Standards and Conformance Bill

During the second reading of the bill I raised some quite serious concerns about the mess we have within the New Zealand building industry. In particular, I drew attention to the fiasco we have, whereby the standards committee is saying there is one set of rules and the Department of Building and Housing is saying there is another. I also drew the attention of the House to the view of certified builders that this level of confusion is unprecedented. We have had the whole debacle of leaky homes for over 4 years now, and it is still not clear for builders and for designers as to what the standards for building houses are.

My point in respect of this bill is that Standards New Zealand was created in the aftermath of the Napier earthquake quite specifically to deal with the issue of building standards. It is an organisation that has actually done a very good job over a very long time. I think some of the changes that the last Labour Government made in 1988, at the height of Rogernomics, were actually counter-productive to Standards New Zealand.

💬 Hon Chris Carter: Look who is talking!

The member Chris Carter, who was the Minister for Building Issues—[Interruption]

The CHAIRPERSON (Hon Clem Simich): Mr Carter, you can take a call if you wish.

I raise a point of order, Mr Chairperson. The member opposite made an accusation that was quite out of order. I suggest that you bring him to order.

The CHAIRPERSON (Hon Clem Simich): Mr Carter, I thought you would have taken what I said to you just before as a warning. Would you stand, withdraw, and apologise.

💬 Hon Chris Carter: I withdraw and apologise.

The difficulty for the Minister Mr Carter is that he turned a blind eye—

💬 Hon Chris Carter: He’s telling porkies. He’s been caught with $15 million. He’s been caught with it.

Now the member has interjected. The fact is that unlike Mr Carter, who is not prepared to stand—

💬 Hon Chris Carter: Or was it $18 million? Sorry, I was mistaken; it is $18 million, not $15 million.

Both figures are incorrect. The Minister does not know. [Interruption]

The CHAIRPERSON (Hon Clem Simich): Mr Carter, those are not objections, so you will cease, please.

I make no apologies for standing up for the rights of New Zealanders to have their homes properly constructed. [Interruption] I raise a point of order, Mr Chairperson. You have just asked the member to withdraw and apologise, and he has just repeated exactly the same offence.

The CHAIRPERSON (Hon Clem Simich): I do not think he will do it again.

Do members know how many Ministers for building and housing we have had?

💬 Dr Jackie Blue: How many?

We have had seven Ministers.

💬 Hon Chris Carter: None of them have been sued, though, have they.

The Minister has already said that I may get sued. I tell Mr Carter that I make absolutely no apologies for standing up—

The CHAIRPERSON (Hon Clem Simich): Mr Carter, I have asked you a number of times to cease. I ask your whip to tell you to cease, and that will be the end of it. I do not want to hear you again during Dr Smith’s speech.

The part I find interesting is that I am being sued by an American corporation. Is this not the same Labour Party that somehow believes National members are all beholden to Americans? There seems to be a bit of a dichotomy, because if we stand up for New Zealand consumers and say: “Come on, guys, treat the timber according to the New Zealand standard.”, the Minister is silent. He was not prepared to do anything about it, and I was prepared to put on the public record genuine concerns held by myself and New Zealand scientists about the standard of timber treatment.

I come back to the issues for the Minister in the chair, Lianne Dalziel, in terms of this bill. What is the current requirement for treating timber? As I pointed out, we had this fiasco whereby the Minister said that standards in New Zealand would be set by a very thorough process—by consensus or by an 80 percent vote. In June there was a vote and two members voted against the watering down of timber treatment standards.

💬 Dr Jackie Blue: Then what happened?

The two members were sacked. It was put to the vote again in August, and can members guess what happened? There was consensus. So the standard has been changed. I ask the Minister whether that is acceptable. We are putting all sorts of ethical standards in this bill. Sacking members of a committee, including a scientist from AgriQuality, a State-owned enterprise, because they did not agree seems to me to be somewhat out of step with what I would think was ethical conduct.

I put these questions to the Minister before, and she was absolutely silent. She is the Minister in charge of Standards New Zealand, and I have a very simple question for her: can she explain why those two members were sacked from the committee? We know that they were the only two who voted against the change. Imagine if we had that in Parliament; that if one votes against the Government, off one goes—on your bike! That seems to me to be the style of ethical conduct we will have. The Minister has brought a bill to Parliament to introduce ethical standards into the standard-setting process, but she is silent when those sorts of shenanigans go on within Standards New Zealand.

