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

Part 3 deals particularly with enforcement of the Act. There are a variety of concerns about this part of the bill. Firstly, clause 21 amends subparagraph (iii) of section 97(h) of the principal Act by omitting the words “local authority” and substituting the words “territorial authority”. I do know that Federated Farmers in their submission were deeply concerned about the cost implications of what local government and regional government could impose on them by not ensuring that their interests were taken care of, and were a bit more concerned that central government itself should be held to account, rather than a whole variety of bodies around New Zealand with different enforcement interpretations and different imposition of costs on to working New Zealanders.

But I also note there is great concern about the liability framework around this bill, and one of the points again made by the Sustainability Council was that agents making use of hazardous substances need to be financially fit in order to meet costs arising from any breach of the controls relating to hazardous substances or third-party claims for damages. They are making a very salutary and relevant point because, more and more, some of those companies that produce toxic substances shelter under shell companies when they are not sure as to whether the liabilities they could incur are able to be fulfilled by them. This is a mechanism that I would again like the Minister to take a call on and say whether he has thought about the situation whereby companies and manufacturers involved with toxic companies do not have the financial backing to be able to clean up the problems after a toxic accident, or are not insured enough or insured appropriately for that to occur.

The second point was that no liability for damages arises as long as the user of a hazardous substance abides by controls set by the Environmental Risk Management Authority. That is a very important aspect, because even at the point that such a control is breached there is no strict liability for harm caused, be it economic, environmental, or to human health. Again, the required remedy is that developers and users be made strictly liable under the Act for damage resulting from the use of hazardous substances, and further, unless firms face the full social costs of their activity they will have the incentive to overexpand those activities at the cost of the wider economy. That balance is obviously one that has to be very carefully worked out so that the compliance costs are kept to a minimum, and that is vital, yet, on the other hand, the liability framework must be robust enough to ensure that those companies that are not abiding by the framework and are responsible for inappropriate toxic damage can be brought to justice, and that there are sufficient liabilities. So it is important that the Minister assures the New Zealand public that those aspects are indeed fulfilled by Part 3.

I would like to comment on new section 97B, “Enforcement of Act in respect of hazardous substances in place of work”. Again we have the situation of Occupational Safety and Health officers going into workplaces and manufacturers’ premises, and on to farms, and enforcing their will, sometimes extremely inappropriately. The submission from Federated Farmers stated that toxic substance is such a specialised area that those officers should be specially trained. Unfortunately, the bill makes no provision for special training.

I have a few points to make about the enforcement provisions in Part 3, but in no particular order. The first point relates to clause 21, which substitutes “territorial authority” for “local authority”. I have not seen the arguments made, but I presume that territorial authorities are probably the more appropriate bodies. My concern is not so much about who does the enforcement as about the costs. We have seen Parliament pass legislation time and time again on a range of matters, such as the legislation regarding motorcar use—

💬 Chris Tremain: Prostitution.

—the prostitution legislation, the impositions around smoking, and the Building Act. The list goes on and on. Again, I ask: who will pick up the tab in respect of this bill? The Committee has a responsibility to consider the implications of what we are doing. The bill deals with a significant area, but the enforcement provisions load the costs on to the most significant and most important body: the local territorial authority.

In that regard, I do not see any clarity offered in clause 22, which inserts section 97B. I look at subsection (2) and see the words “may appoint enforcement officers” and “may exercise the powers of inspectors under the Health and Safety in Employment Act”. Perhaps I have missed something, and I ask the Minister to explain whether that is optional or is required. If we are to have a regime that protects absolutely, then I would have thought that “may” should not be used but rather words that are clear and definitive about the way in which the enforcement powers are to be enacted. Perhaps the Minister could explain that.

