committee, knows that is an issue. Where are the $2 million of savings? I cannot see them. It would be great for the Minister to take a call and outline to a back-bench MP where the $2 million of savings are, so I can actually understand that.

💬 Anne Tolley: Does he know?

I am not sure whether he does. That is why I would be quite keen for him to take a call and explain to me where the $2 million of savings are.

What I can see is that we need to be mindful of protecting the environment and of the sustainability of this thing. But this legislation will lead to extra costs. I am concerned about the experiment, and I think we need to have a date in the bill for a review.

Part 2 of the Hazardous Substances and New Organisms (Approvals and Enforcement) Amendment Bill is indeed the nub of the bill. The group standards issue is the one that should be focused on most carefully, because—as the member from Horowhenua, Nathan Guy, pointed out so ably—in many respects, this is a very new situation for New Zealand. I note that both in the explanatory note and in the very good submission of the Sustainability Council, the point is made that we should learn by overseas experience regarding the group standards situation. In fact, one of the points that the Sustainability Council made was that the Environmental Risk Management Authority can leverage off the work of overseas regulators to a greater degree than is currently envisaged, so that standards can be linked directly to those set by the European Commission. New Zealand can therefore progressively acquire the standards used in its largest export market for food products.

I have some reservations about that in some respects, because the European Commission exacts some very, very tough requirements on those countries that export to it. But I think we should at least make sure that we are consistent with the Australian regulations and experience in that respect. I do not believe that the Labour Government has looked into the synergies with Australia to the depth that it should have.

I also wanted to point out the comments made by the New Zealand Association for Animal Health and Crop Protection regarding group standards. It made the point that although it is generally supportive of the group standards initiative, it notes that pesticides and veterinary medicines, because of their proprietary nature and composition complexity, do not readily lend themselves to this proposal. I would like the Minister in the chair, David Benson-Pope, to take a call and respond to that concern of the Association for Animal Health and Crop Protection.

It also said that in new section 96A, “Purpose of Part”, it believes that such a group of hazardous substances should be of a similar nature and type and have similar circumstances of use. I note that the select committee has, quite rightly and with the support of National, responded to that, so that the section states: “The purpose of this Part is to enable the Authority to issue, amend, and revoke standards … for groups of hazardous substances … that have a similar nature, are of a similar type, or have similar circumstances of use, so that the risks of the grouped hazardous substances can be effectively managed by 1 set of conditions.”

So here is Her Majesty’s most loyal Opposition responding to the thoughts of industries and those involved in the technical aspects of the industry, which has, sadly, been one of the things the Labour Government has lacked in the response to the technical consequences of this important bill.

I want to make a comment regarding new section 96D, “When group standards may be issued or amended”. Once again, that is one of the areas where there is great concern. The section states: “(1) Before issuing or amending group standards under section 96C, the Authority must,—(a) in the case of any hazardous substance … be satisfied that issuing or amending … group standards is a more efficient and effective way of managing the risks of all the hazardous substances in the identified group than the approval process under Part 5; and (ab) in the case of any hazardous substance to which section 96C(1A)(b) applies, be satisfied that issuing or amending … group standards is a more efficient and effective way of managing the risks of all the hazardous substances in the identified group;”.

I move, That the question be now put.

Motion agreed to.

The question was put that the amendment set out on Supplementary Order Paper 5 in the name of the Hon David Benson-Pope to insert new clause 20A be agreed to.

Amendment agreed to.