I challenge the Minister to please provide some answers. What standard is acceptable today for building houses? That question is pretty important to a whole lot of New Zealanders out there. Tens of thousands of houses are being built, and people do not know what the standard is, because the Government has not got its act together. Question No. 2: can the Minister tell us why two members of the standards committee—the two who happened to vote against the watering down of the timber treatment standard—were suddenly fired? Was it, as everybody within the industry knows, because of commercial pressure from some companies that wanted them out? We deserve an answer from the Minister. Can she tell us why those two members were fired from the committee? More important, I would like to know from the Minister how, in terms of this bill, she can talk about introducing ethical standards when at the very same time she, the Minister in charge of Standards New Zealand, is silent when these sorts of difficulties are going on, and when these sorts of Crown agencies are involved in conduct that is hardly becoming in terms of increasing confidence in the most important area of Standards New Zealand’s work—that is, building standards.

I am actually surprised, because the Minister in the chair, the Hon Lianne Dalziel, is well known for being upfront in taking calls. She is about the only Minister on the Labour front bench who is prepared to answer questions, and I think that the two questions posed by my colleague the Hon Nick Smith are very good ones. I am concerned about the fact that in June two members of the Standards Committee were sacked, simply because they voted against lowering the standard for building materials. My concern extends, then, to what would happen to the Auditor-General, who actually raised the issue that the Labour Party used taxpayers’ money illegally in the election campaign. I am coming back to the bill, but there is a concern, if appointed members of a committee get sacked, simply because they want to maintain a higher standard, about who then is left to hold the Government to account.

I also want to pose some more questions relating to Part 1. This part increases the functions of the Standards Council to include the development of standards that promote social responsibility. The term “social responsibility” is very subjective, and I have a horrible vision of our officials from the Ministry of Economic Development holding hands with international delegates and conducting strategic conversations in order to develop a social responsibility standard.

I have suddenly found, in the last financial review of the Ministry of Economic Development, that there is a buzzword and a communication strategy that apparently each Government department is conducting—that is, not just a conversation but a strategic conversation. I was very interested in this, and I asked the officials what “strategic conversation” means. It is a term that is actually contained in the objectives of a Government department’s mission statement. Apparently, the Ministry of Social Development states in regard to “strategic conversation”: “A less technically sophisticated evaluation that can add more to the strategic conversation is of more value than a technically sophisticated evaluation whose results may distract from ensuring the most strategic use of resources.”

I ask my colleagues whether any of them understands that statement. I thought that another Government department might be able to enlighten me as to this term “strategic conversation”. The Ministry of Economic Development states: “Our attention has turned to improving the quality of strategic thinking and conversation. As part of this we have put more focus on synthesising research to distil the implications for our strategy.” I ask my good colleagues on my side of the Chamber whether any of them is any the wiser about the term strategic conversation.

We are going to elevate strategic conversation to an international level in order to develop standards that will promote social responsibility. I would like the Minister to take a call and say how much more compliance implication that would impose on business, or on anybody trying to adhere to, or develop, eventually, a social responsibility standard. The Minister is the one who claimed sometime in June that she was conducting a dynamic review on the compliance burden, particularly horizontal, vertical, strategic—who knows? She is doing this particularly for small-business people, and I want to know what the implication of these new objectives will be for the Standards Council. What sort of a standard will be developed to promote this so-called social responsibility issue?

One may be forgiven for giving this bill a somewhat cursory glance and thinking that, yes, it is combining the functions of two bodies, that sounds OK. It is combining the Standards Council and the Testing Laboratory Registration Council and is intended to align the functions of both with international standards. That sounds great, it should therefore save some costs. It should be a good bill. However, there is a big “but”.

I divert for a minute to mention something that has not been mentioned in the commentary on the bill. It seems to be international practice these days that only one body in any country has the function of registering certification bodies, and that is fine. In New Zealand it is this great thing called theJoint Accreditation System of Australia and New Zealand. Whilst it is possibly not technically within the scope of this bill, I do raise the issue of whether New Zealand is losing its sovereignty to this joint body. How answerable is the joint body to New Zealand courts? I would like the Minister in the chair, Lianne Dalziel, to address that issue, because I think it is one that is hugely fundamental to our constitutional law. As an international regulator, how many local controls would it need to comply with? Decisions about using world guidelines for standards will not be made by New Zealand, at all but by this joint body, on which we have two representatives.