I move on to clause 27, which inserts new section 122, “Power to require hazardous substance to leave New Zealand”. I think every person of a reasonable disposition would say that if someone brings in something that is inappropriate, it should go. I am in absolute agreement with that, but my concern relates to a matter that is not covered. I ask the Minister to give some consideration to what happens to goods that are bona vacantia—in other words, do not have a home. I have to say that if I were of a nature to bring in something that was a bit doubtful, I would construct a little path of confusion about ownership, or create some kind of parent company or some kind of construction of safe houses or something, that would absolve me and make it difficult to trace the goods to me. I am aware of such things happening in some circumstances. So although the amendment in clause 27 requires the person who brings in the goods to take responsibility for the cost of removal, and we would tick that off and say it is excellent, in the case of goods that are bona vacantia—no owner, no home—and a risk, what thought and what provisions have been made to pick up on that anomaly?

I believe it is a real anomaly. I know, as I said earlier, of instances where that has occurred with regard to hazardous substances. I know of people who want to bring in something that is on the edge and that maybe there are some questions about—maybe their bookwork has not been done and they intend to get it done here, and the substance does not comply. There is a range of issues whereby that sort of situation can occur, and if there is not a very clear trail back to the person or entity who brought the substance in, who actually pays? Then there is the other element that comes out of this whole argument: the company that brings the substance in may not be able to afford the transit of the goods back out again, if they do not comply. It is very easy to understand how someone may have taken, for want of a better word, a punt on a new product, in the belief that it is a magic bullet—a cure-all—and something from which he or she will make a considerable profit. But in bringing the product in the person may have extended himself or herself, and be in a position where he or she actually does not have the finances to be able—or, again, the person may have constructed some kind of company that is unable—to afford to move it out.

That was an excellent contribution from my colleague Eric Roy on the term “bona vacantia”. I have to mention here that the term “bona vacantia” is not in the definitions in the original Act, or in the bill. I do think that the Minister should give us an explanation with regard to bona vacantia. This is something we should all know about.

💬 Kate Wilkinson: Bona vacantia means “happy holidays”!

Happy holidays? OK. There is huge concern about dumping costs on to local authorities, yet this Government is doing it again. The costs of enforcement in relation to hazardous substances will now be in the hands of local authorities. Members should think about what that really means. This is about testing equipment, and proving the case, or not proving it, because in most cases nowadays people are deemed to be guilty and have to prove their innocence. This is about abatement notices, enforcement officers, and court procedures. No wonder this Government is talking about a $2 million saving. It looks like it is going to pass the cost on to local authorities. I suggest that it will cost far more than $2 million to local authorities throughout New Zealand, and, as a consequence, that cost will be transferred to the ratepayers of this country, and ratepayers are groaning under the weight of those costs. They really cannot accept any more impositions from this Government. But more are in the pipeline.

The other day I was reading a document about housing. It was from a Government department, promoting housing through local authorities’ long-term council community plans. It is the wish list for anybody who wants anything through local authorities, and, of course, it is the ratepayers who have to pay for that. Here is another part of that wish list. The Government wants to transfer the onus of responsibility but without giving any remuneration for the costs associated with it. That is happening constantly with this Government, and it will do that for all of its social services. If the Government can get away with it, it will put more and more of its social services on to local government without a brass razoo going along with it. I think it is an absolute disgrace, and it is time that that was addressed.

We are also concerned about the cost on the farming sector, the agricultural sector. Of course, if the Government thinks it is making savings, we know why. If it is not dumping costs on to local authorities, it is dumping them on to farmers. I would like to answer some of the questions that were raised with regard to those costs. Where are the savings going to be? If we look at one of the submissions, we see that the total cost of compliance with the Hazardous Substances and New Organisms Act is calculated to be nearly $105 million. This averages out at $2,230 per farm in set-up costs, and does not include any ongoing costs from 2007 onwards. For the arable sector, the set-up cost was going to be about $3,000 per farm. But does this Government actually care about those cost-compliance issues for businesses, which include farming? No. It does not take any cognisance of that, at all. In spite of all the rhetoric there is no substance, and the Government does not actually follow through. This is another one of those instances. Those costs will be passed on to farmers and on to ratepayers, through local authorities having to enforce them. Does having to enforce those costs mean local authorities will be getting into that whole eye in the sky stuff, as well? I do not see that as necessarily being a part of this, unless it is a visual assessment of the effects of any use of a hazardous substance.