The other question I would like the Minister to answer is how Parliament, if it so wanted, could actually modify the rules of this joint agency. Does it in fact have the power to do so? I think we are at very real risk of ceding our sovereignty to this joint trans-Tasman agency, and I take that as a very, very serious constitutional issue.

Leaving aside that wider issue—because it might be too intellectual for the other side—and coming back to the bill, I point out that the popular rhetoric seems to be about reducing compliance costs and making it easier for businesses to do business. So it would seem obvious that some analysis of those consequential compliance costs might have been completed before launching into this bill. What are the fiscal implications of the bill? We are told that the implications of this bill are “just too difficult to assess”. I would have to say that for all the talk and rhetoric about social responsibility, this bill has every chance of being yet another irresponsible bill with yet more unintended consequences. There has been no disclosure.

In fact, there is no idea of what the compliance costs resulting from this bill will actually be. The compliance cost statement in relation to the bill even identifies that compliance costs will be incurred because of these two accreditation bodies being reduced to one. But as there may be some confusion in the market because of these changes, “It is not possible to quantify the size of the compliance costs.” and we are expected just to accept that. Well, I do not think so.

I said before that this could have been a good bill. It is important that other countries have confidence in our system, for the accreditation of those certification bodies. We place a heavy reliance on our trade exports, and wishy-washy, unreliable, and inconsistent standards are certainly to be avoided. But this potentially good bill has been spoilt by the Government sneaking in a couple of new objectives of the Standards Council.

Just to go back in time, I tell members that under the existing Standards Act, the primary functions of the council—which are quite sensible—are to develop standards, to promote, encourage, and facilitate the use of standards in New Zealand, and to improve the quality of goods or services, having regard to economy in their production or supply. We cannot argue with that. They are also to promote standardisation in industry, trade, or commerce—we cannot argue with that—and to encourage and facilitate industrial development, trade, or commerce, which we cannot argue with, either, or to promote public or occupational safety, health, or welfare. That all makes some sense, because at the end of the day we must acknowledge the importance of objective standards, and standardisation of standards, with our trans-Tasman neighbour, Australia. Nobody wants to compromise those standards, but this bill just had to go that sneaky bit further.

I move, That the question be now put.

I rise to speak to the Standards and Conformance Bill, and to bring to the Minister’s attention, for starters—I am sure she is well aware of the Ministry of Economic Development’s website—the Government’s objectives for conformance and standards. I will not ask her to recite them off pat, because that would be unfair, of course, but I will remind her of what those objectives are. I will read through them. First and foremost is facilitating domestic and international trade. Second is minimising risks to health, safety, and the environment. The third is facilitating innovation and economic development as part of the economic transformation equation that our Prime Minister is banging the table about at the moment, while we are still going backwards on economic growth. The fourth is reducing compliance costs. That is what it says there; it is all about reducing compliance costs.

So I imagine that is why the Minister is planning a trip in February of 2007 to the ISO Working Group on Social Responsibility, which will take place in February 2007 in Sydney, Australia. I ask the Minister whether she will be attending that conference. I do not think she is sure about that.

💬 Hon Dr Nick Smith: She doesn’t know.

She does not know. Well, I would like her to find out a little bit more—being the Minister of Commerce, responsible for commerce and standards, and for introducing a new standard that is all about minimising environmental risks and promoting social responsibility into the Standards Act 1988. Yet the Minister does not even know about a conference that will be taking place in Sydney in February 2007, on the ISO Working Group on Social Responsibility. Now we might ask ourselves why the heck might we have a conference on that. Well, I have to say that I would not be wasting my time in attending it myself. But it is the very reason this whole change in the Act is coming about, and the Minister is not even aware of it.

I want to talk to her about why it is coming through, because there is a hierarchy of standards that come about throughout the world. Firstly, there are international standards, then standards set on an Australasian level. Then regional and local standards are set—all done under the Standards Act of 1988. Just for the Minister’s reference—this evening is probably a bit of an education for her—I tell her that the Standards Act was originally put in to consolidate and amend the law relating to standards, and to repeal the original Standards Act of 1965.

A body was set up called the Standards Council, I say, for the Minister’s benefit, and there are 12 members on the council. She may not be aware, either, that the membership of that council is made up of bodies as august as the New Zealand Institute of Architects Inc. Was she aware of that? It includes the National Council of Women—it is there to help set standards and be part of it—and other august bodies like Local Government New Zealand. So that standards organisation is there to set standards for New Zealand, and now we are seeing this amending legislation being brought in to add to the functions of the council. The primary functions of the council should be to develop standards, and to promote encourage, and facilitate the use of standards in New Zealand. Let us go back to the Ministry of Economic Development website, and I ask what those objectives were—to facilitate innovation in economic development, and to reduce compliance costs.