There has been an inadequate cost-benefit analysis of the Hazardous Substances and New Organisms Act, to justify the costs to the industry. We see the costs being rorted, too, in the way people have to sit tests for the use of hazardous substances. Lots of people are now getting into the exercise of providing educational opportunities that farmers have to comply with and have to participate in, at their cost.

I also rise to speak in relation to Part 3. Like my colleague Dr Hutchison, I would like to refer to clause 22, which inserts new section 97B, “Enforcement of Act in respect of hazardous substances in place of work”, which as Dr Hutchison has very wisely mentioned includes farms. I will take a bit of a different tack on this, however. But before I do so I will refer to another learned colleague—we have so many on this side of the Chamber—Mr Eric Roy. He referred to the totally discretionary nature of the appointment of enforcement officers, which gives no certainty at all to this legislation. My point, however, is that this provision states that the enforcement agency “may appoint enforcement officers in accordance with this Act who may exercise the powers of inspectors under the Health and Safety in Employment Act 1992,”.

We all know of ludicrous examples under that Health and Safety in Employment Act, which hinders progress rather than helps progress, and which discourages personal responsibility rather than encouraging it. We have heard in the media the stories of the cancelled lolly scrambles and the cancelled pipe band marches, which are examples of how totally ludicrous and ridiculous some of the legislation passed through this House actually is. But let us look at it from a more legal point of view, and consider the definition of “place of work”. Place of work, under the Health and Safety in Employment Act, as we all know, includes vehicles. It includes motor vehicles, trucks, and tractors. It includes harvesters. If any of those motor vehicles happen to be carrying some spray, a hazardous substance, who will be responsible for that? Will it be the owner, or will it be the driver? I think that that adds to some of the uncertainty of this legislation.

My other question in relation to enforcement is, will those enforcement officers then have the powers of the police to stop and inspect the vehicles, and to check whether they are indeed carrying a hazardous substance? That is what they will need to do under this bill. My question really is: does that mean we will need more than the 1,000 front-line police now promised by this Government, and at what cost? It is another cost that I do not believe has been thought of under this Hazardous Substances and New Organisms (Approvals and Enforcement) Amendment Bill.

My other concern in relation to this bill is clause 29, “Notification of hazardous substance injuries”. That clause adds more compliance costs to our already totally compliance – cost ridden country. It provides that if a medical practitioner finds that a person who is not admitted to a hospital is suffering from an injury caused by a hazardous substance, the medical practitioner must give notice of the injury to the medical officer of health. What does “injury” mean? Does it mean that if a person sniffs a bit of spray and feels a bit queasy and goes to the doctor, then the doctor has to refer the incident to the medical officer of health.

When the medical officer of health knows that someone has felt a bit queasy from sniffing a bit of spray, as by mistake some of us from rural backgrounds have been prone to do, will this not then lead to more red tape, more bureaucracy, more compliance costs, more work, and more paperwork? Is that really a sensible option? I do not believe that this Government has thought through the ramifications of requiring medical practitioners to report any injury caused by a hazardous substance, no matter how small or how serious, to the medical officer of health. The common theme through this legislation is the cost of compliance. We will have compliance costs in trying to enforce the legislation in places of work, not only on farms but also in vehicles. These compliance costs will affect farmers who are already lumbered with so many other costs. We heard that the cost of this legislation alone adds $3,000 costs to farmers.

National members are making a big play on the cost of this legislation to farmers. I want to raise one or two issues in the submission that came from Federated Farmers to the Education and Science Committee in terms of this bill. The first one, which I shall read from the submission, is: “In general, Federated Farmers supports the provision of a group standard approval mechanism.” That is the basis of this legislation. So I really have to question some of the points that members on the other side of the Chamber are raising. I will go on to quote from another part of the submission, remembering, of course, that the 1996 legislation—which, for Sandra Goudie’s information, is the Hazardous Substances and New Organisms Act—was brought in by Simon Upton, who was National member.

This is what Federated Farmers have to say: “Practical implementation of the Hazardous Substances and New Organisms Act 1996 has been fraught with difficulties. Federated Farmers has supported changes to the Act that helped to remove constraints and minimise the unintended cost to business and Government and the barriers to innovation.” This includes both written and oral submissions in support of the Hazardous Substances and New Organisms (Transitional Provisions and Controls) Amendment Bill. In other words, Federated Farmers are supporting this legislation because it reduces the compliance costs that were implicit in the original Hazardous Substances and New Organisms Act brought in by National. I need to make the point that representatives of Federated Farmers came to the select committee and said that this legislation is good legislation, because it fixes up some of the mistakes that National had in its 1996 legislation.

National members really have to start considering that they mucked it up in 1996 and that that is why Federated Farmers are supporting this amendment bill. If compliance costs were being added by this bill, they would be voting against it. They are voting for it, because they know that it is reducing the compliance costs that were created by Simon Upton in his original 1996 legislation. Everything we are hearing from National members on that side of the Chamber has to be questioned because of the fact that it means nothing at all.

I make one extra point, which is about the on-farm compliance cost of the Hazardous Substances and New Organisms Act as calculated by Federated Farmers in their submission. It states: “The total set-up cost for compliance with the HASNO Act”—brought in by National under Simon Upton—“is calculated to be nearly $105 million, which averages $2,230 per farm in set-up costs but does not include any ongoing cost from 2007 onwards.” That is what that lot did when they were in control of this nation, and now they are complaining about efforts to try to fix up their mess.

It is interesting that we get those kinds of responses from the New Zealand First crew now that they are in Government with Labour. These are the people who told us they would keep everyone honest. And what happened in Rotorua? They said one thing, then a month later they said something else: they joined the Government. Where is the honesty we looked for in New Zealand First? People voted those members in on honesty. Where is it? Show us the honesty.

💬 Dr Paul Hutchison: Do you know which side he was on?

One would never know.

The enforcement provisions of this legislation raise three issues that we need to address today. The first one is definitely the increase in compliance costs, as we have said throughout the discussion on this legislation. That is the issue that is brought up by a lot of small-business people around the country. They are sick and tired of paying increased compliance costs. The second issue is that we are moving the responsibility on to regional government. That will create another level of work for regional government, and the Government will not be funding it. The Government will expect regional government to do all that work, and the costs of that will be transferred on to the small-business owners, landowners, and ratepayers of this country. They will have to pay increased rates to meet those service levels.

💬 Darren Hughes: What’s the alternative?

The alternative? It is a matter of trust. This Government does not trust New Zealanders and is trying to control everything. It has a control orientation within it. It does not trust farmers and others to look after their own properties. Compliance would not be needed if that trust was there. That goes to the heart of the cost estimates that the Government is bringing in as a measure of control. If the Government had trust in the people, it would back them up in what they are doing and a compliance regime would not be needed.

We also need to be open and to embrace science. One of the major things we need to do is to promote science in this country. An important part of promoting science is that we give people opportunities to take advantage of modern technology. Earlier, a Green Party member talked about the fact that we need to create a regime that allows modern technology to be considered. That is important for compliance, as well, and for enforcement. We need a system that enables us to look forward to science and to provide the opportunities it may provide in dealing with issues in this area. In essence, we need to look at compliance costs, we need to promote science, and we need to have faith that individuals are able to look after their own businesses.

The question was put that the amendments set out on Supplementary Order Paper 5 in the name of the Hon David Benson-Pope to clause 28A be agreed to.

Amendments agreed to.

Part 3 as amended agreed to.

Clauses 1 and 2