I want to know how the heck minimising of environmental risk and promoting social responsibility will have any impact, whatsoever, on increasing economic transformation for this country. That is the question the Minister should be asking, because creating growth should be what it is all about. I will tell members why we have this—this whole thing comes from a conference that will end up in Sydney next year, dealing with the international standard ISO 26,000 on social responsibility.

Let me tell the Minister a little about ISO 26,000, which is the international standard that has been set, on a worldwide basis, for social responsibility. The interesting thing about that standard is that it will not include requirements, and thus will be a certification standard. So it will be optional. We are going through this whole process of amending legislation to make two changes to the Standards Act—for the minimisation of environmental risk and the promotion of social responsibility—all for ISO 26,000, which will be optional. That is unbelievable. How will it enhance economic transformation in this country?

I move, That the question be now put.

I appreciate the opportunity to have some input into this debate. I am particularly concerned when I look at this bill; I am really delighted that my colleagues, and National, are opposing it. I think that it is quite scary when we see Labour making such amendments in legislation. When we look at Part 1, “clause 7: “Functions of council”, we see that subclause (4) states: “Section 10(2)(h) of the principal act is amended by inserting, after the word “standards”, the words “and other specifications”. To me, that is broad in the extreme. What does “and other specifications” really say about what we can expect in the future?

I am mindful of a recent press release about cars. If one also takes into account environmental and social responsibility, where will the emphasis be? If we look at the latest press release about small cars being death traps, we see that it says that smaller vehicles are built as economically as possible, and the biggest economy is attached to safety features. So yes, small vehicles have a saving in terms of fuel consumption, but safety features are sacrificed as a consequence. So will we support small vehicles because they seem to be more environmentally friendly, or will we oppose small vehicles because they have a much greater personal risk to people’s health and safety? The article goes on to say that there are a lot of problems in providing adequate performance protection. If specifications or standards are being set, which one will take precedence—the environment or people’s safety? Who will weigh up those sorts of issues when it comes to setting standards or, indeed, specifications? Here, “specifications” are a pretty broad brush and can be applied to just about anything.

When I was listening to my colleague Mr Chris Tremain earlier, I was very impressed with his presentation, and with his reacquainting us with the intention of standards—that is, to facilitate domestic and international trade. I would say that the Government has failed miserably in that regard, when one thinks about honey imports and the standards it applies there. The Government is putting our whole agricultural and horticultural sector at risk because those standards are not robust. The Government acknowledges that they are not, yet it has taken that on board and still made the decision to allow honey to be imported into New Zealand that is not heated to its optimum in order to ensure we do not have diseases coming into this country and putting the rest of our horticultural and agricultural sectors at risk.

This bill was supposed to enhance public confidence in the setting of standards, but in no way does it do that. What else does this bill say? Clause 7(5) states: “Section 10(2)(i) of the principal Act is amended by adding the words ‘or that the Minister may direct it to perform in accordance with section 112 of the Crown Entities Act 2004’.” What does section 112 state? It states: “If an Act, or a Crown entity company’s constitution, gives the responsible Minister power to add to the functions of a Crown entity, the Minister may direct the entity to perform any additional function that is so added and that is consistent with the entity’s objectives.” This bill now gives the Minister the power to direct it to perform any other functions that the Minister deems acceptable, and, again, that could be broad in the extreme. I have absolutely no faith in this Government, particularly with its record around fiscal responsibility and, indeed, around compliance costs.

I think two of the most telling submissions were from Telarc and from Health and Disability Auditing New Zealand Ltd. Both made very clear submissions, and, in fact, did the work for this Government of identifying what the compliance costs would be. What did this Government do? It completely ignored the content of those submissions around compliance costs. It completely dismissed those concerns that were raised. Health and Disability Auditing New Zealand Ltd made it quite clear by setting out graphs and identifying all the figures. It was going to cost that company $155,000, compared to $18,000. I think that is absolutely abominable. I can believe that this Government would be so ignorant of the effect of the introduction of this bill on other entities. Telarc itself also goes on to outline some of the costs in its submission.

I move, That the question be now put.